Consumer goods giants to boost adspend

13 April 2010

NEW YORK: Some of the biggest consumer goods companies in the US are set to increase their advertising expenditure this year, in order to support the introduction of a wide range of new products.

Procter & Gamble has previously outlined its intention to follow such a path to promote what chief executive Bob McDonald called its "strongest innovation programme" for three decades

Alongside targeting a "20% increase in consumer impressions" in its current financial year, the company is also planning to heighten its focus on in-store communications, packaging and design.

"We now are brand building from the eyes of the consumer towards us," said Phil Duncan, P&G's global design officer.

The principles behind this process are also being applied to P&G's agencies, which have been asked to adapt their strategies in specific ways.

"We're really asking our communications agencies to vet [an] idea first in-store, because that often can be the most challenging environment for us to communicate that idea," said Duncan.

"We're paying attention, finally, to the things that matter to consumers, and stripping out the things that don't, as well as thinking about footprints across the franchise," Duncan said.

The Febreze Home Collection of scented candles was introduced last year after in-depth research based on this kind of approach, and has since helped P&G gain two share points in this category.

Pantene, its haircare line, has also been subjected to a complete overhaul based on the preferences of customers, with the results of this process set to hit store shelves in the US in 2010 and Europe in 2011.

According to figures from Kantar, the research firm, Procter & Gamble boosted its US adspend for January by 6.3% year on year to $219.8m.

Sanford C Bernstein, the investment bank, has predicted that P&G will spend $2.77bn on US adspend in 2010 as a whole, up from the figure of $2.68bn posted in 2009.

More broadly, it forecast that some of the biggest FMCG firms in America will allocate 9.7% of their revenues to advertising this year, up from the total of 8.6% registered on this measure last year.

In keeping with this expectation, Kimberly-Clark has announced that it will back the goods emerging from its new product pipeline with a higher level of advertising support in 2010.

Tony Palmer, Kimberly-Clark's cmo, reported that the company raised its outlay on marketing by 70 basis points between 2004 and 2009.

Its communications expenditure is also pegged to grow at a rate faster than sales over the period to 2015, he added, with research and development also slated to receive greater resources.

The beneficiaries of this trend in 2010 will include additions to its Poise and Depend brands, a premium extension to Kotex, a disposable Kleenex hand towel and an improved version of Viva.

"You will see a significant uptick in our marketing investment in 2010, as we invest behind significant innovation," said Palmer.

Colgate-Palmolive, the oral care specialist, is also intending to unveil more high-end offerings, such as Colgate Sensitive Pro-Relief and ColgateProclinical toothpastes, and Hill's Science Diet pet food.

"We continue to plan for our advertising to grow in 2010, both on an absolute basis and as a ratio to sales," Ian Cook, Colgate's ceo, said.

Data sourced from Wall Street Journal/Reuters; additional content by Warc staff