CPG, Beauty Marketers Slashed Spending 14% in Fourth Quarter

http://adage.com/article?article_id=135532 The fourth-quarter cuts helped pull spending down 10% for the full year for the 10 U.S.-based companies covered by analyst Andrew Sawyer, including Procter & Gamble Co., Kimberly-Clark Corp., Colgate-Palmolive Co., Clorox Co., Estee Lauder, Avon Products, Church & Dwight Co., Chattem, Energizer Holdings and Alberto-Culver Co.

Of that group, only Colgate, one of the smaller spenders, increased measured media spending in the fourth quarter, according to data from TNS Media Intelligence reported by Goldman. Colgate, along with two of the other smaller spenders of the group -- Chattem and Church & Dwight -– were the only ones to hike spending for the full year.

If that money was shifting to trade promotion, that wasn't showing up in display and feature data from Nielsen Co., also tracked by Goldman. The Nielsen data showed trade support by the companies flat in the fourth quarter after a 5% year-over-year decline in the third quarter. Trade-promotion activity, however, appears to have increased sharply early this year, according to recent Information Resources Inc. promotion data reported by Deutsche Bank.

Research presented by University of North Carolina marketing professor Jan-Benedict E.M. Steenkamp on a Sanford C. Bernstein conference call on Wednesday shows companies that didn't tie their ad spending to business cycles showed annual stock price growth 1.3 percentage points higher than those that did between 1986 and 2006.