Marketer Commentary From Nestle, Unilever, Mondelez, Colgate, Kimberly-Clark and Clorox
At another investor conference this week, Barclays hosted many of the world’s largest packaged goods companies. Many of those companies’ executives made comments about advertising and marketing that were incremental to previously conveyed sentiments or otherwise stood out as important considerations about how those companies are thinking about related activities. I summarize them here.
Nestlé’s CFO François-Xavier Roger:
“We will continue to increase our marketing investment further than the second half of this year. We expect to go back to where we were a few years back, which means that we will need to ramp up even further the investments in 2024 as well.”
“We should not look only at A&P on its own…we look at A&P and trade spend when I'm talking of performance for its spend, which is everything that goes to the consumer, excluding rebate on discount that go to retailer…the total consideration for A&P and trade spend is close to 30 billion Swiss Francs. So it's a huge amount…last year, we did increase that amount in absolute value. We decreased marketing, but we refocused a little bit more on trade spend at the time when we did an exceptionally high level of pricing…we thought it was very important to make our products more affordable and more accessible. And as a consequence, we focused more on trade spend than on the marketing…We will increase our trade spend for the full year 2023.”
(Note that per the company’s recent disclosures, Nestle’s advertising and promotion expense was approximately 6 billion CHF last year)
Unilever’s CFO Graeme Pitkethly
“A large portion of those businesses (Unilever acquired) is D2C, it's direct-to-consumer and it's lower funnel marketing. That is an area where you can get a really, really clear sense of the performance of your marketing investment because you're measuring direct conversion across the sale with your consumer. But there is also quite a high proportion of our pro forma marketing. That is an area where you can get a really, really clear sense of the performance of your marketing investment because you're measuring direct conversion across the sale with your consumer. What we're doing is the typical things that we do. Are you seeing the reach and frequency that you were looking for with your communication? Is your communication good enough? Are you testing the quality of that communication before you go on air? And in particular, it has been a much more multiyear theme for us and myself in particular, are we making sure that the investment goes into media so that we're making good assets but spending more money showing those assets to import consumers through the right communication channels as opposed to jumping off to make another piece of communication too quickly.”
Mondelez’ CFO Luca Zaramella:
“We can push a little bit harder on advertising investments. And so we want to support our brands. We are not going to invest [crazy volume] in promotions. We prefer investing in advertising.”
Colgate-Palmolive’s CEO Noel Wallace:
“We'll continue to invest in building brand health and market shares and executing our pricing strategies and volume for the balance of the year. So advertising will be up on both the dollar and a percent to sales basis.”
“Funding…advertising continues to accelerate the top line growth of the company. We're very pleased with the execution of our advertising and more importantly, the capabilities that we're building in that space.”
“We're now in 63 markets with programmatic media, which allows us to be much more targeted and efficient in how we buy our media and ultimately, the more we do in programmatic, the more we can sell some of the learnings of that benefit around the world.”
Kimberly-Clark’s CEO Michael Hsu:
“We have some pockets where we need to see improved execution, both on maybe innovation and the advertising and the commercial programming.”
Clorox’s CEO Linda Rendle:
“What we aim to do is have a personalized relationship with consumers, and that in aggregate is what we use to decide the vehicles that we have. And that tends to be digital. And it tends to be across the entire path to purchase from a consumer perspective, when they're deciding, when they're in store or online…more than two-thirds of our spend today is in digital.”
“We had a goal…to get to 100 million consumers in the U.S. and therefore use that digital marketing to personalize content to them; and that has led to significant improvements in ROI. In fiscal year '23, we had our strongest marketing ROI that we've had.”
“Some brands respond much more to retailer media, for example. Other brands like Hidden Valley, giving them recipe content is highly effective. So we really do tailor and allow the general managers to make decisions based on what's best and what's the best returns they can get on their brand and with their set of consumers.”