consumer packaged goods

P&G Says It's 'Not The Time' To Pull Back On Marketing Spend

CPG behemoth P&G saw its stock value increased today on the strength of its earnings report for the quarter ending with December, 2023, which included a 4% increase in organic sales.

The company made it clear it considers its marketing investments an important ingredient in its growth. In an investors relations call, P&G Chairman, President and CEO Jon Moeller described the company’s strategy as being focused on  “superior innovations that are driven by deep consumer insights.” He cited products such as Charmin Smooth Tear Ultra Soft and the Gillette Labs razor as examples of such innovation.

P&G noted the impact of product “reinvestments” in contributing to increased expenses and partially offsetting some gains. This led to questions during the call about the size of such “reinvestments’ and the company’s marketing spending in particular.



“If you look at the opportunity to fully penetrate households with that innovation in ways that delights them and improves their lives, now is not the time to be pulling back on investments in marketing or commercialization efforts of that innovation,” Moeller said, noting that the company looks “very carefully” at such investments and was utilizing new tools and data sets to increase reach and effectiveness for its advertising investments.

Responding to a question about what drives volume growth, P&G CFO Andre Schulten said, “What drives it is strong innovation focused on growing the market, and strong communication of that innovation in a very targeted way: leveraging our capability to be very detailed and very intentional on who we talk to, at what point in time, [and] with what messaging,”

He cited the launch of Olay Super Serum in the U.S. as “the most successful new serum in the category,” with 30% of its users category newcomers.

Moeller added that the launch of Head & Shoulders Bare helped the brand achieve 8% growth fiscal year-to-date.

“This is what we need to keep doing, and that's why we talk about the best path forward being doubling down on exactly these things,” he added. “They do drive market, they do drive volume, they do drive sales,, and they do it profitably.”

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