Companies maintaining or increasing ad spending in the current recession
1-800-Flowers.com: Increased its marketing budget 100% this year. (USA Today
5/6/09)
Accenture: Aggressively boosting marketing expenditures as a percentage of expected
sales. (Business Week 9/29/08)
Alberto-Culver’s Tresemmé: $49.5 million was spent on advertising in 2008, an
increase of 15.7% over the $42.8 million spent in 2007, and 58.7% more than the $31.2
million spent in 2006. Its product integration in Bravo’s “Project Runway” contributed to
sales growth in the double-digits over the past four years. In discussing Tresemmés
spending and its significant role in new Bravo program “The Fashion Show,” Spencer
Bahler, Alberto-Culver’s director for marketing communication, said “we feel it’s a very
smart investment, even during these difficult times.” (NYT 5/1/09)
Apple: Apple increased marketing and advertising during the last three months of 2008,
compared with the same period in 2007. They are now the second biggest technology
advertiser after Microsoft, having passed HP and IBM (companies with three times
Apple’s annual sales). Results: Apple gained more than two share points in 2008, and a
lift in brand equity scores (according to Brand Keys). (NYT 2/4/09)
Audi: The only car company at the Detroit auto show saying it would increase its ad
budget in 2009. CMO Scott Keogh said his spending would be 15% higher than last
year. He’s encouraged by Audi’s highest metrics ever from 2006 to 2008. Audi will return
to the Super Bowl for a second year and advertise during the Academy Awards as well.
Keogh said, “If the industry is generally locking the brakes by cutting [ad] spending, then
[sales and image] gains that may have taken five to six years we may be able to make in
two to three.” (Ad Age 1/19/09)
Avon: Avon Chairman and CEO Andrea Jung vowed that regardless of how stormy the
economy gets, the company won’t cut back on either its ad spending or sales-rep
initiatives. “We won’t manage this company for the short-term. We all know how that
movie ends,” she said. (MediaPost’s Marketing Daily 10/30/08)
Burger King: Burger Kink plans to take advantage of lower U.S. media rates and
advertise 20 to 25 percent more next year to highlight new products and value offerings.
CMO Russ Klein said it’s critical for the brand to boost spending now. “With the
economic downturn, it’s important for us to be front and center with value messaging,
innovation, and strategy. And there is strong historical evidence around companies that
step up with their innovation and advertising and their ability to move through economic
downturns, and they emerge with stronger brands on the other end.” TV will get the
biggest share of the increase. “There is no way to replace television, so that’s going to
get the largest single increase on the calendar.” (Nation’s Restaurant News 4/27/09; Ad
Age 4/20/09)
Coach: Coach did not cut its marketing budget during the 2001 recession. From 2000 to
2007, its sales rose 370 percent and its stock price rose 616 percent. According to its
2002 annual report, the “power of presentation and marketing were critical factors in
driving sales this year.” Those sales increased 20 percent. (JCK-Jewelers Circular
Keystone 11/1/08)
Coca-Cola Co.: Powerade launched a major comparative campaign against sports drink
category leader Gatorade in March. The company said that the new campaign
represents a bigger marketing investment for Powerade than the $15 million spent in
2008. The last major campaign for the brand was in 2001. (Ad Age 3/23/09)
ConAgra Foods: Spending $90 to $100 million on an April relaunch of Healthy Choice
foods. (NYT 4/3/09)
Culver’s Restaurants: Culver’s ended 2008 with a 10% sales growth as consumers
sought more value by trading down to fast food chains. Culver Vice President Chris
Contino said that means the time is right for an even greater push, so they are launching
their first-ever national advertising campaign. “This is our chance. We’re not cutting
budgets. We’re not going to bury our heads in the sand. This is our chance to find new
business. We’re making a statement. Externally, it’s to let our customers and guests
know we’re not going anywhere. And it’s also to let our franchisees know we’re still
strong.” (MediaPost Marketing Daily 2/19/09)
Dial: Will put $50 million in marketing support behind Purex detergent’s new 3-in-1
laundry detergent, fabric softener, and anti-static dryer sheets product alone. That’s
more than the brand has gotten in the past twenty years combined, and 150% more than
the $20 Dial spent on all its products in 2008. (Ad Age 5/18/09)
Dr Pepper Snapple Group: Boosting its marketing budget by up to 5%, saying that’s
what worked best in the last big downturn. Jim Trebilcock, head of marketing, said that
“at times like these, we believe if we invest in [our brands], we can make a pretty
significant impact on our business moving forward and actually strengthen and position
ourselves for consistent growth when we come out of this economic downturn.” (Ad Age
5/4/09 and Reuters 4/16/09)
Dunkin’ Donuts: Tough times call for serious measures. Dunkin’ has said that it will stay
top of mind by increasing ad spending up to 5% this year. It launched a $100 million ad
campaign in January 2009. According to TNS Media Intelligence, the chain spent $99
million during the first nine months of 2008. (Ad Age 1/5/09)
Energizer Holdings: Stuck to plans to boost ad spending. (Ad Age 2/4/08)
General Mills: The company has staunchly supported consumer marketing spending
increases (19% in the first half of fiscal 2009, while sales grew 11% to $7.5 billion during
the same period), and estimates that it will be up by double digits for the full year. CEO
Ken Powell has repeatedly said that it’s particularly important to support well-known
brands during the current economy. (Ad Age 2/17/09)
Glacéau Vitaminwater: Despite recession, it is proceeding with ambitious expansion
effort by spending $40-$50 million on a launch campaign for low-calorie line extension
Vitaminwater10. (NYT 4/1/09)
Heineken: A major ad push is planned for January 2009, which will include advertising
during the NFL playoffs and major-market spot buys during the Super Bowl. The brewer
said the new campaign will get a $7 million increase in TV support over 2008 levels. (Ad
Age 12/15/08)
H.J. Heinz: Its two-year plan calls for sales growth of 6%; 8-12% increases in consumer
marketing; 6-7% growth in operating income; 8-11% growth in earnings per share; and
operating free cash flow of approximately $850 million per year. CEO William R.
Johnson said that fiscal ’09 is “off to a good start.” (MediaPost’s Marketing Daily 8/14/08)
Hershey: Hershey’s fourth-quarter net income was up 51%, to $82 million. The company
boosted marketing 23% during the quarter, and 26% last year, to $161 million.
President-CEO David West projected a 20% to 25% marketing increase in 2009. (Ad
Age 1/27/09)
“Net sales and marketplace performance improved, validating our strategy of increasing
advertising and consumer investment behind core U.S. brands,” said David West. (Ad
Age 8/4/08)
Kellogg: Kellogg spent over $1 billion on advertising for the first time in 2007, and was
planning to increase its outlay in 2008. The company was widely praised in the past year
for sticking with its ad spending despite the recession. It credited its brand-building
efforts with its ability to pass on commodity cost increases to consumers. Mark Baynes,
Kellogg CMO, said, “The growth shown in our advertising spend over the last five years
remains a clear indication of the commitment and belief the company has to our brands
and categories. And the power of advertising is an essential part of our growth model.
This shows our major categories are highly responsive for strong advertising.” (Ad Age
9/8/08)
Second-quarter profits rose 9% and sales 11%, prompting the company to boost its full-
year outlook. CMO Baynes said, “We believe it’s critical, when the economy gets
tougher, that people should be seeing the value of our brands constantly. Brands are
much more than flakes in a box.” (Business Week 9/29/08)
Kellogg CEO David Mackay told investors that North American sales were up 7.4% and
said, “Our commitment to advertising investment is a key component of our strategy, and
our strong execution gives us the confidence that we will continue to achieve our goals.”
(Ad Age 8/4/08)
Kia: Ad spending increased 43% in 2008 vs. 2007. Its U.S. market share is up from
1.9% at the end of 2007 to 3.1% in April 2009. (USA Today 5/4/09)
Tim Chaney, Kia’s director of marketing, said that ad spend would jump 30% over 2007,
when they spent $217 million on ads. Kia spent $107 million from January through May
2008. David Angelo, of Kia agency David&Goliath, said, “While most manufacturers are
cutting their spend, Kia is increasing across all of its models because consumers are
prepared to consider other brands that represent values, and that creates an
opportunity.” (Brandweek 7/28/08)
Kimberly-Clark: To fight store brands and justify charging more than its rivals, Kimberly-
Clark is creating new iterations of tissue products and trying to forge a more personal
connection with consumers by spending heavily online and on TV. Says CEO Tom Falk,
“The worse thing you can do is pull in your brand-building spending and become more of
a commodity.” (Business Week 9/29/08)
Kitchen Aid: Whirlpool’s KitchenAid is returning to direct response television to promote
its stand mixer during holiday season. It is confident that the campaign will drive sales
despite the current economy. The infomercial will run most heavily on weekends through
the beginning of 2009 and could be extended beyond then. The campaign was budgeted
in the “millions of dollars,” though less than $10 million. (NYT 10/20/08)
Michael Kors: In 2009, the company plans to increase its advertising budget by 15 to 20
percent. (NYT 8/28/08)
Kraft: Chairman-CEO Irene Rosenfeld vowed to increase marketing spending to
between 8% and 9% of total sales by 2009. She noted that while some products (cheese
singles and Maxwell House coffee) have benefited from increased advertising, marketing
spending probably still wasn’t high enough across the board. She blamed insufficient
brand equity for Kraft’s cheese products for the inability to increase prices in line with
higher commodity costs. “The key to our future in cheese, as it is in so many of our
businesses, is continuing to ensure that we have invested appropriately in quality, in
marketing support and in innovation.” (Ad Age 2/4/08)
Kraft cited increased marketing and advertising spending as one reason for better-than-
expected sales gains in the second quarter. By staying top of mind with marketing, Kraft
was able to pull off a 7% price hike, neatly offsetting commodity costs without seeing
consumers defect to private-label rivals. (Ad Age 8/4/08)
Marketing investments in core brands have rebuilt Kraft’s pricing power, and Kraft is now
the market leader in 80% of its portfolio. CEO Irene Rosenfeld said that Kraft will
continue to invest in its brands during 2009. Despite missing analyst expectations in its
earning report, Kraft still plans to increase marketing spending to about 8% of sales. (Ad
Age 2/4/09)
L’Oréal: Increased marketing spending in recent quarters and plans to continue to do
so. Joseph Campinell, president of the consumer products division of L’Oréal USA, said
the strategy is working. “It has always been L’Oréal’s strategy that when times are tough,
you spend against the categories and grow your market share.” (Ad Age 5/18/09)
Louis Vuitton: The company plans to continue to boost its marketing budget. CEO Yves
Carcelle said, “We never change the long-term strategy because of short-term
problems.” Global revenue grew 14% during the first half of 2008. (Business Week
9/29/08)
McDonald’s: Neil Golden, CMO of McDonald’s USA, said in an interview: “I certainly
anticipate that our overall marketing investment will grow this year over last year, and I
believe it will grow in 2009 over 2008. I think that’s a reflection of the importance of
marketing and the system’s commitment to continuing to present the brand for all of the
different features that we offer.” (Ad Age 6/9/08)
Mercedes-Benz: 2008 ad spending increased 39.8% over 2007. Its U.S. market share
went from 1.6% in late 2008 to 1.8% in April 2009. (USA Today 5/4/09)
Mohawk Industries’ Karastan carpet: David Duncan, VP marketing for Mohawk, said,
“From our perspective, it’s very important to maintain our brand-marketing position, and
really try to increase our share of voice.” While it’s true that people aren’t buying lots of
carpet at the moment, but that doesn’t mean they aren’t craving it, and when the home
decorating industry picks up, “that share of voice will be worth more.” Duncan believes
the brand’s positioning as an investment is still on target. He’s predicting that 2009 will
be a no-growth year, “but we believe in the brand. The first reaction with any company is
to completely pull back the advertising. We don’t want to do that, because we believe we
have a competitive advantage.” (MediaPost’s Marketing Daily 10/15/08)
New York Life Insurance: Steven Rautenberg, SVP for corporate communications, said
that New York Life plans to increase its ad budget by 25 percent in 2009, to get across
the idea of “the selfless gift.” The company will spend almost $30 million in 2008. (NYT
11/10/08)
News Corp.: Ad spending increased 10.6% in first half 2008 over same period 2007,
according to TNS Media Intelligence. (Multichannel News 9/29/08)
PepsiCo: Ad spending increased 5% in first half 2008 over same period 2007, according
to TNS Media Intelligence. (Multichannel News 9/29/08)
Pillsbury: If the company can keep its commodity prices down, there’s no reason to
expect it will pare back its ad spend in 2009. (Mediaweek 12/17/08)
Procter & Gamble: According to an analyst’s report, P&G will make its fiscal year 2010,
starting in July 2009, “an investment year,” pulling back on earnings targets in order to
spend more on marketing and innovation for the long term. (Ad Age 5/11/09)
Chairman-CEO A.G. Lafley spoke about cutting various expenses, but the more than
10% of sales P&G spends on advertising seems to be off-limits for a similar squeeze.
He said that P&G would use marketing-mix modeling to attempt to deliver the “bang”
equivalent to spending 11% to 12% of sales on advertising while only spending about
10%. (Ad Age 8/11/08)
Reckitt Benckiser: Alexander Lacik, Reckitt’s general manager marketing US, said “We
keep spending above the line, whereas we see some competitors pulling back. We
believe in driving the equities of our brands.” The company posted 9% organic sales
growth in North America and Australia (8% growth worldwide), backed by an 8%
increase in global media spending on a constant currency basis, or a 26% increase
without the adjustment. (Ad Age 5/11/09)
Scotts: Scotts garden products company plans to hike marketing spending 12% this
year, including $7-$8 million in the U.S., after a 6% cut in global ad spending last year to
$142.4 million. It’s also launching some of its biggest new product initiatives in years.
(Ad Age 5/4/09)
Sunny Delight Beverages: Spent $26 million on U.S. media in 2007, $31 million during
the first ten months of 2008, and launched a $40 million marketing push in January
2009. Sunny D’s sales increased 3.2% in 2008, and the new campaign is intended to
gain more market share from consumers trading down to lower-priced products.
(Brandweek 1/19/09)
Tiffany: Tiffany did not curtail its marketing spend at all during the 2001 recession, and
the company’s sales not only rose during that time but also have doubled since then.
CEO Michael J. Kowalski said at the time, “Despite short-term macroeconomic
challenges, we will continue to pursue those established and time-tested growth
strategies that have been the foundation of our long-term success. Tiffany is about
things that last. And that perspective is perhaps more important today than at any time in
our history.” (JCK-Jewelers Circular Keystone 11/1/08)
Tropicana: The new campaign, launched in January 2009, has a budget estimated at
more than $35 million, which executives at Tropicana describe as significantly larger
than in recent years. (NYT 1/8/09)
Under Armour: Committed to devoting as much as 13% of its net revenue (estimated to
jump 25% from the year-prior period to $750 million to $765 million) to marketing. (Ad
Age 1/19/09)
Unilever: CEO Paul Polman said on a May 7 earnings conference call that the company
will step up spending through the rest of the year behind new product launches. “There’s
no better time [to hike spending], especially as a lot of others will cut support. The strong
brands have an opportunity to stand out even more and build strong franchises. (Ad Age
5/11/09 and 5/18/09)
Verizon: Ad spending increased 7.6% in first half 2008 over same period 2007,
according to TNS Media Intelligence. (Multichannel News 9/29/08)
Volkswagen: Raised ad spending 45.7% in 2008 vs. 2007. Its U.S. market share
increased from 1.4% at the end of 2008 to 1.9% in April 2009. 2009 ad expenditures will
be held even with 2008. Tim Ellis, U.S. VP marketing, said, “When we invest in
marketing, things happen. We think it’s important to stick to our roots and stick to our
value message. We’re getting a higher percentage of the dwindling marketplace. And
when this crazy situation comes straight side up again, we’ll be positioned to increase
our share even further.” (USA Today 5/4/09)
Walmart: Wal-Mart had better-than-expected results for the full fiscal year, with sales
climbing 7.2% to $401 billion. And the company said that an increase in 4th quarter ad
spending paid off, with U.S. consumer awareness of its “Save money, live better”
message jumping 80% this quarter over last year, leading to increased store traffic.
(MediaPost Marketing Daily 2/17/09)
Recently upped its advertising spending and returned to selling itself as a champion of
the low and middle-income consumer. (Business Week 9/29/08)
Walmart increased its measured media ad spending 82 percent January through May
2008 over the same period in 2007, as per Nielsen Monitor-Plus, and reported its best
monthly sales gain in June in four years. (Brandweek 7/28/08)
Welch’s: The company almost doubled its $10 million to $12 million ad budget for this
fiscal year and plans to maintain spending next year. Chris Heye, VP Marketing, said,
“As one of the more expensive items on the shelf, we had to tell consumers why we’re
worth it.” (Ad Age 5/18/09)
Welch’s repositioned its grape juice with an antioxidant message in 2007. After four
years of sales declines, the new positioning led it to a 4% sales increase for the 12-
month period ending in August 2008. That was enough to convince the company to
boost its ad budget by 50% for its latest effort, touting its purple Concord grape juice as
the original “Superfruit” in a $20 million campaign launching in November 2008.
(Brandweek 11/17/08)
Industries maintaining or increasing ad spending
TNS Media Intelligence reported that the financial services industry spending remained
relatively steady in 2008 as stronger spending by banks offset cuts by consumer lenders
and credit card firms. Restaurants and the food-and-candy categories registered
significant increases in ad spending. (WSJ 5/5/09)
Hospitals: Total ad spending by U.S. hospitals in 2008 was $1.23 billion, a slight
increase over 2007’s $1.20 billion, and more than twice as much as 2001, when
hospitals spent $493 million, according to TNS Media Intelligence. (NYT 5/4/09)
Local television stations reported that fast food restaurants and telecom are increasing
spending, but the biggest growth in spending is coming from trade schools.
(Broadcasting & Cable 4/20/09)
According to Nielsen Media Research, the quick-service restaurant category was the
only one to increase spending in 2008, up 3.8%. (Multichannel News 3/16/09)
According to TNS Media Intelligence, five of the ten biggest ad categories increased
spending during January-September 2008 vs. the same period in 2007. (USA Today
12/15/08)
Financial services +0.8%
Local services, amusements +2.3%
Food, candy +6.0%
Restaurants +6.1%
Travel, tourism +1.9%
Financial services: According to TNS Media Intelligence, spending in the financial
services category rose 2.6 percent in the third quarter compared with the same period of
2007. (NYT 12/15/08)
Compiled 12/18/08
Updated 5/22/09
M.Appel