JC Penney Holds Market Spend, Increases Cinema Ads

JC Penney, one of the largest advertisers in Sunday night's Oscar broadcast, plans to maintain 2008 levels--or percentage of sales--in marketing investment this year. Still, barring a striking turnaround, the spending amount will decrease over the next 12 months, since sales are declining.

Separately, the company will adjust its media mix and look to shift dollars online, although much of the switch may come from newspapers rather than TV. CEO Mike Ullman said "extending our voice to younger customers [who may] not be reading the [newspaper] insert every week" is a goal. He added that spending on ads in cinemas is likely to increase as well.

As for maintaining the spending rate, he said: "We're not under-investing, but at the same time, we're not over-investing."

Sales for the retailer declined some 10% in the fourth quarter to $5.8 billion, and were down 7% for the year.

The company also may boost spending in the near term in markets where competitors such as Mervyns or Linens 'n Things have gone out of business. "We've clearly stepped up our messaging in those markets, and we're seeing the benefit of that," said Ken Hicks, president-chief merchandising officer.

The executives spoke on a call with investors to discuss fourth-quarter results.

The company had previously announced it would sponsor the latest tour from Rascal Flatts, which will include a Penney's brand from Ralph Lauren in its title.



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