Dr Pepper Snapple Group Trims Marketing Budget

Soft Drinks Will See Bulk of $30 Million Cut

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Dr Pepper Snapple Group has plans to trim $30 million from its marketing budget this year.

The company confirmed that figure during an earnings call, noting that its marketing spend declined $7 million in the first quarter. According to Dr Pepper Snapple's annual report, it spent $486 on advertising and marketing in 2013, up $5 million from the year prior. The company spent $190 million on measured media last year, according to Kantar Media. That's down significantly from $216 million in 2010.

A spokesman said the cuts are focused on media and programs that support its carbonated soft drink portfolio, which includes Dr Pepper, 7Up, Canada Dry and A&W. He also said the company is shifting more money into cheaper digital buys. "We're enhancing marketing ROI analytics and capabilities to ensure our marketing investments are giving us maximum return and value," the spokesman said.

President-CEO Larry Young also highlighted marketing efficiency during a conference call with analysts. "Overall, our first quarter advertising generated almost two billion targeted impressions and through our continued focus on marketing return on investment, we grew GRP's by 30% in the quarter with media spend up only 10%," he said.

Dr Pepper Snapple works with agencies including Deutsch, McGarry Bowen, Initiative and Code and Theory.

Still, the decline in marketing spend comes as rivals Coca-Cola and PepsiCo continue to boost budgets. Coca-Cola, in fact, recently said it would increase media spending and brand-building initiatives by up to $1 billion by 2016.

Under the direction of Jim Trebilcok, exec VP-marketing, Dr Pepper Snapple Group had boosted its budget following a 2008 spinoff from Cadbury Schweppes. The company spokesman pointed out ad spending rose $100 million in the years following the spinoff.

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