P&G Cuts Spending for Next Season's TV Ads

13 June 2005

The world's biggest advertiser, the consumer and household goods titan Procter & Gamble, is cutting back its US TV commercial commitments.

Reports from industry observers say the company has reduced its advance spending for next season, a move that may influence other big names.

Last year P&G was the top US advertiser, spending roughly $2.5 billion (€2.06bn; £1.37bn) on TV - more than 80% of its estimated $3 billion ad budget.

However, this season its commitments to cable channels will fall by as much as 25%, according to industry and advertising execs, while spending on broadcast networks will be cut by around 5%.

The decline in 30-second commercials, as the market becomes increasingly fragmented and ad skipping devices more popular, means spend is being channelled into other forms of TV advertising.

P&G is especially interested in product placement, a move which may force TV execs to work harder for the company's ad dollars and could give it more say in creative content.

The company's shift in its ad strategy has been hinted at for some time. Global marketing officer Jim Stengel said in February last year: "The must be, and is, life beyond the 30-secon TV spot. . . We must embrace the consumer's point of view about TV and create advertising consumers chose to watch."

Data sourced from Wall Street Journal Online; additional content by WARC staff