Consumer goods giant Procter & Gamble, the world’s biggest advertiser, saw its fourth quarter profits drop by 12 per cent to $2.19bn on a five per cent sales increase to $18.93bn, blaming the drop on a $1bn increase in marketing costs.
It’s also likely that a renascent Unilever under CEO Paul Polman and the ever-aggressive Reckitt Benckiser also played a
significant role in this, Unilever by increasing its own marketing spend and RB by making further inroads in its chosen area of household products.
In the period P&G spent heavily on new products Pampers Dry Max, Gillette’s Fusion ProGlide razor and Crest 3D toothpaste. It says organic sales increased by eight per cent, which is pretty respectable, but many analysts expected the company’s sales to break the $19bn barrier in the period.
P&G CEO Bob McDonald claimed the company’s performance was “ahead of expectations” but he will be only too aware that Polman’s Unilever (Polman is a former P&G executive) has stepped up a gear and that RB, which recently bought the SSL Durex business, is now a truly global player.