Is Facebook Building the 21st Century Procter & Gamble?

Back in 2008, I had the chance to lead P&G’s Joint Business Planning with Facebook (as well as the other big digital media players).  The intent of the Joint Business Plan wasn’t about just increasing advertising dollars.  It was about knowledge sharing between the two companies with the goal of having a strategic relationship where we both became better businesses as a result.  This cultural exchange was about P&G accelerating our digital knowledge, while Facebook learned how brand marketers thought. Following the announcement last night of their purchase of WhatsApp, it looks like Facebook didn’t just learn how to think like P&G but maybe how to become P&G as well.

What I mean is that Facebook appears to be using the Procter & Gamble playbook for building a “house of brands.”  This playbook is about building a portfolio of businesses that often will compete against each other but ultimately giving your company a larger market share.  For instance, P&G’s global laundry market share is around 31%. This includes brands like Tide, Gain and Ariel, each of which contributes above $1 billion in annual sales.  But they also have brands like Bounce, Downy, Era and others that all compete in the same space.  The same goes for Baby Care with both Pampers and Luvs, as well as Hair Care with Pantene, Head & Shoulders, Aussie, and Herbal Essences.

Facebook has a history of being active in the acquisition space, with WhatsApp being their 45th purchase.  But historically, all of their purchases were either acqui-hires for the talent or a foundation for a future Facebook feature.  For instance, Hot Potato became the basis for Facebook Places and Karma became Facebook Gifts.

But this might be changing.  The first indication was the purchase of Instagram in April 2012.  At the time, Instagram CEO Kevin Systrom wrote bluntly in a blog post that, “Instagram is not going away.”  As we near the two year anniversary of that deal, those words have held true and Instagram is an even stronger brand today than it was back then.  With the WhatsApp purchase, the key message track for Zuckerberg and company is that “WhatsApp is on a path to connect 1 billion people.”  The talk isn’t around how WhatsApp will fix Facebook Messenger but instead its all about the potential of the WhatsApp brand and service.

If you look at P&G’s Purpose, they say that they “will provide branded products and services of superior quality and value that improve the lives of the world’s consumers, now and for generations to come.”    Facebook on the other hand talks about their purpose being “to give people the power to share and make the world more open and connected”   With the addition of WhatsApp and Instragram, you could argue that these purposes are becoming more and more similar.  Facebook now has three “branded products and services of superior quality and value that improve the lives of the world’s consumers” to “share and make the world more open and connected.”

People were shocked at the price of Facebook’s purchase of Instragram in 2012.  And there is even greater disbelief as the WhatsApp acquisition goes down as one of the largest M&A deals in history.  But in many ways, both of these deals are similar to the moves P&G made to buy Gillette for $57 billion and Clairol for $5 billion.   With Gillette, P&G gained one of the strongest male grooming brands in the world, while Clairol was a foundation for the scale of P&G Beauty.   For Facebook, WhatsApp has the same role in Messaging, while Instagram offers it for Photos.

In the end, Facebook is following the same strategy of building a House of Brands that has built the great CPG companies like P&G, Unilever, and Nestle.  I’d say they clearly learned something about building brands during all those Joint Business Plan meetings years ago.

Social Media Cannot Be Deleted

Yesterday I happened to catch a Facebook post by Ford’s Scott Monty that simply said. “Now THAT’s on brand!”.  Of course, I had to click through and what I landed on was a BuzzFeed article entitled “Charmin Tweeted, Then Deleted, This Spectacular “Thor” Pun.”   Apparently Charmin had posted the great ad below but then pulled it down when Marvel / Disney made a complaint (around trademark, etc).

Charmin Thor Asgardian

 

First and foremost, shame on Marvel if they really took this seriously enough to complain.  You are trying to build buzz leading up to opening weekend for your new movie and are spending tens of millions of dollars to do so.  Tell me just exactly how the above ad hurts in that mission?  Ironic that a comic book company is taking themselves this seriously, isn’t it?

Second, this is just another example of a brand forgetting that the Internet, and Social Media in particular, does not have a delete key.  You might delete your post but I can guarantee that someone has already saved it the second you posted.

The shame in all of this is that Charmin is actually one of the better brands when it comes to Social Media.  As Jason Falls conveniently pointed out in a post this morning, a lot of brands could learn something from how Charmin handles Social Engagement.  As Jason writes:

What Charmin teaches us is that engagement on social channels is absolutely worth while. Social marketing in this context is not about getting people to buy Charmin. That would be a direct response approach that would be awful in the social space.  Who wants to see tweets of, “Make sure you go out and buy some Charmin today!?  Social marketing in this context is about getting people to choose Charmin. Whenever it is they are faced with that choice.  Top of mind is worth millions of dollars to many brands. Social media engagement helps brands like Charmin get there.

Hopefully in the halls of P&G this morning, someone isn’t being blamed for this ad but being celebrated for the success they are having with making Charmin a darling of the Social Media landscape.  This ad was just as good as Oreo’s “Dunk in the Dark” when it comes to tapping into pop culture.  After all, how often does a toilet paper brand end up with over 200K views on BuzzFeed?

Quora: “What will it take to build the next Procter & Gamble?”

Over on Quora, Tristan Walker asked me to answer the question of “What will it take to build the next Procter & Gamble?”  It is a fun question when you think about what it will take to turn one of today’s technology darlings into a company that can last over 100 years.  Given the positive response I received on the post, I thought I’d repost my answer as a blog post here:

 What will it take to build the next Procter & Gamble?

Of course there are many ways to interpret this question but I’m going to take the stance that building the next P&G refers to building a company with the following characteristics:
- Market leadership in multiple product categories
- A global footprint
- A reputation as a top company for business leadership
- Ability to be over 100 years old and still thriving

I think there a few core things that have helped P&G to become such a company:

Innovation Based On Expertise:  Today P&G competes in categories as far reaching as diapers, laundry care and cosmetics.  But one thing most people don’t realize is that P&G’s history is based on 1 Degree Innovation.  There is even a diagram at headquarters in Cincinnati that shows this principle.  P&G started in soap and candles, which were based fat based products.  Each product was innovation that was one degree away from a technical or scientific ability that P&G had from an existing product.  For instance, P&G’s entry into Oral Care (Crest, etc) in the 1950′s was driven by experience in Laundry Detergent.  And that holds true today where Swiffer was launched based on technology from Pampers (Swiffer Wet is basically a diaper on a stick).

A Talent Development Pipeline:  While P&G’s promote from within culture has been questioned, there is not denying the ability of P&G to develop world-class business leaders.   In recent years, 15% of Fortune 500 companies were led by a CEO who had started at P&G (a few examples include Steve Ballmer of Microsoft, Meg Whitman of eBay / HP, & Steve Cook of Intuit).  P&G invests a tremendous amount of resources in training and developing their people and they prefer to start with a clean slate with 90% of people joining P&G at entry level.  This approach creates a consistent culture of leadership that provides stability in even in difficult times.  It also provides loyalty that is rarely seen in today’s business environment.  People will stay at P&G for decades because of the opportunities, something that isnt exactly a hallmark of Silicon Valley.

A Consumer Is Boss Mindset:  P&G has always put the consumer first and basically invented market research in order to drive many of their product decisions.  The mindset of understanding the consumer is also a reason P&G has always called Cincinnati home because it gives their employees a front row view at the lives of their consumer.  Its also why they opened office in New York City to understand the Prestige Beauty consumer and why their Skin Care and Baby Care divisions are establishing major presences in Asia.

Competing With Itself:  P&G is an expert at tiered marketing, launching brands in the same category in order to meet diverse consumer needs (back to the Consumer Is Boss mindset).  In Baby Care, they have both Pampers on the premium side and Luvs on the value side.  In Laundry, they have Tide, Era, Cheer, and Gain all in the same market.  These Brand Managers might only sit 20 feet apart at the office but they are competing fiercely with each other instead of letting a competitor beat them.  This is part of the reason that P&G has been able to develop over 25 Billion Dollar brands.

Old Spice takes social engagement to a whole new level

Hands down one of my favorite TV commercials in recent memory has to be the Old Spice “Smell Like a Man, Man” campaign starring @IsaiahMustafa.  You probably know it better as the “I’m on a Horse” ad.  Not only did the campaign take home multiple awards at Cannes this year, but it truly crossed over to pop culture (my favorite is “I’m on a cake”).

Now the Old Spice team has dialed it up through a stellar social media campaign that takes engagement to a whole new level.  Lots of brands have used Twitter as a way to have a dialogue with consumers.  But in what I think is a first, Old Spice is actually doing a YouTube video response to people who mention the Old Spice campaign on Twitter.  Even better, the video responses actually have Isaiah Mustafa responding in character in the video.  So far celebs like @TheEllenShow, @ApoloOhno and @KevinRose have been lucky enough to receive responses.    My personal favorite has to be the response to @TheEllenShow [embedded video below]


Old Spice Responds to @TheEllenShow

Disclaimer – I work at P&G, which owns the Old Spice brand.  But it is still a really cool digital marketing campaign.

The 21st Century Dad – The newest target market for Brand Managers

Man of the House

An interesting trend has been cropping up over the past few years as marketers have begun to pay an increasing attention to dads as a target consumer.  It is a trend that has merit thanks in part to a changing consumer.  As Nielsen pointed out in a study last year:

the traditional roles of men and women are being redefined to better reflect today’s social norms. Today’s American households are looking less like Donna Reed—the paradigm for the ideal 1950’s family—and more like Mr. Mom.

This same Nielsen study also showed that “almost one-third of men are now the principal shoppers in the household.”  Not only are men carrying more of the responsibility for shopping, they are also spending more on these trips.  Case in point, in just the past five years, men have increased the average dollar basket size (ie amount they spent) by 56% on grocery trips.

“Daddy Like”

At the forefront of marketing to this changing consumer are brands like Toyota and Klondike.

Toyota for instance sent the tone with their latest campaign for the Sienna Minivan.  Under the tagline of “Daddy Likes”, the campaign features two parents who express their awesomeness through their Sienna.  Probably the most memorable part of the campaign is the “Swagger Wagon” music video, which has received over 3MM views on YouTube in just its first month.  Klondike on the hand just recently launched their “Everyman Challenges.” To kick off the campaign, the brand is using Adam Carolla in a very Dad like video called “Pack the Car.”

And finally while Mommy Bloggers have gotten all the love over the years, it looks like Dads will finally have their turn at the inaugural Modern Media Man Summit in September.  Given the advisory board includes folks like Jason Falls, Clay Nichols and David Armano, I have high hopes that this new conference will only continue to grow the attention behind the rising importance of Dads.

Man of the House

With this very trend in mind, P&G Productions last week launched Man of the House.   Created in partnership with the folks at Barefoot Proximity, Man of the House has been one of my favorite projects over the past few months.   So what is it?  Well in the words of our editor, “Man of the House is the real man’s magazine, a guide for the jack of all trades trying to be better – at work and at home, as a father and as a husband.”  It is also a site that we have created with a ton of great partners including Share This, Associated Content, Get Satisfaction, Six Apart and countless others.

Like everything on the Web, Man of the House is a constant work in progress so I would love to hear your feedback… both on the site, as well as our  Facebook Fan Page and Twitter Feed.  I am pretty excited about how the property has turned out and where it is going over the next few months, especially as more brands recognize the potential for Dads as a marketing target.