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.
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.