Will P&G cancel its 2nd quarter options?

With the end of its fiscal year approaching, Procter & Gamble this week must decide whether it will exercise the majority of its cancellation options in the second quarter scatter market–as it has done in the pastor stick by its upfront commitments.
The question of whether P&G will go with the hand it dealt the Big Three networks during the upfront– or fold–has already forced other packaged goods companies and P&G agencies to reshuffle their cards.
“If they’re going to cancel in the second quarter, you can bet we’ll use it in our favor,” said one national TV buyer for a prime P&G competitor.
Fueling the belief that the Cincinnati-based giant may be ready to cancel second quarter inventory is that it requested– and was granted, of course–a 30-day extension for cancellation options in the second quarter. The traditional deadline for the second quarter is Jan. 1. P&G’s deadline was Feb. 1.
Last year P&G canceled between $12 and $15 million in second quarter ad spending. The money, said some P&G observers, went to the bottom line to present a rosier picture to shareholders. P&G’s fiscal year ends June 30.
One top executive at a P&G agency said the company has been known to delay media spending, product launches and promotions until its fiscal first quarter begins.
This executive said P&G has already started planning to shift ad spending for select brands from the calendar second quarter to the third.
“Sometimes it’s only a difference of two to three weeks,” the exec said. “But if they have a brand with a TV schedule that runs from January to June, they will put that brand on a hiatus of sorts.”
Copyright Adweek L.P. (1993)