P&G Cuts Agencies 40% in First Wave of Consolidation Drive
Posted in: Uncategorized
Procter & Gamble Co. will likely keep marketing spending flat as a share of sales this fiscal year, but global media spending will still rise as the company keeps plowing savings from agency and production costs into media.
Such cuts helped P&G beat analyst forecasts for core earnings per share excluding a host of restructuring costs even as it fell well short of projections for the top line last quarter. Organic sales growth was “rounded down” to flat vs. consensus analyst projections for 2% growth for the quarter ended June 30.
One area where P&G is meeting targets is marketing savings. For the just-concluded fiscal year, the company cut the number of agencies it works with by 40% globally, trimming agency and production spending by around 15%, or $300 million, with “more savings ahead of us” in year two,” said Chief Financial Officer Jon Moeller, “most of which will be reinvested in stronger advertising programs.”
Post a Comment