Meet Procter & Gamble

In the vast world of marketing and advertising, James Stengel just may be the king. He is P&G's global marketing officer, a post he has held for six years when the average tenure of a chief marketing officer is less than two. Stengel sat down recently with Fortune 's Geoff Colvin to talk about consumer power, the value of brands, the decline of mass media etc. Edited excerpts follow.

What's the best marketing you've seen lately?

Outside P&G, I think Harry Potter. You had to be dead to miss it. The whole way that Harry Potter has engaged people has been a phenomenon that any brand or business would aspire to.

You are in a great position to evaluate consumer trends. What is the most important thing you are seeing?

The biggest thing going on with consumers is that they want to trust something. They want to be understood, they want to be respected and they want to be listened to. They don't want to be talked to. People really do care what's behind the brand, what's behind the business. They care about the values of a brand and the values of a company. We can never forget that. Businesses and brands that are breaking records are those that inspire trust and affection and loyalty by being authentic, by not being arrogant, and by being empathetic to those they serve.

'Immersion research' means you spend time with consumers in their homes or other settings, rather than in focus groups. Can you explain?

At P&G, we all do that kind of thing. We all go out and really spend time with consumers, especially those who are not like us. I had a wonderful field visit in Latin America on a recent trip - I went into the home of a woman who had very little money. She was tremendously proud of her children and her home. Our brands play an important role in her household, because though she didn't have much disposable income, she spent some of it on the kind of brands that we sell. It was important to understand what role our brands played in her life.

Two years ago P&G was spending 85% of its marketing budget on 30-second TV spots. What is the proportion now, and what will it be in five years?

The trend of the past five years will continue, which is that TV advertising will go down as a percentage of our spending, and we will continue to move money to where the consumers are. The interesting news in all of this is that consumers are spending more time with media than ever. If the content is good, consumers will spend an awful lot of time with media. That is what Harry Potter proved.

It is very difficult to maintain a tangible product advantage for any length of time. Is that a problem for P&G?

No, it's not a problem. I hate it when someone says they're in a commodity category. We don't accept that there are any commodity categories. We are growing Charmin and Bounty very well, and if there is any category that people could say is a commodity, it's paper towels and tissues. We have developed tremendous equities, tremendous loyalties from our consumers. So, no, I think that is a cop-out. That is bad marketing and an excuse.

What gives a brand power?

If you go back at P&G, and in a lot of the industry, we often thought of our brands in terms of functional benefits. But the equity of great brands has to be something that a consumer finds inspirational and an organization finds inspirational. You know, our baby-care business didn't start growing aggressively until we changed Pampers from being about dryness to being about helping mom with her baby's development. That was a sea change. Or look at all the different areas we are in at Olay. That's because Olay is not just about being a pink fluid that moisturizes. It is about helping women look better and feel better as they age.

What's been the biggest change in yourself as you have adapted to this changing world of media and marketing?

There is so much to learn and there are so many interesting things happening, inside and outside the company. It is important to be inquisitive, to be searching. When I travel, I always think, is there a thought leader who is doing something interesting who I can drop in on? I always ask people their reaction to our company and what they are doing.