The man with the $6bn plan

Procter & Gamble's Jim Stengel is the most powerful marketing man on the planet. When he talks about consumer trends people listen
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im Stengel is the most reasonable and civilised of men - but he is still the stuff of nightmares for traditional media owners. Stengel has no doubt whatsoever that it's only a matter of time before consumers will be able to watch anything they want, when they want.

im Stengel is the most reasonable and civilised of men - but he is still the stuff of nightmares for traditional media owners. Stengel has no doubt whatsoever that it's only a matter of time before consumers will be able to watch anything they want, when they want.

"It will be totally on their terms. It will be a total on-demand world, and that's a profound and enormous change. I think the whole way that content and entertainment is delivered will totally change," predicts Stengel, a big fan of personal video recorders such as TiVo and Sky Plus.

Such views have become almost commonplace among media futurologists. The big difference with Stengel is that he has billions of dollars of advertising spending at his disposal to back his beliefs about how consumer behaviour and the market are changing, and as a result, some of that money is already on the move away from traditional media.

Stengel is global marketing chief of Procter & Gamble, one of the world's largest packaged- goods manufacturers, which runs a $6bn a year communications budget with a worldwide marketing staff of 3,800. The influence of the biggest marketer in the world is likely to get even greater if, as expected, P&G's planned $57bn acquisition of Gillette gets the go-ahead from regulators later this year.

The media industry got a severe fright earlier this month when, according to US reports, P&G just decided to cut its "upfront" advertising spending on cable television in the US by 25 per cent, with terrestrial television budgets getting trimmed by 5 per cent. P&G could, of course, re-enter the market and buy more airtime later next year if it chooses to do so. The negotiations on next season's advertising spending in the US are still continuing, so Stengel declines to discuss precise numbers, but a shift in the balance of spending is clearly under way. "I don't have a strategy to move out of TV. I don't have a strategy to move to the internet. We have a strategy to be with the consumer and how she's changing," says Stengel, who will have to start talking about "he" as well as "she" when the Gillette deal is done.

The approach is designed to be in tune with the marketing needs of individual brands in individual countries. Some of the advertising for teenage brands, for instance, will inevitably migrate to the internet or wherever teenage customers can be reached. "I'm not saying that for certain brands for certain countries for certain reasons we couldn't have dramatic changes in television, but it's not a strategy. Our strategy is to do what's right for the business and the consumer. When you gross that up at the corporate level, you are seeing some change," Stengel explains.

The P&G marketing director has so much more sophisticated data at his fingertips these days that if an American cable channel is being squeezed in the ever more fragmented television market, and the price of its advertising is disproportionately expensive, the disparity shows up immediately and action is taken.

Stengel is talking in P&G's European headquarters in Geneva - in a former bank complete with vaults. In the spacious entrance hall there is a wall of backlit cabinets of the sort that normally contain art or antiquities. Instead, each compartment contains an important P&G artefact - such as box of Tide or a container of Pantene shampoo. Both are examples of the 16 P&G brands, which also include Pampers, Olay and Head & Shoulders, each with sales of more than $1bn a year.

Stengel has revolutionised P&G marketing since taking over three years ago from Bob Wehling, who had been at the US company for 40 years. As the media audience continues to fragment, Stengel has concentrated on getting closer to the consumer and trying to discover how they can be "served and delighted in every way". In the old days, a company such as P&G "thought about the product and we thought about the advertising. We are now thinking much more about the experience".

Teams of P&G people, including top executives such as Stengel, are now going out to live in consumers' homes to experience the reality of their lives. A team that went to rural China found that women were washing their hair once a week in cold water. As a result, new shampoo formulations were produced that performed better in such circumstances. "I don't like focus groups and I wish we would stop them, although they serve some purposes. It's about experiential research. It's about being in the environment," he stresses.

Stengel visited a poor single mother in Latin America and noticed two things relevant to his business. Despite her poverty, she had several premium shampoo brands, and a lot of the products she bought were from neighbours acting as local agents rather than from supermarkets. The presence of the premium PG shampoo was explained by a TV competition. She won a prize if the promoters knocked on her door and she could show the product. "In a small way, we are bringing in a little bit of hope, fun, joy," Stengel insists.

As to the home purchases, the P&G director says: "There is something we should do with that." In developed markets such as the US, the UK and Scandinavia, spending patterns are changing and the company "needs to be really challenging in how we approach communications". In markets such as Brazil, China and Mexico, television is still very much the primary medium. But even here, Stengel is looking for experimentation and change.

In an echo of P&G history, in Russia, a conventional ad was replaced by a gameshow between programmes sponsored by a detergent. It was P&G that originally pioneered radio soap opera. "You are seeing more investment in new media from us because that's where the consumer is. If the consumer is on the internet, if she's on a mobile, we have to find a way to market to her that is acceptable, involving and interesting," says Stengel.

The company is experimenting to find out what works best, he emphasises, because the future is not about taking an existing 30-second ad and dumping it on a mobile phone. The search for both new media channels has meant an enhanced role for media agencies such as Zenith, Starcom and Mediavest.

"They're helping us to navigate this world," says Stengel. "We are not trying to make winners or losers.

"We are trying to get the right leadership round the table for what this business needs, but what you find now is that the communication planning people are always at the table, and that's a change." He believes that there will never again be a single model or template of marketing. "But I think there will be an approach that we as a company must follow and we call it, 'The Consumer is Boss Approach to Marketing'."

Given the weight of Procter & Gamble in the industry, it's an approach that neither marketers nor traditional media owners will be able to ignore in future.