Sponsor (Apr-June 1964)

ADVERTISERS Advertising, research costs hurt Noxzema 63 net income A decrease in net income for Noxzema Co. in 1963 has been attributed to increased expenditures in advertising, along with research and new products, stockholders were told at the company's annual meeting. Sales of the Noxzema Chemical Co. rose five percent over 1962 to a record high of $28,518,574, but net income declined to $1,429,803 from $1,983,374 in 1962. "Management's planned policy for increased expenditures during 1963 was dedicated to sound constructive growth for the company, the benefits of which will be reflected in future sales and earnings," said Norbert A. Witt, president of the company. Advertising is becoming one of the largest individual costs of do • • ••••••••••• : "Here : comes the caravan". And to see—in "living color" — what that means for our advertisers, turn to page 37 of this issue of SPONSOR. WDSU-TV CHANNEL 6 • NBC NEW ORLEANS ing business, the annual report indicated. The periodic increases in advertising costs must be taken into account first, the report said. Noxzema must pay more for advertising every year to reach the same numbers of people. Perpetually higher costs prompt Noxzema constantly to look for ways to increase efficiency. During 1963 the company used new techniques and judgment founded on research to compensate for increased costs. The second and less obvious answer as to how much to spend for advertising must consider how individual products are budgeted, and what effect a product's budget may have on company growth and future earnings, the report noted. One answer is that individual product spending philosophy often relates to the life cycle of a product. Long-established products such as Noxzema Skin Cream, generally require lower advertising ratio to sales expenditures because of the consumer awareness and good will that have developed over the years. Experience with Skin Cream is nearly universal; yet the need to protect against competitive inroads and seek new users is always constant. A growing product, in a sense, can measure its own future. Noxzema Instant Shave is a prime example of a product trending upward, constantly alert to new marketing opportunities. In 1963 a test program was initiated in specific sales areas to evolve a marketing strategy for accelerated growth. Advertising has to overcome consumer lack of information and awareness of a new product, the company told stockholders. There is an "ignorance distance" which must be bridged between new product and consumer. The greater the distance, the larger the expenditure necessarj to close the gap of understanding. During the past year, as a means of making each television dollar work harder, Noxzema began usi split-minute commercials. This d vice combines two Noxzema bram with the same 60-second commei rial. While this practice has bee: the subject of some debate withi the tv industry, Noxzema feels th its split-minute commercials are e ecuted in good taste and combin the brands which could logically b associated with each other — policy which networks favor, the say. The effect of these split-mini utes is to permit broader exposur for each of the participating brand; than would be available if each wen to use full-minute commercials. The largest part of Noxzema ad vcrtising investments arc made ii, broadcast media. Consumer research has showi that metropolitan areas account fo a disproportionately high percentagi of total national volume. Invest ments in spot tv announcements ii large metropolitan markets will sup plement network efforts. A new advertising manager ii 1963, to assist the vice president was the first addition to a depart ment the company expects will grov to include people able to "super vise activities in research, medi; and other phases of advertising." Network tv programs the com' pany uses include Mr. Novae, Jail Pciar, Ben Casey, The Virginian Hootenany, Jimmy Dean. Spot tv i' also used, especially for Skin Lotior and Instant Shave. Agencies for Noxzema are Dan , cer-Fit7gerald-Sample and Sullivan Stauffer, Colwell & Bavles. Purex picks up ABC-TV Dinah Shore seven pack Purex. via Foote. Cone & Beld ing. made one of its big investment! for the upcoming season, signing foi seven hour-long ABC-TV special:with Dinah Shore. Four nighttime shows will star Miss Shore in a variety entertainment format: three daytime programs will see her hosting either dramatic or documentary specials of special interest to women, a proven plus format for Purex. Henry Jaffe will produce all seven shows. The specials will be co-sponsored by Seawanee Productions and Winchester Productions. 32 April 27, 1964 / SPONSOR