P&G Boosts Ad Spending as It Innovates

Procter and Gamble, marketer of such famous brands as Crest, Tide, Olay, and Scope, is bulldozing its way through economic doldrums by increasing its worldwide advertising spending to a record $9.3 billion this fiscal year.

To put that into perspective, the annual GDP of the Bahamas is just shy of $9 billion. In other words, P and G spends more on advertising its cosmetics and household products than the entire value of goods and services produced in the Bahamas in a year.

P and G's CEO, Bob McDonald, tells Ad Age: "Consumers are continuing to buy our products, particularly when we have innovation in market, and we have a very strong innovation program right now."

The company web site highlights some product introductions from the past year, most of which are extensions rather than "new to the world" products. One way P and G fosters innovation is through separate spaces where teams can gather and work away from the mainstream. In addition, it operates a portal where it invites inventors to submit new product ideas for consideration in a partnership approach to innovation.

P and G's CEO also observes that, despite the difficult economic climate, “We’ve not seen dramatic changes in consumer behavior over the last few months that’d be markedly different from what we’ve seen before.” Essentially, he's saying that the company has been tracking long-term consumer behavior and hasn't seen major deviations that are unfamiliar or unable to be addressed via marketing.