Unit volume last quarter was down 3% globally on a 10% average price increase, but Schulten said U.S. volume was up on a 6% organic sales increase, with P&G gaining share both on a volume and dollar basis. Globally, P&G sales were hurt by continued slow growth in China as it recovers from a long COVID-19-related lockdown, but P&G returned to growth after declining last quarter.
‘Low-hanging fruit’
The strength of P&G’s U.S. performance comes despite price hikes and doubts from some investors about whether the company’s talk of media efficiency efforts, which historically dovetailed with slowing growth, might be a repeat story this time. Instead, in a conference call with investors, P&G executives pointed to the top- and bottom-line results showing that its strategies are working and vowed to expand them.
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Schulten said P&G remains committed to eliminating $400 million to $500 million annually in wasted or less efficient media costs. And Chairman-CEO Jon Moeller said the company would expand to more categories and countries its efforts to bring media planning and buying in house and expand reach by eliminating excess ad frequency. Those efforts have in many ways just grabbed “low-hanging fruit,” Moeller said.
“We have many categories where we are not at our target levels of reach, and that’s very high ROI activity,” Moeller said. “When we can reduce wasted frequency and reinvest that into expanded reach, very good things happen, as you’ve seen by the way not just this quarter but for the last four years. And there’s no reason to change that approach at this point in time.”
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Schulten said the ROI P&G is seeing on every dollar it spends by in-housing more media planning and buying “actually makes investment in media spending more attractive.”
That’s not to say all savings will always go into more media spending, as Moeller made the case for balanced top and bottom line growth. He pointed to presentations he makes in management meetings about the impossibility of meeting P&G’s growth goals by focusing strictly on the top line or strictly on the bottom line.
“I have a trite little saying we use on occasion,” Moeller said, putting it this way: “Top line with no bottom line, a waste of time. Bottom line with no top line just a matter of time.”
