Boosting TV Ads Hiked Cereal Sales, But Digital ROI Even Higher

By Emily Bryson York , Published: February 17, 2009 Advertising Age

BOCA RATON, Fla. (AdAge.com) -- General Mills, one of the package-food industry's top performers, laid out a number of recent marketing successes at the Consumer Analysts Group of New York conference this morning, and offered a preview of the rest of its fiscal year.

The company has staunchly supported consumer-marketing spending increases -- 19% in the first half of fiscal 2009, which began in June -- while competitors, including Kellogg and Kraft, have begun to scale back on the heady marketing outlays of 2008, instead preaching bundling and greater return on investment. General Mills estimates that its consumer-marketing spending will be up by "double digits" for the full fiscal year.

CEO Ken Powell has repeatedly said that it's particularly important to support well-known brands during the current economy.

Online growth
But while the bulk of the company's spend remains on TV, Mr. Friendly said in a conference with reporters that it has begun to see significantly higher return on digital investment. General Mills has been diverting funds online, driving traffic to recipe sites such as BettyCrocker.com. The company's cooking sites had about 8 million visitors last month. General Mills also recently launched a free Betty Crocker iPhone application, which offers meal suggestions based on what's in a consumer's pantry.

"We are seeing very high returns from digital than broadcast," Mr. Friendly said, declining to give the percentage of spending that's moved online. "It's not that our TV ads don't work, but when you're watching TV you're doing it for a different reason. When you go to a website you have a very specific purpose."

"We're meeting here in Florida at a time of great economic uncertainty around the world," Mr. Powell said. "General Mills has weathered the storm due in large part to the strength of our product categories and the strength of our brands." He underscored that the company has a number of well-known 50-year-old brands, such as Cheerios and Pillsbury, as well as 30-year-old brands such as Yoplait and Nature Valley, that consumers trust.