History of advertising: No 169: Ed Artzt's speech notes

When Ed Artzt, Procter & Gamble's chairman and chief executive, strode to the podium in the ballroom of West Virginia's Greenbrier to deliver the keynote address at the 1994 convention of the American Association of Advertising Agencies, nobody had any idea of the bombshell he was about to drop.

Certainly not the agency bosses and creative directors who had half-filled the hall and who – according to one observer – had expected no more than a mild telling-off.

This was hardly surprising. P&G might have been the world’s biggest advertiser but it had always played safe, having invested almost 90 per cent of its budget in TV advertising for as long as anybody could remember.

But what Artzt had to say not only sent panic through the US ad industry but agencies around the world.

Not content to administer a mere wrist-slapping, Artzt dragged his audience to the cliff edge, made them stare into the abyss and confront unpalatable truths.

Artzt warned of a future in which consumers would shun advertising unless adland gave them reason to pay attention.

"We can’t be sure that ad-supported TV programming will have a future in the world being created – a world of video-on-demand, pay-per-view and subscription TV," he declared. "There is a very real possibility that the majority of programmes people watch will not be advertiser-supported."

More than two decades after Artzt sounded the alarm, how much notice has been taken of it? Many observers believe his speech helped push agencies into the digital space.

Speaking recently, Artzt voiced concern that his speech spurred merger mania within the ad industry: "Apparently, there was a willingness to turn the threat of what we do about the future over to bigger entities."

Things you need to know

  • Artzt did not write his iconic speech. It was produced for him by Bob Herbold, then P&G’s vice-president of advertising and information services, who became Microsoft’s chief operating officer.
  • P&G’s adspend was $8.9 billion in 2015. About 30 per cent of its budget is invested in digital.
  • Beginning his career as a trainee account manager at a Los Angeles agency, Artzt is credited with doubling P&G’s profits during his five years in charge. He retired in 1995.