Procter & Gamble – written evidence (IRN0104)

Response to the House of Lords Select Committee on Communications Inquiry:

The Internet: To Regulate or Not to Regulate

About Procter & Gamble (P&G):

1. P&G is one of the world’s largest consumer goods companies and the Company behind favourite household brands such as Gillette, Ariel, Pampers, Olay, Fairy and Oral-B. Originally founded by an Englishman and an Irishman, we’re proud of our local heritage.

2. Globally, P&G has around 95,000 employees with operations in around 70 countries. Our brands are sold in 180+ countries in the world. P&G entered the UK market with an acquisition of Thomas Hedley & Co in the 1930s – P&G’s first international acquisition outside of North America.

3. P&G employs around 4,000 people in the UK & Ireland and has 12 sites, including Business sites, R&D Innovation Centres and Manufacturing Plants/Distribution Centres.

4. At P&G the consumer is boss. Everything we do starts and finishes with them. Our business model is simple:

1. We identify insights from talking with the consumer on what their needs are;

2. We use this consumer knowledge to innovate and produce quality products;

3. We create advertising to let consumers know about these products and their benefits; and

4. Consumers buy our products, use them and provided they deliver on their promises – as communicated in advertising – consumers re-buy, rewarding us with their loyalty.

5. P&G generally appears in the top 10 advertisers, by spend, when considering advertising across all mediums, in any given quarter. Our annual UK advertising spend is over £200 million and digital is in our top four investment choices alongside other mediums such as TV, radio, print, cinema and outdoor.

6. As a member of ISBA we are in support of the recommendations shared in their submission to the Committee. In addition to this, we have some additional observations which this submission focuses on that are specific to the areas of interest most pertinent to our consumers, and with the lens of the role of any internet regulation on digital advertising.

Regulatory Overview:

7. Whilst internet activity, in all its variance, is already covered by a broad set of legislation at both a domestic and international level, we at P&G believe the current status quo is not acceptable and needs attention. Consumers also perceive it to be less well-regulated than other channels.

8. P&G firmly supports the right of consumers to have their data properly safeguarded and privacy respected: a position we have held for a long time. As a responsible advertiser, we welcome the recently introduced EU General Data Protection Regulation (GDPR), which strengthens the law on data protection and privacy for all consumers within the European Union.

Post Brexit:

9. We, like ISBA, recognise and welcome the UK Government’s intent to align data legislation with the provisions of GDPR through the Data Protection Bill 2017.

10. We refer the Committee to our comments and concerns previously raised under its inquiry into UK advertising in a digital age.

11. At P&G everything we do starts and ends with the consumer. It is important that we are able to develop products, brands and advertising that are locally relevant to a UK consumer. As a multinational company, maintaining alignment post Brexit in key directives across data protection and e-Privacy, is therefore critical. The UK’s continuing leadership position in, and reliance on, digital advertising will be dependent on the continuing free movement of data between the UK and the EU.

Independent Self-Regulation of Digital Platforms:

12. We very much echo ISBA’s concerns with the digital advertising supply chain in its current format, and have vocally and proactively supported the drive for improvements to be made across all parts of the chain, led by our Chief Brand Officer, Marc Pritchard, with his first industry disrupting speech on this topic in January 2017. We want advertising to be a force for good for society and a force for growth.

13. At P&G we firmly believe that across any medium, the advertising content consumers see must be legal, honest, and truthful as advocated by the regulator ASA. Alongside this, it needs to be served to them in mediums that can be trusted. We believe that, as with all advertising, the content of the advertising and the advertising platforms – which includes traditional channels, publishers and social networks – need to hold themselves accountable. Otherwise, consumers will lose trust in the brands, in the advertising and in the platforms.

14. Whilst the ASA have made great progress regulating digital advertising we still consider there is an erosion of trust in digital advertising amongst consumers due to several factors. We do not believe that digital advertising has strong enough boundaries in terms of the volume of advertising served to consumers, placement of that advertising, or its format, in the same way that TV, radio, print and outdoor do. Digital advertising can therefore be obtrusive and interrupts consumers in unwanted ways.

15. At P&G we have always held ourselves accountable to ensure our advertising reaches the same high standards irrespective of the medium it is placed in. We hold all our advertising, whether it is native or influencer, to the same high standard of broadcast advertising and ensure that it is clear to the consumer and in compliance with the regulators.

16. When it came to the eroding trust in digital advertising, P&G saw it was time to take action. The steps we are taking are five-fold:

1. We said that the industry should move to one viewability standard so we know whether an advert has the chance to be seen.

2. Demanding independent third party accredited verification on all our digital advertising so we know that we are achieving the media reach and frequency that we have paid for.

3. Reinventing agency partnerships and ensuring we have transparent agency contracts so we know how our agency partners are spending our money.

4. Ensuring brand safety so that we know our adverts show up in the right environment, not alongside content that is alarmist, controversial, or inappropriate.

5. Insisting on eliminating advertising fraud so we know that humans, not robots, are seeing our adverts. At P&G we have decided that this is an area for outside experts who have a much higher probability of staying ahead of the criminals than we as a business ever will. We would direct the Committee to ISBA who can provide further perspective on what is happening in this area.

17. P&G is not alone in this journey, and efforts to transform the industry will require partnership and collaboration across the industry (i.e. all brands and businesses that advertise or provide a context in which to do so). We are therefore supportive of ISBA’s call on the digital platforms to consider the establishment of an independent body to provide oversight of content policies and their implementation on their platforms if it is funded well, and appropriately staffed. This should be complimentary to the existing work the ASA is undertaking to support regulation of this space.

18. We refer the Committee to page 4 of ISBA’s submission for further detail on the parameters for this.

Brand Safety:

19. At P&G we have zero tolerance for our adverts being associated with violence, bigotry or hatred. Brands are judged by the company they keep, which is why we have insisted on brand safety so we know our adverts show up in the right place, and not in or next to objectionable content. When platforms cannot deliver this, we remove or suspend placement of our advertising until it has been resolved. There is still work to do across the industry, but we are encouraged by the progress made over the past year to clean up the digital media supply chain - driven by the entire industry stepping up to take action.

20. We are supportive of ISBA in their ongoing commitments on behalf of the industry to maintain a proactive and robust dialogue with the digital industry to take appropriate action. We would direct the Committee to page 5 of ISBA’s submission for further detail on the important work they are also undertaking here.

June 2018

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