LIVE FROM HUAWEI’S GLOBAL MOBILE BROADBAND FORUM 2017, LONDON: The president of Proctor & Gamble (P&G) Europe explained the company’s business model, honed over 180 years, is being turned upside down by mobile and digital technologies, which are also impacting the advertising industry and retailers.
The technology being developed could be judged as a threat, said Gary Coombe (pictured): “But we don’t see it that way. We see it as a huge opportunity to transform our business.”
He said: “You guys [mobile operators and tech companies] came along and completely ruined” long tested business models.
In the early days it was the music industry, with Apple becoming the world’s biggest music retailer. Then it was the personal transportation industry which was disrupted and next the hotel sector, he said.
“But it doesn’t end there: every single business on the planet is being disrupted and that includes consumer goods, even the simple process of manufacturing a soap detergent or toothpaste.”
The disruption isn’t merely around margins, it’s mainstream – impacting all of P&G’s 5 billion customers, he said.
Reaching the consumer
He admitted the company had to relearn very quickly how to communicate with its audience via a small screen, usually without any sound. In the past the company thrived on running 30-second TV adverts, and in just a few years “that’s flipped to a piece of creative that’s watched for an average of 1.7 seconds on a 5cm screen. That’s a complete disruption to the advertising industry, the agencies and consumer good manufacturers”.
Digital media is now bigger than TV media for its business. The biggest problem is P&G doesn’t get what it pays for in media spend, with about 50 per cent of ads on digital platforms watched by bots rather than humans, Coombe said: “That’s a big issue.”
In addition, there is no third party verification of adverts: it doesn’t exist yet in the digital media industry, he said.
How the consumer shops, of course, has also changed: “Now we’re in the second wave of that disruption. The first was the move from real stores to going online, usually using a cell phone. Now mobile technology is enabling even more disruption, which is the move to voice.” Coombe noted the latter shift poses an interesting “challenge to brands and retailers as well”.
Things like search results, good ratings and reviews, and having rich video content which brings your products to life are the new KPIs on how to win the shopping occasion for consumers using mobile phones.