P&G's Pritchard Calls On TV Industry To Eliminate Audience Guarantees, Focus On 'Synchronized' Supply And Demand

Building on his long-time push for major flexibility and changes for the TV upfront ad market, Marc Pritchard, chief brand officer of Procter & Gamble, called on the industry to abandon traditional TV audience guarantees and instead focus on better ways to synchronize supply and demand.

“We negotiate ‘audience guarantees’ so we can get ‘makegoods’ when the audience forecast inevitably falls short -- because the one thing we know for sure is that the audience forecast is wrong,” says Pritchard, in remarks delivered at the ANA Media conference on Thursday.

“This is incredibly inefficient. Do we buy anything else this way? The only thing I can think of is toilet paper during the pandemic -- buy as much as possible from as many stores as you can because you can’t predict how long you might be stuck at home.”



He adds: “At least with toilet paper, you can never have too much – especially Charmin. But too many ads can lead to a terrible consumer experience -- because far too many programs get loaded up with the same ads over and over and over again.”

Pritchard believes there should be better synchronization in matching ad supply and viewer demand. With more and more retailers offering to sell media, for example, he believes there should be an overall push is to “connect media directly to commerce.”

“Could we ever eliminate the need for audience guarantees, which are inherently inefficient?.. This is a call for innovation in media buying and placement -- because it’s time to find a better way. P&G commits to work with broadcasters to develop and test approaches that will eliminate the current system.”

Pritchard also talked up expanding multicultural media inventory by co-developing programming content. For example, he says “media inventory for black-owned media companies represents less than 1% of total TV and digital media inventory and about 3% of total radio media inventory – that’s not enough.”

He adds that In two years, P&G has doubled its spending in this area. “And we intend to double again…and then double again.”

2 comments about "P&G's Pritchard Calls On TV Industry To Eliminate Audience Guarantees, Focus On 'Synchronized' Supply And Demand".
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  1. Ed Papazian from Media Dynamics Inc, March 3, 2022 at 4:18 p.m.

    Actually, Marc, it has always been true that pre-season rating estimates for national TV shows were extremely iffy. This is nothing new. That's why the sellers never guarantee ratings show by show---but only on a total schedule basis, across program bundles.  Sorry, there is no system that will predict with precision the future ratings of every show, week by week, day by day. Why? Because  many of the shows simply don't exist as yet and many holdovers are facing new competition or are in new timeslots.

    As for dropping audience guarantees, I'll bet that the sellers would just love that. They'll take your buyers to the cleaners and you will wind up doubling or tripling your CPMs.

    About too many commercials being loaded up on the same shows, in "linear TV" the networks have rules about how the ads are scheduled---unless the buyer wants it otherwise---they don't repeat the same brand message in any given break. It's too bad if programmatic buying for CTV runs counter to this practice---but the solution is to buy direct and include specific instructions about how the ads are to be placed---break the rules and you don't get paid. It's simple, really.

    Finally, how are we going to connect  media to commerce? Do you mean that we need some sort of rating service that tells you exactly how many tubes of toothpaste the supposed viewers of each toothpaste commercial bought as a direct result of seeing the brand's ad message? Of course,you will need this for every brand for every commercial---yet as you don't expect the time sellers to guarantee such results as such guarantees are "inefficient" what do you do when the results are not to your liking.

    Sorry to pick on you Marc but we need to really think things out, exploring all of the ramifications and trade-offs and consider what can be done in a practical sense if we expect to make real progress. It's time to put aside the speculative theorizing and consider the real world practicalities---one of which is incorporating attentiveness into any new national TV rating system. That's something we could do.

  2. John Grono from GAP Research, March 3, 2022 at 7:43 p.m.

    Plus one Ed.

    'Make-goods' are a peculiar beast.   Marc is correct in saying that "because the one thing we know for sure is that the audience forecast is wrong".   But there are degrees of being wrong.

    Here in AU we plan and buy a schedule which is made up of many TV spots, which culminates in a GRP and the R&F (knowing that GRP = Reach x Avg. Frequency) for the schedule.   As there are multiple broadcasters, you first look for overall under-delivery (with some tolerance level).   Then you need to identify whether it was one broadcaster that was the primary culprit and negotiate make-goods (generally surplus inventory as tonnage).   If not, you search for individual programmes that under-delivered.

    Clients are (correctly) hot on that - finding the culprit and getting compensation make-goods.

    But one thing that I have NEVER seen is a client who reviews the post-campaign delivery, spots a channel or programme that has consistently over-delivered on the schedule, and has then offered them additional payment.

    Media is (or should be) a two-way street.

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