Procter & Gamble, long the bellwether for marketing, credits a rise in marketing expenditure of 11.6% to $8.18 billion with with a 7% sales increase in its fiscal year ended June 30. Over the past five years P&G’s top line growth has increased from 2% to 6%.
Outgoing CEO David Taylor says such expenditure is key to product innovation: “You have to help consumers understand what the product is, how to use it, and then help drive awareness and trial. And these investments have done that.” COO Jon Moeller is taking over from Taylor in November.
Taylor highlighted a number of ad campaigns including the ‘Every Degree Makes a Difference’ sustainability effort from Ariel.
P&G has also made changes to its media buying and tightened the screws on agencies. CFO Andre Shelton says he expects further “productivity improvements” plus improved “production costs and agency structure.” But he expects marketing budgets to stay at around 8% of sales in the foreseeable future.