Good News: Hershey Ups Ad Spending

Hershey's Kiss Echoing comments by Procter & Gamble's top executive, the CEO of chocolate maker Hershey Co. said lower ad pricing offers an opportunity to get more for less--and his company intends to take advantage of it. The company also plans to boost spending by as much as 25% to further capitalize.


Hershey CEO David West said that it became "a little bit more efficient to buy media in the latter part of 2008 and into '09 ... the GRP increase is much, much higher than the actual increase in the rate of the advertising."

Hershey spent some $161 million in advertising in 2008, a figure that would cross the $200 million line if the announced 20% to 25% projected increase this year materializes. That would come on top of a 26% jump in 2008.

A portion of Hershey's spending bump looks to go toward extending a branding campaign that began in mid-'08. Some monies are just now being deployed to give a lift to the flagging Kisses brand. (West said a decline there is "not acceptable.")



"We're also looking at adding GRPs on Twizzlers and a few other places," West told analysts on a call to discuss recent company results.

Hershey rode, in part, a 23% increase in spending in the recently completed fourth quarter to a net sales jump of 2.6% (to $1.4 billion), the company said.

Last month, P&G CEO A.G. Lafley said 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." Like Hershey, P&G is expected to increase spending.

West said Hershey would look for a 2% to 3% sales growth in 2009. The company could benefit from a yearning for comfort food in the midst of the recession.

Hershey, which broke outside its traditional media arena with a "Project Runway" integration last year, lays out detailed guidelines for the places it will not advertise. Included are shows and publications that offer "graphic and unnecessary violence" and "sensationalism involving delicate and controversial social subjects."

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