Procter & Gamble Co. pulled back substantially on ad spending as a share of sales last quarter amid rising commodity inflation and supply-chain constraints, but the company said its spending remains well ahead of pre-pandemic levels and in line with historical norms.
Overall, ad spending cutbacks don’t look to be hurting much. P&G had organic sales growth of 7%, 5% without adjustments for currency, acquisitions or divestitures, to $19.5 billion. And the company said its market share grew by 0.5 percentage points across its full global business in the quarter.
The company reported overhead and marketing “efficiencies” in the quarter of 2% of sales, or $390 million, of which marketing was likely the largest part. In prior years, P&G has spent such savings by putting the dollars into marketing. But, as with the prior quarter, that wasn’t the case in the just-ended fiscal fourth quarter.
The pullback comes despite P&G now recouping most of its commodity-fueled cost increases through price hikes. The company reported close to $900 million in cost inflation, offset by around $760 million in price hikes last quarter, with more across-the-board price hikes to come this quarter.