Dr Pepper Snapple, bucking trend, ups advertising

By Paul Thomasch

NEW YORK (Reuters) - Dr Pepper Snapple Group Inc (DPS.N) is risking a different approach to the recession than other major advertisers: the soft drink maker is boosting its marketing budget, saying that's what worked best in the last big downturn.

Spending this year on everything from TV spots to print advertisements and more experimental Web campaigns will rise by up to 5 percent, the company's head of marketing, Jim Trebilcock, said in an interview. The company says its total marketing budget is about $300 million to $400 million.

The decision to spend more makes Dr Pepper Snapple an exception in a year when forecasters see overall U.S. advertising spending dropping by 8 to 10 percent, the steepest decline in more than two decades.

Company executives said they decided on the strategy after research firm Nielsen produced a study for them that detailed ad spending patterns during the early 1980s, the last prolonged advertising downturn.

"We wanted to find out what were the brands that were successful in '83 and '84, coming out of the recession?" said Trebilcock. "What did they do differently than others during the middle of the recession? Uniformly, the thing that came back is they didn't retrench. They reinvested."

The upshot is "dollars this year from a marketing standpoint are actually increasing," he said. "We believe that if we invest now, then when we come out of this thing in a year or two we'll be in a much stronger position."

This year, Dr Pepper Snapple will divide its creative advertising duties chiefly among three agencies. Interpublic Group's (IPG.N) Deutsch L.A. will handle Dr Pepper, Diet Dr Pepper and Snapple; WPP Group's (WPP.L) Y&R San Francisco is responsible for 7UP, Sunkist and A&W; and Laird & Partners will work on the Mott's brand.

As part of the marketing push, Dr Pepper Snapple is running new advertising for A&W, Canada Dry and Mott's -- brands that were long excluded from fresh ad campaigns.