P&G Cuts 1,600 Jobs: Marketing On Facebook, Google Is "More Efficient"

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You have seen these Old Spice ads:

You're not alone, either, because nearly 40 million people have seen that ad on YouTube alone. Who knows what the total tally of viewers is once you add estimates of people who actually saw that commercial on television. At any rate, it's been seen by loads of people and Old Spice's parent company, Proctor & Gamble, has noticed that you've noticed their viral ad. As a result, they've decided that this tactic works and, in fact, it works so well for them that they're putting their considerable weight behind that particular method of advertising.

If you're thinking that such a decision might be bad news if you work in P&G's marketing division, you'd be correct: the company has announced that they will be giving the axe to 1,600 "nonmanufacturing jobs" (e.g., jobs in marketing) as they turn their marketing eye toward "digital marketing."

Robert A. McDonald, P&G Chairman and CEO, spoke at a Q&A session during the discussion of the company's Q2 2012 results and said his company finds "that the return on [marketing] investment can be much more efficient" through mediums like Facebook and Google. He continued, "One example is our Old Spice campaign, where we had 1.8 billion free impressions and there are many other examples I can cite from all over the world."

Prior to that comment, McDonald stated that P&G will continue to spend 9-11% of their sales budget on advertising, but the allocation of that money may change considerably now that the company has discovered how wildly successful the right viral ad can be for them. Then again, they might be overestimating the potency of viral ads and social media because if there was ever a kingdom where caprice was king, it's in those lands.

But if this works out in their favor, expect to see many other companies defect from the traditional means of advertising and rely more on the "more efficient" methods of social media and viral videos.

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