Dial Fights Recession by Stepping Up Spending

For First Time in Years, Will Simultaneously Market Its Five Biggest Brands

By Published on .

BATAVIA, Ohio (AdAge.com) -- Dial CEO Brad Casper has picked a funny time to go on a spending spree: the deepest recession in a half century.

For the first time since he became CEO of the notoriously thrifty unit of Germany's Henkel four years ago, all five of Dial's largest brands will simultaneously have substantial consumer marketing campaigns this year -- including TV, print and digital -- led by Energy BBDO, Chicago.

$50 MILLION GAMBLE: Dial will spend more on Purex than it has in the past 20 years.
$50 MILLION GAMBLE: Dial will spend more on Purex than it has in the past 20 years.
The marketer of Dial soap, Renuzit air fresheners, Right Guard deodorant, Purex laundry detergent and Soft Scrub cleaning products, spent a not-so-whopping $20 million on measured media last year, according to TNS Media Intelligence.

But starting this month, Dial will put $50 million in marketing support behind Purex's new three-in-one laundry detergent, fabric softener and anti-static dryer sheets alone. That's more than the brand has gotten in the past two decades combined, though the number includes some trade and consumer promotion.

Dial's stepped-up spending comes as marketers of second- and third-tier brands, like many in its portfolio, face an unprecedented fight for survival as retailers cull weaker brands. One such brand, Arm & Hammer, marketed by Church & Dwight Co. (where Mr. Casper was last an executive), was removed from the liquid-detergent shelves in more than 80% of Walmart stores last month, according to people familiar with the matter, even after a major ramp-up in marketing last year.

Sticking around
However, Mr. Casper said his spending spree is not just an attempt to keep from being voted off the island, or, in a nod to Right Guard's appearance last month on "Celebrity Apprentice," getting fired. "I don't see an increase in advertising as a means to avoid obsolescence with retailers," he said. "You've got to have something to talk about."

That includes a Renuzit Crystal Elements launch that's helping the brand build sales and share in an air-freshener category relatively hard hit by recession, he said, and a Soft Scrub sponge infused with cleaner.

"It would be horrible if [the company's 2009 spending spurt] was a one-shot wonder," he said. He credits a commitment to stepped-up marketing with helping attract young marketers to Henkel and keep them there, reducing marketing-employee turnover from double digits four years ago to 3% now.

And Mr. Casper isn't buying that recession will hurt his chances. A lesson he learned from Procter & Gamble Co. Chairman-CEO A.G. Lafley when he worked under him in Japan in the 1990s, he said, was: "When you've got something consumers really love, don't let all the other economic or competitive factors get in the way."

Last fall, Mr. Casper feared the U.S. might face a decade-long slump much like Japan in the 1990s after real-estate and securities bubbles burst there. He no longer does. "The bubbles we're seeing popping in California, Florida or Arizona are still relatively modest compared to the bubbles bursting in Tokyo and Osaka," he said. "The American consumer is much more optimistic in general [and], despite unemployment, will lead us out of this recession."

Even so, he's been cautious. After one round of good scores from Nielsen's Bases product-concept testing service, he had the Purex three-in-one detergent tested again last year to "make sure it wasn't a one-time wobble." Then, after the market tanked in September, he decided to test it again with Bases in January, he said, "and we saw the same enthusiastic response from consumers."

Though priced twice as much per load as regular Purex detergent, the three-in-one product costs only half as much as washing clothes with a premium-price detergent, fabric softener and dryer sheet, Mr. Casper said.

Unitized-dose products such as tablets from P&G and Unilever or even a very similar three-in-one product from now-defunct Drypers Corp. never took hold in the U.S.

But Mr. Casper said he believes Dial has the right product quality, high-testing advertising and retailer support to make this launch work.

In this article:
Most Popular