P&G and Coca-Cola Keep spending up despite recession

The clear way to go as all academic research available shows that big brands should continue to spend and innovate to win consumer confidence specifically in down times.

Below an article sourced from WARC that provides some empirical evidence of this.

VALENCIA: Procter & Gamble, the consumer goods company, and Coca-Cola, the soft drinks giant, will continue to spend on advertising in the downturn, but both firms are also placing a greater emphasis on innovation and efficiency.

Bernhard Glock, P&G's vice president of global media and communications, argued the world's biggest advertiser is "committed to continue spending behind its branding efforts."

Among other initiatives, it will also aim to double its outlay on innovative and sustainable products to $50 billion (€39bn; £35bn) by 2012 according to Glock, who was speaking at the Festival of Media in Valencia.

He added that in the current, rapidly-changing environment, advertisers and agencies must adapt, and also seek to drive the overall transformation rather than "be changed" by external events.

P&G wants to work "hand-in-hand with our agencies," combining increased collaboration with a greater simplicity in decision-making in order to "develop and free up capacity for innovation."

Maarten L. Albarda, Coca-Cola's director of media and communication innovation, said the Atlanta-based beverage-maker was similarly attempting to "nurture" and "protect" its marketing budget, but would also be "keeping investments relatively flat."

As such, he argued that agencies should not to "look at budgets to determine position or relative strength," and also be honest enough to admit when they "can't handle something."

Coca-Cola's marketing strategy for the recession revolves around "connection planning," which Albarda defined as a "360 degree" approach that is "consumer-centric," "media neutral" and "goes across all touchpoints.”

Babs Rangaiah, director of global communications planning at Unilever, also said at the event that the Anglo-Dutch food-to-homecare company was "scanning the globe for ideas and content."

In this vein, she argued that the modern agency – "Agency 2.0" – needs to bring "everything together in the way it comes to the clients with the solutions."

Data sourced from AdAge/Rightbrainleftbrainblog; additional content by WARC staff, 23 April 2009

Comments

[adithya sundar]

i think both brands are performing similar strategies i.e in terms of marketing and promotion and thus differentiation is very low. a different type of positioning like building any one of them to be a aspirational one and make customers associate themselves with the brand thus creating inertia rather than only loyalty on the part of the customers would make the brand more stronger financially and emotionally.

[Laila]

i hate coca-cola and pep

[88 India]

Pepsi still rocks in india and during cricket season both coke and pepsi try to out run each other in advertising......an interesting fact pepsi still performs well than coke in India,