What Marketers Everywhere Can Learn From P&G's 1,600-Person Layoff

by Corey Eridon

Date

January 31, 2012 at 4:46 PM

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Yesterday, Business Insider reported that Procter & Gamble is set to lay off 1,600 employees as a result of its decision to cut back on the company's annual advertising spend of $10 billion. CEO Robert McDonald said he can't keep increasing his ad budget even if sales continue to increase because of the prevalence of "more efficient" expenditures like Facebook and Google.

This statement seems to imply that P&G has been seeing dramatically increased sales due to its immense ad spend, but the truth is really that the company's marketing spending is up 24% over the past two years, despite only a 9% sales increase in its 2012 Q1 earnings and a 6% sales increase over those same two years.

Real-Life Companies Moving from Outbound to Inbound Marketing

It looks like P&G finally realized it doesn't have a sustainable marketing strategy and are thus taking painful steps to fix it. And Mr. McDonald is right; organic search and social media marketing are more efficient than advertising. But the assumption that digital media is free is one that too many marketers fall into, and P&G should be cautious not to make that mistake. From one inbound marketer to another, I'm here to say that not all advertising is inherently bad, and not all digital marketing is inherently effective. The secret sauce for success in all marketing channels lies in the way you integrate them with one another.

So how exactly does a company like P&G, who is allocating more of its resources to social media and SEO, integrate those with the rest of its marketing and advertising efforts? The first thing to remember is that social media and SEO are more efficient, but they're not free. Doing it right requires time, resources, and technology that costs money, even though it will be significantly cheaper than a $10 billion annual ad spend. But once you get over that idea and accept that social media and search are inextricable, you can start to effectively integrate it with your other marketing channels.

A year ago, one of HubSpot's customers, Steve Sheinkopf of Yale Appliance, went through a similar P&G strategy shift from outbound advertising to inbound marketing when he realized that "investing in old media may get you 100,000 eyeballs, but they're not qualified. Only a few of those people are in a position to buy your product." So he went from spending $750,000 a year on advertising to a greatly reduced $100,000 budget in 2012. The point is, it can (and should!) be done by businesses of every size, yet it's only efficient and effective when SEO and social media work with your other marketing channels.

Integrating Content Creation, SEO, and Social Media

Perhaps the most tightly intertwined marketing channels are blogging, SEO, and social media; if you leave one out, the others suffer. Last year's Google Panda updates placed more importance on social sharing, and with Google+ gaining visibility in search results, the tie between your social presence and your search engine presence can no longer be sidelined.

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And hey, maybe Google will even start indexing the @ sign so tweets show up higher in search results, too. But we'll let them duke that out (or you can in the comments section).

Google's bots are also looking for websites to consistently update their content, for which blogging is a natural solution. Plus, bloggers can select the keywords for which they'd like their website and blog posts to be found in search engines, and craft content around those keywords every single time they sit down to write a post. And as you amass more keyword-rich blog posts, you amass more visibility in the search engines.

Many business owners have been seeing even more success with this method by targeting long-tail keywords. Yale Appliance's Sheinkopf started targeting long tail keywords in his blog posts when he realized the important term 'counter depth refrigerator,' with a monthly search volume of 8,700, was more valuable to him than purchasing listing positions through PPC for terms like 'refrigerator.'

On the effect long-tail content creation has had on his inbound marketing strategy, he says, "Long-tail keywords sound scary to some people, but it just means you're targeting a niche audience who is a more qualified website visitor than someone who searches 'refrigerator.' Why would I spend my paid ad budget on a term that costs me $20 per click and drives unqualified traffic, when I can blog about a term that drives people who are ready to buy and get 120 inbound links along with it? That's more valuable and efficient for my sales and search engine strategy than any ad campaign."

Once you're done blogging, complete the blogging-SEO-social media circle by socially sharing that content you've created with keyword-rich updates. As you continue to provide valuable content you've created on social media networks, you'll see your reach on those networks grow, and consequently, the traffic to your blog and your ranking in search engines, too.

Is There Still a Place for Advertising?

Like P&G, Steve was seeing that the more he spent on advertising, the less he got back; the correlation between ad spend and customer acquisition was dwindling. But that doesn't mean all advertising is a waste of resources. Steve still advertises to current customers and super-qualified leads in the bottom of his sales funnel. But because he's targeting his ads to a niche audience, the ROI is through the roof. And the others who are seeing similar success with advertising are using inbound marketing to target their niche audiences and see worthy results. For example:

  • P&G did experience some success with advertising; remember its wildly popular Old Spice campaign, "The Man Your Man Could Smell Like"? The one we at HubSpot -- you know, people who are kinda into inbound marketing -- spoofed in our 2011 holiday cards? Well, P&G wisely put that video up on YouTube, and it has received nearly 40,000,000 views. Then P&G used the star of the video (a social media star in his own right, a great move for digital marketing success) to create quick, custom videos in response to social media questions directed at him. Turns out, those real-time video responses were the fastest growing video campaigns ever. Now that's how you integrate advertising and social media for inbound marketing success.
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  • Coca-Cola is preparing for this year's Super Bowl by preparing for the 60% of people predicted to watch the game with a second screen, smartphone, or tablet nearby. Its ad spend is being complemented by a game in which viewers can watch the company's signature polar bear mascots (both rooting for different teams) react to the game in real time.
  • Advertising has found its way into the online world with PPC, and when coupled with an organic search strategy, many companies see more success than when focusing on just organic search or just paid search alone. A Search Engine Land Honda case study cites the positive branding effects that appearing in both the top organic and top paid spots has on searchers; Honda experienced a 16% increase in brand affinity, a 42% increase in brand recall, and an 8% increase in purchase intent. Those automakers absent from both spots saw a 16% decrease in purchase intent.

Integrating SEO, Social Media, and Everything Else

For the best inbound marketers, the integration never stops. Your mobile marketing should be integrated with your SEO and your paid search. Your PPC should be integrated with your content strategy. Your content strategy should be integrated with your mobile marketing strategy. Because while each individual marketing tactic gets you good results, when you combine them, you see astronomical returns.

Other inbound marketers are shifting their methodology this way, too. 71% of business executives surveyed worldwide are promoting their social media presence in their email marketing messages. And 63% of them are enabling email recipients to share email content with their social networks (Source: StrongMail research). Marketers are even talking about how to integrate mobile marketing with SEO and paid search to take advantage of the 400% growth in mobile searches over just the last 12 months. P&G and other outbound marketers making the switch to inbound are on the right track, and they'll see success if they're dedicated to an integrated view of all of their marketing channels.

How integrated is your marketing? How do you use social media to power your other marketing channels?

Image credit: goldberg

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