• Financial Times, Friday, May 1, 2009 10:45 AM

Packaged-goods companies are reaping the benefits of the recession when it comes to advertising. Procter & Gamble, the world's largest advertiser, forecasts that a buyer's market in advertising and media will continue this year as car companies and banks scale back their marketing spending.

P&G says its selling, general and administrative expenses fell $800 million, or 13%, in the first quarter, compared to last year, which "reflects lower marketing expenses and increasing media delivery." P&G's global marketing budget is about $8 billion. "It's been a buyer's market," says chief executive AG Lafley. P&G got more for less from its media suppliers, which helped offset costs from money-saving coupons and in-store efforts to lure budget-conscious shoppers.

In the near term the trend will likely continue, and maybe even intensify, Lafley says. Ian Cook, CEO of Colgate-Palmolive, agrees. He says his company has seen up to 25% declines in advertising costs in differing media and markets since late last year. "We took advantage of that and expect to take advantage of it further in 2009," Cook says.

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