3 major food brands turn to digital in cost cutting drive

25/02/2014

A number of FMCG giants including Kraft, Kellogg and Mondelez International are cutting operational costs amid weak consumer spending- putting new investments in digital instead, according to a new report.

The report, from Advertising Age, cites executives from these firms as saying some of those savings will be put toward marketing and advertising.

Kellogg's Project K, for example, is designed to find annual savings of $475 million, some of which will be used to develop a "masterbrand" marketing push, according to the AdAge report.

The potential for savings by shifting to digital advertising makes it an appealing choice, executives say.

As companies put more money into marketing, they are increasingly looking to digital as a way to spread their message more efficiently.

Speaking the Ad Age, Kraft CEO Tony Vernon said the company's digital marketing group "generated about $80 million of savings in 2013, because they were able to achieve the same, if not more, quality impressions at a lower cost."

Mondelez, which sells brands like Oreo and Trident, pledged to pour more than half of its North American media budget into digital by 2016, the report said.

Read the Ad Age report here

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