• Ad Age, Wednesday, May 2, 2007 11:30 AM

Procter & Gamble CFO Clayton Daley made it clear yesterday that the company will spend heavily on marketing for its fiscal year starting July 1. It's willing to sacrifice margin improvements for the sake of top-line growth.

P&G appears to be pulling back on measured media in what chairman-CEO A.G. Lafley told analysts was a shift toward in-store, the Internet and trial activity. But Lafley says P&G will still invest a lot of money in TV because it's "a hell of an efficient investment," particularly in developing markets.

Overall, Lafley says P&G ad spending as a percent of sales was "about 10%" in the fiscal third quarter--about where it was last year. The talk comes after two consecutive years in which P&G has trimmed reported ad spending as a share of sales, which peaked at 10.7% in 2004 and slid to 9.9% of sales last fiscal year. P&G reported sales up 8% to $18.7 billion, up 6% organically, or excluding acquisitions, divestitures and currency effects.

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