Kellogg Increases 2010 Ad Spend, Triples Social Media

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Multiple marketers, including Kraft, have recently spoken about lower pricing helping ad dollars go further in 2009. Now, Kellogg appears to be the first to signify that the more bang-for-buck trend will continue into 2010.

That decision could be the result of pricing rollbacks in last summer's upfront. Long-term deals made back then could benefit advertisers for the bulk of 2010.

Kellogg COO John Bryant told analysts Wednesday that "media deflation" was mostly a boon in Europe in 2009. But in 2010, it will be titled toward the U.S. "due to the timing of the upfront buy."

Even with media costs lowered, Kellogg upped spending in 2009 -- to an estimated $1.1 billion globally -- and will again this year, Bryant said. The company last year spent 9% of its $12.6 billion in global net sales on advertising, higher than the 7.2% of net revenues Kraft noted earlier this week.

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The increased spending/reduced pricing mix (and some efficiencies) helped secure a "double-digit increase in impressions" last year over 2008. And Kellogg expects an increase in the high-single-digit percentage range in 2010, Bryant said.

Kantar Media figures show that over the first nine months of 2009, Kellogg spent $452 million in measured media in the U.S. -- up from $416 million over the same period in 2008.

Also, the company is moving aggressively into social media, Bryant said, tripling spending over the past three years and experiencing "great returns on this investment." He did not offer specifics, but cited a Facebook Pop-Tarts page and Special K initiative as effective.

Separately, Kellogg has made efforts to improve the health benefits of its products, notably with cereals targeted at kids. There has been pressure from interest groups and some legislators for food marketers to help fight child obesity.

Bryant acknowledged the "intense increase in awareness around nutrition and health and wellness" and said the company believes its "portfolio is well placed" to compete effectively as it tinkers with products.

2 comments about "Kellogg Increases 2010 Ad Spend, Triples Social Media".
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  1. Howie Goldfarb from Blue Star Strategic Marketing, February 18, 2010 at 10:22 a.m.

    There comes a tipping point where the return on every extra dollar of Ad Spend turns negative. Be careful Kellogg!

  2. Jonathan Mirow from BroadbandVideo, Inc., February 19, 2010 at 12:53 p.m.

    I'm sending Kelloggs a sheep to shear from my Facebook farm, hopefully they'll send me back a digital drink and then we can play online blackjack together! I just love "friending" large corporate entities - it just makes the social media experience for me.

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