Procter & Gamble‘s concerns about where its ads were showing up online contributed to a $140 million cutback in the company’s digital ad spending last quarter, the company said Thursday. That helped the world’s biggest advertiser beat earnings expectations. Perhaps even more noteworthy, however, organic sales outperformed both analyst forecasts and key rivals at 2% growth despite the drop in ad support.
P&G didn’t call out YouTube, the subject of many marketers’ ire earlier this year, in its fiscal fourth-quarter earnings release, but did say digital ad spending fell because of choices to “temporarily restrict spending in digital forums where our ads were not being placed according to our standards and specifications.”
Those cuts amounted to nearly a percentage point of profit margin for the quarter, with cuts to agency and production fees further boosting profits.
People familiar with the matter said P&G left YouTube in March over brand-safety issues, though P&G has also had problems with ads appearing on video content that didn’t match its goals. It’s unclear whether or to what extent the digital cuts came from other venues, though Chief Financial Officer Jon Moeller in a media call also noted Chief Brand Officer Marc Pritchard’s broader efforts to eliminate “a significant amount of waste” in the digital media supply chain.
YouTube parent Google reported strong revenue growth last quarter despite what appears to be a dwindling advertiser brand-safety revolt. But P&G isn’t in a hurry to resume spending either. Despite the cuts P&G had “very strong relative organic sales growth,” Moeller said. “So we stand in pretty good net as a result of all those choices.”
Asked whether P&G sees any need to put that…