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Is Web The Soap In P&G's Eye?

In case you missed it, Procter & Gamble Co., famous for its status as the "world's largest advertiser," recently discovered the Internet.

So, in order to bring its advertising muscle to the online world, the company hosted a summit on Aug. 20 and 21 at its Cincinnati headquarters to discuss the "Future of Advertising."

The summit (ironically called "FAST," for "Future of Advertising Stakeholders") made headlines for the large sums of money its host spent on the two-day event, as well as for P&G's terribly daring act of inviting its biggest competitors, including arch-rivals Unilever and Colgate-Palmolive. But what is notably missing in the reviews is any discussion of good ideas conceived there.

Perhaps the lack of good ideas has a simple explanation: for all of its lip-service to the notion of embracing interactive technology, Procter & Gamble and other consumer giants demonstrate remarkably little understanding of interactive technology itself, much less how the Internet can help both sellers and buyers of consumer products.

It's the classic example of thinking inside the box -- in this case, the "box" being that of television.

For example, a large portion of the summit, according to attendants, was devoted to the goal of "moving beyond the banner." By this, it seems, the package-goods companies seek to move towards more video commercials on line.

For good reason. Studies show that the larger and more emotionally compelling the advertising, the more effective it is at burning the brand name into media-consuming brains. Without story-based ad campaigns like "I can't believe it's not butter" and "Don't squeeze the Charmin" it's not clear that Unilever and P&G would have become such huge branding empires. The companies want to use these proven strategies in the new medium -- if they could only figure out how.

"P&G and the others want to push for advertising that looks a lot more like TV," said Bernhard Warner, senior reporter for IQ, the online component of Adweek Magazine, who attended the summit. "And publishers are very resistant to this."

Consumers, too, have reason to resist Internet commercials, with their associated big download times and wasted CPU cycles. The FAST participants are barking up the wrong tree.

"P&G marketers stated that they are willing to dedicate 80 percent of their budget to 'things that look like Internet,'" said Warner. "But the problem is that they cannot figure out what is the best use of the medium."

"They realize that the Internet is not like TV," he said, "And the market reach is not quite there yet, but you can do some pretty neat things with getting people to interact with the Bounty or Crest brand."

These "neat things," however, do not necessarily include a focus on perhaps the most powerful way that a consumer can interact with a brand, by making a satisfying purhase.

And, for all the hand-wringing about the difficulties of branding on line, the summit paid very little attention to the amazing promise of selling online: the business practice that helped make Dell Computer, Cisco Systems and the arguable direct-selling P&G, Unilever and Colgate-Palmolive of Wall Street's high-tech corridor.

With the increasing importance of e-commerce, and growing numbers of consumers online, many of whom are believed to have decreased television watching to accommodate Web-time, the old guard could stand to lose if they do not upgrade their mentality and marketing for the electronic age.

"The web remains a dubious proposition for packaged goods, fast food, and so forth - - that is, the world's biggest advertisers - - all of whom hawk brands over product," said Jeff O'Brien, San Francisco-based editor of "MC: Technology Marketing Intelligence," an AdWeek publication that focuses on high-tech advertising. "Nobody wants a relationship with Tide, and god knows nobody wants to go to"

Nobody has to go to, either. "On the Internet, the consumer has control," said John Kamp, Senior Vice President of the American Association of Advertising Agencies in Washington, D.C.. According to Kamp, the Net offers more than challenges to traditional companies. It also offers opportunities.

"The Internet is the medium of the 21st century that is likely to change everything," said Kamp. "It is the medium where you can have personal relationships with the consumer."

"The only way to get the consumer to connect," said Kamp, "is to develop a relationship of trust."

Then again, he said, although "there was a recognition at the summit that early-adopters and heavy Net-users are not brand-loyal, the next generation of Net-users may behave in more traditional brand-loyal ways."

I hope not.

As heretical as it might sound, the Internet has the potential to change the face of marketing as we know it. Instead of brand-loyalty, even second-generation mass-market Internet consumers may opt for convenience, features and price.

In other words, product.

By Rebecca Eisenberg, CBS MarketWatch

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