P&G Advertising increased by around 14% year over year in its third quarter, which consisted of the three months that ended March 31, 2024, according to data released by P&G in its earnings call. In 2023, Procter & Gamble, the consumer goods giant that owns brands including Febreze, Head & Shoulders, and Pampers, spent about US $8 billion in advertising expenditures, according to Statista.
During the earnings call last Friday, Andre Schulten, CFO of Procter & Gamble Company, said that P&G continues “to invest in reach, frequency, and strong quality of communication across the markets. We are diligent in pre-ROI and post-event analyses to ensure we understand whether the spending is effective. And if you look at the results, I would argue it is.”
P&G Advertising: Product Innovation, Consumer Insights, and Great Copy
According to Schulten, “the strongest combinations of great product innovation with very sharp consumer insight, translated into great copy, drive strong results. So, if you look, for example, at our Skin and Personal Care business, Old Spice and Secret Total Body deodorant, great consumer insight, great product, great packaging, strong communication, and the business is growing 11% in North America.” Schulten’s comments on P&G advertising expenditures are in line with CEO Jan Moller’s statements during the prior earnings call in January when he said: ‘If you look at the amount of innovation that’s coming to market currently and in the future if you look at the opportunity to fully penetrate households with that innovation in ways that delights [consumers] and improves their lives, now is not the time to be pulling back on investments and marketing, or commercialization efforts of that innovation…and that’s where the majority of the incremental spend has and will come from.’
“Now is not the time to be pulling back on investments and marketing, or commercialization.”
P&G Advertising: Expandable Category Home Care
Schulten cited Home Care as an “expandable category” going forward: “If you look at our Home Care portfolio, those are expandable categories. With PowerMop, for example, getting new users to use Febreeze plug-ins, those P&G advertising investments grow the market and grow our share within the market. So expandable categories are a big investment area for us. So, we continue to drive high levels of discipline. We will not spend if there’s no ROI. And you’re right, we’re watching the same and asking the same question to ensure that we remain on the right side of that line.”
Check out how P&G’s ‘Always’ Utilizes the 4R Framework.
Savings through Increase in Productivity
Regarding P&G advertising spending growth, CFO Schulten noted that he thinks this will be “done business by business, geography by geography, ” to give you an answer. I’d point out that we plan on significant productivity to continue in the marketing spending area. So, in and of itself, there would be somewhere between $400 million and $500 million in productivity in the space. That is always up for discussion. Do you reinvest, or do you flow it through? And it will depend on the level of innovation we can drive. More innovation means more spending and, hopefully, better returns.”
