Will P&G Cancel Its 2nd Quarter Options?: Last Year the Marketer Opted Out of $12-15 Million in 2nd Quarter Ads

NEW YORK – 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 past – or 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 competitior.
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)