PepsiCo reported that although its first-quarter earnings on
Thursday showed a 5% drop in profits from a year ago, its marketing and ad
spending were up, according to an article in Ad Age.
Global marketing and ad expenses rose 11% in the first
quarter compared to same period a year ago, while many other multinational
companies have closely monitored their ad spending, the report said. PepsiCo, however, has invested
heavily into core brands including Pepsi, Gatorade, Lay's and Quaker, promising
to spend an additional $500-$600 million globally on the core brands, according to the article.
On the conference call with analysts, CFO Hugh Johnston said
that advertising and marketing expenses will make up at least 5.7% of sales to
match the 2012 investment, the report said.
PepsiCo also said that it is investing in innovation, research
and development, the article stated.
"With the productivity we're unlocking, we're able to
invest in growth drivers like advertising and new product launches and to
simultaneously drive margin improvement," PepsiCo chairman and CEO Indra
Nooyi said on the conference call, in the article.
PepsiCo's net income slipped 5% to $1.08 billion, while its revenue
was up 1% to $12.6 billion, the story said. The company said that earnings per share in 2013
will rise 7%, according to the report.
