In-Housing and AI Deliver Marketing Efficiencies for HP

Tim Cross 03 June, 2024 

Consumer electronics brand HP is one of a number of major advertisers which has continued to increase investment in marketing even during uncertain economic circumstances, repeatedly reporting higher marketing spend in its quarterly financial results. But like many others which are maintaining high levels of ad spend, HP is focussing on efficiency. Despite overall marketing spend increasing, HP has included digital advertising operations within its cost savings programme, looking for ways to save on its ongoing marketing operations even while increasing total spend.

Tim Brown, HP’s interim chief financial officer, said on HP’s Q2 earnings call last week that the company is aiming for gross annual structural cost savings of $1.6 billion across the company, through efficiencies in its core business and digital transformation initiatives.

On the latter, Brown said HP’s push to in-house its digital media capabilities is a key part of this strategy. HP has invested heavily in in-housing, and now has over 100 dedicated staff across media buying, planning, and operations.

The brand hasn’t taken media entirely in-house – just earlier this year it renewed its relationship with PHD, its global media agency. But it describes its approach as ‘hybrid’, with PHD primarily handling traditional media and HP’s in-house team taking charge of digital channels, which make up the majority of its ad spend. Its in-house team has been tasked with maximising the value of HP’s programmatic investments, according to Brown, helping drive efficiency.

HP also does some elements of creative work in-house as well, and on this front, Brown said AI tools are helping bring down costs. “Specifically, we are delivering savings through AI-enhanced capabilities, scaling content production and working towards translation cost efficiencies,” he said. He added that this is helping the brand “[improve] our NPI [new product introduction] marketing efficiency with lower agency costs and next-gen market insights and measurement”.

Focus on efficiency

Many major advertisers, including P&G, Unilever, and McDonald’s, have in recent years spoken of upping overall marketing spend, while also focussing on driving up their return on that ad spend. In some cases, this involves shifting the balance of which media brands are investing in. In other cases, it’s simply a case of having hard data to prove the value of each channel within an existing media plan.

HP’s efficiency drive is concentrated on digital, but there are signs it’s being applied across all marketing activities. Earlier this year HP announced a title partnership with F1 racing team Scuderia Ferrari – the kind of splashy sponsorship which wouldn’t usually be associated with an efficiency drive.

But even here, HP is keeping an eye on ROI. Without going into detail, HP CEO Enrique Lores said the partnership “improves the effectiveness and efficiency of our marketing spend”.

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About the Author:

Tim Cross is Assistant Editor at VideoWeek.
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