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How P&G Plans To Cut Marketing Costs By $1 Billion

Procter & Gamble's plan to reduce marketing costs by $1 billion by 2016 is based largely on restraining cost increases, rather than cutting spending, CEO Bob McDonald told CampaignAsia.

McDonald said that he expects P&G's FY 2012 marketing spending to be "roughly on par" with FY 2011's (ended June 2011) $9.3 billion.

"Similar to R&D, we are not looking to make dramatic cuts in the [marketing] support of our brands," McDonald said. "In fact, we want to increase reach, increase frequency and increase the effectiveness of our advertising impressions with consumers...Even delivering a modest level of efficiency each year can amount to nearly a billion dollars of savings, versus simply letting these costs grow at the same rate as sales."

McDonald confirmed that P&G is seeking to use technology to shift spending from television in particular to digital and mobile advertising, and to "more effectively and efficiently target consumers, allowing us to build one-on-one personal relationships with every consumer."

The CEO acknowledged that some marketing positions may be among the roughly 5,700 jobs to be eliminated by P&G by June 2013 through "selective hiring, attrition and restructuring," but added that those decisions have yet to be made.

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