Procter & Gamble’s marketing spend increased both in absolute terms and as a proportion of sales in its fiscal third quarter (to March 31), and will remain high in the coming year as the consumer goods colossus instigates new product launches.
The announcement, from chief financial officer Clayton Daley, came as P&G posted a 16% year-on-year rise in net earnings to $1.04 billion (€1.15bn; £0.71bn). Its results were boosted by the first full quarterly contribution from the Clairol haircare unit purchased last year from Bristol-Myers Squibb. The newly acquired brand’s intensive marketing activity was the major factor in raising P&G’s adspend.
Excluding restructuring costs and goodwill amortisation, earnings increased 12% to $1.19bn, while sales rose 10% in volume and 4% in value to $9.9bn. P&G was able to offset the effects of South American economic turmoil with healthy volume growth in China and central and eastern Europe.
The group predicts “mid single digit” percentage sales growth for the current quarter, while for the fiscal year ending in 2003 expansion is expected to be at the lower end of the 4%–6% range P&G has set as its long-term target.
Data sourced from: AdAge.com; additional content by WARC staff