Giving Voice: P&G Bullish On Ad Spending

Tide to go adProcter & Gamble's top executive gave indications again Friday that the country's largest advertiser appears on track to continue in that role. CEO A.G. Lafley said marketing outlays have remained at their traditional levels, and P&G is looking to take advantage of the turmoil in the ad market to build share of voice.

In a call with investors, Lafley said the marketer of Tide and Crest is "absolutely not" trimming ad dollars. In fact, what's really going on is that "the advertising markets are softening--and for the same dollars, we're buying more delivery." That, in turn, has led to "improving our shares of voice" in multiple categories, he said.

Lafley first spoke about the opportunity for company dollars to go farther in December. As the country's largest advertiser, P&G spent some $5.2 billion in 2007, according to Ad Age.



P&G's steady marketing investment comes as the company said Friday it's looking to cut costs--to the tune of perhaps $1.2 billion a year. It cited opportunities in reducing the number of well-paid senior executives abroad, and even cutting travel expenses and opting for more video conferences.

Lafley also said P&G is shifting more dollars into coupons, hoping to dovetail with customer behavior in a recession. Spending has also gone up for in-store, point-of-purchase promotions. In some categories, digital spending has increased to some effect, he said.

"We do market-mix modeling, we actually calculate the return on investment on every brand on every element of the mix--and we move the dollars around to where the dollars are more effective and more efficient," Lafley said.

In the recently completed October-December period, P&G's net sales were down 3% to $20.4 billion, although exchange-rate issues played a role. Organic sales rose 2%.

In 2009, the company expects organic sales growth of 2% to 5%.

"We're actually fortunate we're still in an industry that's growing," Lafley said. "It's slow. It's a slog. But it's still growing."

1 comment about "Giving Voice: P&G Bullish On Ad Spending".
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  1. R.J. Lewis from e-Healthcare Solutions, LLC, February 2, 2009 at 5:53 p.m.

    This is exactly the right approach. P&G the brilliant marketers that they are (and have always been), are grabbing an opportunity with both hands. Bravo!

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