P&G’s drop in ad spend helped preserve strong profit margins despite tepid sales, but, according to the Trian report, those gains should have gone to “other forms of brand-building to regain lost market share. Instead, management chose not to reinvest, in our view benefitting near-term earnings at the expense of long-term growth.”
It remains to be seen how Peltz’s potential board entrance will affect P&G’s advertising or Marc Pritchard, the company’s chief Brand Officer and one of the most vocal brand executives on transparency issues in digital media.
“It doesn't matter about me. What really matters is the employees of P&G, the community in which we operate and the shareholders,” Pritchard told AdExchanger in October, the week before stockholders voted, about the Trian move.
“Splitting the company into three is a very bad idea,” he said. “We've done a lot of analysis that indicates that it would add a lot more cost to the business.”