• by David Goetzl  @dgoetzl, December 11, 2008

Procter & Gamble plans to use the economic slowdown as an opportunity to purchase more advertising, but also leverage its position as the country's largest advertiser to drive costs down, CEO A.G. Lafley said Thursday. It's not cutting ad spending--believing that would lead to long-term damage--just looking for more bang for its buck.

There is "an opportunity for us to buy more media at a lower cost, and to increase our brands' share of voice relative to competitors," Lafley said at an analyst meeting. (P&G's ad spend was $5.2 billion in 2007--up from $4.9 billion the year before, according to Ad Age.

The chief executive said trimming spending in a downturn is tantamount to being penny-wise, pound-foolish. "Companies that pull back in tough times, miss [an] opportunity," he said.

Speaking more broadly about marketing tactics, such as in-store and other promotional efforts, Lafley said: "The key in recessionary periods is to continue making the brand-building investments in awareness, in trial and equity that enable our brands to grow through tough times, while also strengthening competitive positions when economies recover."

Lafley indicated that P&G is not expecting a turnaround anytime soon, saying it is hoping "to begin seeing early signs of economic recovery in the next year." Optimistic P&G can maintain a solid performance, Lafley added: "P&G is recession-resistant but not recession-proof."

Results so far in the fourth quarter have been softer than the third quarter, although not unexpected. And while growth rates are slowing, they are still improving, Lafley said. He cited Swiffer, Febreze and Olay Facial Moisturizers as brands that offer notable growth opportunities.

Lafley also said P&G is beginning to exit the pharmaceutical business in order to focus more on its traditional direct-purchase businesses. The company apparently will continue to market Rx Actonel, which generates significant spending, until its patent protection runs out. And that appears to be the case for three other prescription brands--including Enablex, although divestitures are a possibility.