US consumer goods firm Clorox is cutting its adspend as it shifts more of its marketing outlay into trade promotion.
Over the summer, the group said it would keep its ad budget flat in the financial year to June 2004 after two years of double-digit percentage hikes [WAMN: 14-Aug-03]. However, its results for the fiscal first quarter reveal that adspend dropped 4.5% to $106 million (€92.3m; £63.5m).
Similar reductions are likely for the rest of the year after the company analysed its marketing outlay and concluded that some of its brands in certain circumstances responded to trade promotion better than they did to advertising.
Nevertheless, president/ceo Jerry Johnston insists that at 10.1% of sales, Clorox's adspend remains high for a packaged goods firm.
The group's agencies include DDB Worldwide in San Francisco, which handles Clorox bleach, one of the brands affected by the shift in spend.
For its fiscal Q1, the firm posted an 11% fall in net earnings to $129m as sales stayed flat at $1.05 billion.
Data sourced from: AdAge.com; additional content by WARC staff