Clorox refreshes ad strategy with digital media shift, $50M budget increase

Dive Brief:

Clorox's digital media services will shift from WPP's AKQA to Omnicom's OMD after a recent review, according to a report in MediaPost. The move consolidates the brand's $500 million U.S. media account under OMD, which has been responsible for the brand's traditional media business since the agency was founded 18 years ago.
The shift comes after the brand has increased its digital marketing budget from 24% its marketing spend to 55% in 2019, in an effort to develop personal relationships with consumers through direct channels, per the MediaPost report.
Separately, Clorox's CEO and Chairman Benno Dorrer indicated during the company's quarterly earnings conference call last week that the brand will increase its ad spend by $50 million in the second half of 2020 in an effort to hold onto the increased trial of Clorox products it is seeing during the coronavirus health crisis.

Dive Insight:

Clorox reported a boost in sales during the coronavirus pandemic, with overall sales up 15% during its fiscal third quarter while sales for cleaning products like Clorox bleach and Pine-Sol jumped 32%, CNBC reported. Sales are expected to remain strong in the months ahead as consumers are likely to continue to be more focused on cleanliness even as shutdowns start to lift.

Prior to the health crisis, Clorox had put in place a marketing platform, IGNITE Strategies, aimed at building loyalty by increasing its personal customer relationships in the United States from 20 million to 100 million people over the next five years, Benno Dorrer, CEO and chairman of Clorox, explained in its earnings call last week.

To capitalize on the increased trial during the health crisis, the company plans to invest heavily in advertising, with a significant portion of its advertising budget going to consumer education to help people use its products to keep themselves safe, Dorrer said. The goal is to hold onto the increased trial the company is seeing for its cleaning products.

Dorrer said that brands "need to show up" during the crisis as this is a time when "people make up their minds as to whether they trust the brands or not."

"We will be very bullish with our advertising spend and not cut any single dollars," he said. "We're spending $50 million more in the back half, and I would expect us to continue to spend quite strongly in the next fiscal year as well.”

The consolidation in Clorox's media business under OMD suggests that digital could be at the core of this effort. The shift to digital has already been in evidence, with Clorox putting a bigger focus on leveraging data for personalization and ramping up its e-commerce business, per MediaPost.

OMD's pitch for the business focused on the agency's experience with the brand going back two decades as well as its talent, technology and operational solutions that can help move the brand, according to the MediaPost report, citing a statement from the agency's USA CEO John Osborn.