The Clorox Co., which owns brands like Glad trashbags, Rainbow Light vitamins and Kingsford charcoal, is putting advertising at the heart of its strategy in response to COVID-19 and the recession following in its wake.
Benno Dorer, the CEO of Clorox, discussed this on a quarterly call with investors, when he reported that the firm’s net year-on-year sales rose by 22% in its last three trading months, to $1.98 billion.
“Based on what we know today … I cannot see us touch advertising, sales, and promotion. Because … it’s not a tactical expense. It’s an investment in long-term growth,” he said. (For more, read WARC’s in-depth report: How Clorox will leverage power of advertising in a recession.)
Given the emphasis on sanitation, eating at home and personal health the Coronavirus has bequeathed, Clorox – which also owns an extensive, eponymous range of cleaning products – is well placed to serve consumer needs.
Rather than pulling back its adspend and enjoying an unanticipated boom, however, Clorox’s management insists an investment in advertising is an enterprise-wide priority.
In the last three months, its ad:sales ratio of 11%, noted Dorer, was a full percentage point above the average level that the company is aiming for.
“While 10% continues to be the level, long term, that we’re comfortable with, we see a particular opportunity at this time to invest in this pivotal opportunity that we have for our company to accelerate growth,” he said.
“For us, advertising, sales [and] promotion is not a quarterly expense. It’s a long-term investment in the health of our brands.”
And Dorer, who is the outgoing CEO of Clorox but will retain his position as chair of the firm, suggested that the recession could be a moment to further its emphasis on advertising.
“We will remain committed to spending the dollars,” said Dorer. “And, frankly, if the recession gets worse, that’s even more of a reason for us to spend on advertising, sales and promotion … at this time when people are looking at trusted brands to meet their needs.
“We have many of those trusted brands that people rely on, in particular, during a recession.”
Sourced from WARC