Kellogg Credits 17% Ad Spending Boost for Increased Earnings

By Thom Forbes , October 30, 2009, Ad Age

Kellogg Says Increased Ad Spend Leads To Crackling Sales

Kellogg, which boosted ad spending by 17% for its third quarter, is becoming a latter-day case history of the belief long promulgated by the American Association of Advertising Agencies that the best business decision a marketer can make in hard times is to advertise.

Kellogg’s sales of ready-to-eat cereal category were up 2% for the quarter, on top of the “stunning” gain of 7% a year ago, Emily Bryson York reports. CEO David MacKay says the company is focusing on its eight best-performing cereals, including the Kashi organic brand, which delivered double-digit growth in the quarter. So, too, did Special K and Rice Krispies. Overall, the top eight brands delivered 8% growth.

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“Our commitment to investing in advertising continues to be a key to our business model and to achieving our goals,” says CFO Chief John Bryant. “We see this as a great opportunity to increase our investment and build even stronger brands in the future.”

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