Procter and Gamble has done one thing amazingly well since the
2008 financial crisis: grow sales. But that growth has come at a price. The
company spends nearly $10 billion on advertising -- that's billion and its
ad budget is increasingly hurting the company's ability to return earnings per
share to investors. P&G's ad budget has grown a lot faster than its
sales have grown, according to P&G's annual report through
June 2011:
The world's largest marketer, whose $10 billion annual ad budget has
hurt the company's margins.P&G has decided to lay off 1,600
staffers, including marketers, as part of a cost-cutting
exercise.Its CEO CEO Robert whose $10 billion annual ad
budget has hurt the company's margins has decided to cut flab and would
have to "moderate"
his ad budget because Facebook and Google can be "more efficient" than the
traditional media that usually eats the lion's share of P&G's ad budget.
This is coming from the man who increased P&G's adspend by a staggering 24 percent over the two years through October 2011, even though sales rose only 6 percent in the same period. Many expertis feel that P&G's Old Spice campaign is a textbook example of what the entire company should be doing. The problem is that the entire company isn't doing it.
Procter and Gamble Sales vs Advertising Spends Numbers
2011 Sales:
$82.6 billion
Ads: $9.3 billion
Ads as a portion of sales: 11.3%
Ads: $9.3 billion
Ads as a portion of sales: 11.3%
2010 Sales:
$78.9 billion
Ads: $8.6 billion
Ads as a portion of sales: 10.9%
Ads: $8.6 billion
Ads as a portion of sales: 10.9%
2009 Sales: $76,694
Ads: $7.5billion
Ads as a portion of sales: 9.8%
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