Procter & Gamble cuts US advertising spending massively
Cost-cutting is the order of the day in the U.S. advertising market: Following Coca-Cola, General Motors, and Ford, consumer goods companies are now also cutting their marketing spending. Industry giant Procter & Gamble slashed its advertising spending by as much as 19.6 percent last quarter.
The US advertising market is in the grip of the red pen: after Coca-Cola, General Motors and Ford, consumer goods companies are now also reducing their marketing expenditure. As the German industry magazine Horizont.net reports, industry giant Procter & Gamble cut its advertising expenditure by 19.6 percent, or 135 million US dollars, in the last quarter. But it is not only the world's largest advertiser that is making substantial savings compared to the previous year. P&G's competitors Johnson & Johnson (8.6 percent), L'Oréal (6.6 percent) and Unilever (4.1 percent) also cut back on marketing. The reasons for the cuts include the rise in raw material prices, high inflation rates and lower consumer spending, writes the American industry magazine AdAge.
P&G has made substantial savings in the magazine and TV segments in particular: compared to the same quarter of the previous year, the company saved USD 44 million in advertising money for magazines, and USD 144 million for TV advertising in May of this year alone.
The poor state of the US advertising market is also confirmed by the recently published "Insider's Report on Advertising Expenditures", an annual outlook on the advertising economy. Bob Coen, on whose research the report is based, has reduced his forecast for the US market from 3.7 percent to 2 percent. The negative mood is also spreading to the global market: Growth expectations of 4.6 percent in December 2007 had to be scaled back to 4.4 percent.
P&G has made substantial savings in the magazine and TV segments in particular: compared to the same quarter of the previous year, the company saved USD 44 million in advertising money for magazines, and USD 144 million for TV advertising in May of this year alone.
The poor state of the US advertising market is also confirmed by the recently published "Insider's Report on Advertising Expenditures", an annual outlook on the advertising economy. Bob Coen, on whose research the report is based, has reduced his forecast for the US market from 3.7 percent to 2 percent. The negative mood is also spreading to the global market: Growth expectations of 4.6 percent in December 2007 had to be scaled back to 4.4 percent.
