What P&G’s “world with no ads” announcement really means

P&G’s chief brand officer Marc Pritchard is one of the most respected marketing experts of our age. When he claimed a few weeks ago that “We need to start thinking about a world with no ads”, people noticed. What he meant was that the rise of IoT-driven consumer products is completely transforming branding and could even erase advertising as we know it. This is something that I have been thinking and writing about a lot these past few months. I believe that Pritchard’s statement is a really big sign. It might announce that we are standing at the dawn of the era. A fundamental change in branding. Big brands will enter the era of “Marketing to Machines” and direct, fully personalised communication with the end user. Making sure you don't get 'filtered out' by AI platforms will be one of the biggest challenges of the next decade.

DE-filtered, filtered-IN or filtered-OUT

This is a well-thought strategic move from P&G: they realize that, as technology platforms like Amazon (Alexa) and Google (Assistant) are moving in between our brands and the customer, they have only this small window of opportunity to capture the direct relationship with its customers. In a few years, brands will have one of three triangle relationships with AI-platforms and customers: DE-filtered (keeping direct contact with the customer), filtered-IN (they will use marketing-to-machines to get past the gatekeeping AI platforms) and filtered-OUT (no more customer contact and no way to get noticed by them). Side note: I’ll post a piece about this in the coming weeks. So, keep an eye on my blog if you’re interested in the subject.

As P&G is a huge ecosystem of brands, they realize that each of their separate products will end up in one of those 3 different interdependencies. And they are prepared to fight to stay DE-filtered as much as they can, knowing better than anyone how valuable the direct customer relationship is. They have some really strong brands that will be able to do the latter. Just think of Pampers, Pantene or Swiffer: consumers will probably explicitly keep asking for those. But there are many other brands, that may be strong – like Ariel, Dreft or Bounty paper towels – but are highly commoditized too. These will have a lot more trouble catching the customer when automated buying will make an entrance. That’s why I would not be surprised if P&G would be one of the pioneers of a subscription-based product model, where registered customers would for instance automatically receive toilet paper packages every 2 weeks.

Middle men 2.0

It makes total sense that P&G would be one of the first to realize the dangers and potential of algorithm-based buying. They have always been forerunners in direct customer contact, and the gathering of intelligence about them. An now, these investments will pay off more than ever. I’ve always told people that data-gathering is the fundament of every innovation, and that those who do not invest in it, will at some point be so much left behind, that they will no longer be able to catch up. I believe we have arrived at this point. P&G believes we have arrived at this point. And those who have not invested in a data-driven and personalized relationships - with customized communication, pricing and products - so far, will become filtered-OUT.

“The world without ads” that Pritchard was addressing is also one of the many manifestations of the “cutting out the middle men” tendency. In the case of FMCG giants like P&G that would be the media (where they display ads) and the retailers (where they display and sell their products) which will be increasingly cut out in times of AI platforms and automated buying. But these middle men will in turn be replaced by much more powerful ‘middle’ platforms like Google and Amazon, that will come in between us and our brands. In the case of the retailers and the media, the relationship was more like symbioses, where both parties needed each other and had (more or less) equal negotiation power. That’s a lot less the case with these ‘new’ middle men platforms: they need brands a lot less than brands need them. The negotiation power of AI platforms is so much higher, that brands need to re-think their go to market strategy. This is exactly why the DE-filtered customer relationship - that P&G will definitely strive for - will be the most enviable.