Johnson & Johnson reallocates budgeting in favor of online marketing

Instead of locking themselves in to expensive TV commitments, J&J appears to have decreased their TV and radio presence, and reallocated it to online advertising channels such as search and direct marketing.

According to a story in Adage, J&J’s 2006 global ad spend dropped 10 percent to $1.9 billion and its U.S. media spend decreased by over $250 million. Despite the cutbacks, sales rose by 6 percent to $53.2 billion - an indication, perhaps, that the money was diverted to channels that TNS Media Intelligence, who reported the findings, don’t cover such as social networking, paid search ads and viral advertising.

J&J spends around 60 percent of their marketing budget on TV, yet for two years running it has foregone the upfront marketplace.

Other moves towards digital include a 31 percent increase in direct-mail and email programs, a consumer site, Babycenter.com, and the online marketing of a promotional feature film, Innerstate.

"Johnson & Johnson has been one of the phenomenal companies at marketing R&D, and getting people to try new things, and go beyond the comfort zone of 30-second TV spots," said Rex Briggs, CEO of the consulting firm Marketing Evolution (via Adage.com). "And that is translating into [budget] shifts. To me, it seems like a model for best practice."

Tags: internet marketing, Johnson & Johnson, marketing budgets, online budgets, television, TNS Media Intelligence