Reality appears to have finally arrived at Procter and Gamble, the world's largest marketer, whose $10 billion annual ad budget has hurt the company's margins. P & G said it would lay off 1,600 staffers, including marketers, as part of a cost-cutting exercise.
More interestingly, CEO Robert McDonald finally seems to have woken up to the fact that he cannot keep increasing P and G's ad budget forever, regardless of what happens to its sales. He told Wall Street analysts that he would have to "moderate" his ad budget. This is coming from the man who increased P and G's ad spend by a staggering 24 percent over the two years ended October 2011, even though sales rose only 6 percent in the same period.
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