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Spending Increases – But Only In Some Sectors

By admin | June 30, 2010

Ad spending is expected to increase in 2010, as the economy recovers and companies attempt to lure consumers away from the bargain brands they’ve grown accustomed to during the recession.

Advertising for household products has already increased 15% in January and 11% in February. Advertising overall is expected to get a significant hike, with major consumer product makers saying they expect to spend an average of 9.7% on annual sales this year, up from 8.6% last year.

The major focus now is on new innovations. During a recession, consumers simply stop buying certain products that are considered luxuries only to be bought with “extra” income. They are less likely to make a major purchase like a car or a new appliance for the house, for example.

When it comes to necessities like household goods and food, however, consumers simply start buying cheaper brands. Companies are hoping that by showcasing new technology like more absorbent diapers, they can convince consumers to forget the cheaper brands and go back to more expensive ones.

P&G (Procter & Gamble) plans to introduce 30% more innovations in products this year, correlating with its 6.3% increase in ad spending. Colgate and Kimberly-Clark also plan to spend more on ads, many of which will showcase new innovations for their products.

Peter Koeppel is president of Koeppel Direct, a leading infomercial and (DRTV) direct response media buying firm.

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