Church & Dwight Hikes Digital Despite CEO's Doubts

'Nobody Quite Knows What the Heck a Hit Does for You,' Says Craigie

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A growing wave of marketers have been touting how much they spend on digital advertising, and Church & Dwight Co. is no exception: at an analyst conference today, the company reported that digital composes 20% of its media budget.

But Chairman-CEO Jim Craigie, long the packaged-goods industry's maverick, couldn't quite stick to the usual industry script for his digital tout.

"I can't believe companies … talking about getting more efficient marketing [from budget reallocation], which is a buzzword for we're cutting our marketing spending and putting it in digital," Mr. Craigie said.

"I like digital," he said at the Consumer Analysts Group of New York meeting in Boca Raton, Fla. "But it's still very unproven what you get in bang for the buck in the digital category."

"I hear companies talking about 34% of their spending in digital and now we can cut back as we're getting so many hits," he said. "Well, nobody quite knows what the heck a hit does for you on the internet today, whereas you've got some very proven vehicles in print and TV."

The statements came just after Church & Dwight Chief Operating Officer Matt Farrell had pointed out Trojan has gotten more than 4 million hits this month for a "50 Shades of Grey" parody video, an edited version of which drew laughs from the crowd of investors and analysts. The video is also running in cinemas.

Overall, Church & Dwight has been spending 12% to 13% of sales on advertising and plans to continue doing so, Mr. Craigie said. He also noted that Church & Dwight has outperformed both the packaged-goods industry and the Standard & Poors 500 significantly in total shareholder return both in the past year and over three-, five- and 10-year periods.

Colgate-Palmolive Co., which has been another of the industry's stronger performers in recent years, also is hiking digital spending, said Chairman-CEO Ian Cook in his CAGNY presentation, but to only 13% of global advertising spending last year, lower than many peers have reported. He said the company expects its digital share to rise to the 20% to 25% range from 2015 to 2017.

But his biggest marketing-mix shoutout was for trade promotion, once the industry's black sheep because of its high cost and reported negative impact on consumer price sensitivity.

"The old adage that trade spending is bad is no longer true in this day and age," Mr. Cook said, thanks to improved analytics that allow more targeted and effective spending.

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