• Cincinnati Enquirer, Thursday, April 29, 2010 10:46 AM

Proctor & Gamble, which trimmed U.S. ad spending by more than 15% last year, is pumping more money into marketing, promotions and new products to return the company to its traditional growth range, David Holthaus reports. A pipeline full of new products is driving the increased spending, executives say, but the company also hopes to lure back consumers who ditched its brands for cheaper products.

"P&G has watched its U.S. market share erode over the past 18 months as consumers traded down from P&G's premium-priced portfolio to value brands," points out Bill Chappell, an analyst with Atlanta-based investment firm SunTrust Robinson Humphrey.

In the last six months of 2009, spending on Gillette, Pampers and Tide alone rose 18%, according to Kantar Media data. P&G says that it was able to maintain, and even increase, its advertising presence because rates fell during the recession, but it plans to generate 20% more impression in its current fiscal year.

Meanwhile, P&G's fourth-quarter profit forecast this morning trailed analysts' estimates and it says annual sales may be lower than it anticipated, Bloomberg BusinessWeek's Mark Clothier reports. P&G said in January that earnings for the last two quarters of the fiscal year would be lower because of the investment in new products.

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