- Clorox increased spending on advertising by 30% to $179 million in the September quarter from a year earlier amid rising demand for cleaning supplies during the pandemic, according to a CNBC report. Linda Rendle, who started as CEO of the consumer packaged goods (CPG) company in September, plans to also increase spending on advertising in Q4, she said in an interview with CNBC for the article.
- The company's increased advertising spending followed a 14% spend gain in the March quarter and 28% in the June quarter. Clorox estimated that advertising and sales promotion will be 11% of sales this year, CNBC reported.
- "We want to take an opportunity to play offense... We're going to continue to increase that investment through the remainder of the year because we want to serve more people around the world and we have a unique opportunity to do that as people's behaviors are changing," Rendle said.
Clorox's ongoing bet on advertising comes as it had its best quarter in more than two decades in terms of revenue, which was up 27% year-over-year for a total of $1.92 billion, per CNBC. With strong demand for cleaning supplies in general during the pandemic, this has led to empty store shelves at times. In response, the company may be leaning on advertising to help it dissuade consumers from switching brands, which has become much more common this year.
Thirty-six percent of consumers have tried a new brand while 25% tried a private-label product during the pandemic, consulting firm McKinsey found. With 73% of consumers planning to include those new brands into their routines, CPG companies like Clorox face challenges in converting consumers who are less likely to come back.
Clorox's plans to increase its media spending are in line with its previously announced plan to increase ad spending in second half of the year by $50 million in the U.S. The CPG company also moved its media buying from WPP's AKQA to Omnicom's OMD to consolidate its $500 million U.S. media account. Clorox increased its digital budget from 24% of its total marketing spend to 55% last year to bolster personalized relationships with consumers through direct channels.
Clorox is among the CPG companies that are investing more in marketing services amid the pandemic disruptions. Unilever's management last month said the company plans to spend more to improve its digital marketing efforts, continuing a longer-term plan to reach consumers whose media consumption habits have shifted to online channels. The marketer of Dove soap and Lipton tea will spend more on traditional media, but it also seeks to invest in more "manpower-intensive" digital marketing.