The ongoing refrain at Heinz is that it has been increasing its ad budget. But measured spending figures don't bear that out. Taylor Nelson Sofres' CMR shows $89 million in measured media for Heinz last year, a figure disputed by the company's recently departed media director, who pegged the figure closer to $61 million. Even by the standards of the more generous estimate, that's a rock-bottom advertising-to-sales ratio for a $9.43 billion company. Factoring out Heinz's enormous business in food service, a barely advertised sector, the company's ad-to-sales ratio still scrapes the bottom of the pickle barrel.
The company claims most of its marketing muscle goes toward less measurable efforts such as public relations and packaging, and, from the looks of it, products such as its green EZ Squirt kids' ketchup earned more visibility through editorial coverage on shows like "Entertainment Tonight" rather than paid media time. "I see more articles about ad innovation at Heinz than I see actual ads," said Prudential Securities analyst John McMillin. But after a while, media outlets lose interest, and without a sustained paid advertising program, the brand message disappears.
That's not to say Heinz advertising isn't good-a lot of it, in fact, is great. The company's campaign for John West salmon walked away with the Grand Prix at this year's International Advertising Festival at Cannes, and the aforementioned ketchup campaign has been highly decorated at award festivals. But the ads seem to get more exposure on award reels than on TV-hardly the growth path for venerable brands like Star-Kist, 9-Lives and Ore-Ida. Sorry, Charlie.