CPGs like Coca-Cola, P&G, and Clorox break down their marketing investments as consumers reckon with price hikes (2024)

"I would characterize our current media spending and support spending for our brands as sufficient," said P&G CFO Andre Schulten during the company's recent earnings call. "We view the current business as fully funded, sufficiently funded in order to continue growing our brands, their top-of-mind awareness, and their equity."

Both Clorox CEO Linda Rendle and Coca-Cola CFO John Murphy also said on their respective companies' recent earnings calls that each of their companies have apportioned the right amount of spend to marketing, though both said that will change if necessary.

If consumers stop buying Clorox products as prices go up, or if Clorox's competitors don't also increase their prices, then the company will look to invest more in marketing.

"We are ready with backup plans that we can activate very, very quickly," Rendle said.

Coca-Cola's Murphy also emphasized that it will be "agile" in managing its marketing investments, "depending on the circ*mstances."

Major CPGs spent hundreds of millions, and at times billions, on ads in 2022. Clorox spent $280 million, Coca-Cola spent $646 million, and Unilever spent $746 million according to data from Vivvix, an ad intel platform owned by Kantar, and social data from Pathmatics. P&G spent $7.9 billion in 2022, compared to $8.2 billion in 2021 and $7.3 billion in 2020 according to the company's annual report.

Clorox, Coca-Cola, and Unilever didn't respond to a request for comment.

Over the past fiscal year, CPGs have also stressed the importance of product improvements and marketing to keep customers from fleeing as prices have gone up. This has worked for companies like P&G, which has kept cheaper private label products from poaching its customers. "There hasn't been a significant shift in consumer behavior in terms of trade down," Schulten said, referring to consumers trading down to cheaper products. "The way that our pricing was executed with great support in innovation and great support in marketing spend has helped."

CPGs have really focused their marketing strategies around making sure their dollars are stretching as far as possible. Schulten noted how P&G's baby care line had increased reach and awareness, while decreasing media spend 15%; and P&G's fabric care team brought media planning and buying in-house, developed its own algorithms for TV buying, and saved $65 million in a year.

At the same time, CPGs are cognizant of where marketing dollars won't make an impact. When an analyst asked Clorox's Rendle on the lack of trade promotions — ads that are bought to promote products within retail stores —she said: "We want to use promotion very strategically in times of the year where we can ensure that consumers like back-to-school, for example, or cold and flu, where we know people are looking for our products, and we can introduce them to innovation or remind them to buy."

However some CPGs, like Unilever, plan to make aggressive marketing investments this year. Branding and marketing will be one of the company's biggest expenditures across its different business units this year, said CEO Alan Jope during the company's recent earnings call. But Unilever is justifying these investments because these business units have made themselves more efficient by cutting under-performing brands and other expenses. "They have all built plans that involve aggressive savings, continued pricing and therefore, the ability to step up their [brand and marketing] investment," Jope said.