In the US consumer packaged goods, (CPGs are companies such a cereal companies, softdrink, toilet paper companies– anything used in high quantities at low prices) make up a large percentage of the overall spending in the economy and they make up a large portion of the total advertising spend as well. Despite this, however, they have been lagging way behind on digital ad spend. It seems that through 2015 and 2016, however, that may be changing.
According to a new report from eMarketer, in 2016 alone this sector should see growth of about 18.2% for digital ad spending. This is after a 21.3% growth rate through 2015. The continued above average growth rate is a clear indication that the industry has finally caught on to the fact that digital ads aren’t just to be used for virtual or easily shippable items. All CPGs can be marketed using digital advertising with great success.
Companies in this sector that are leading the charge for digital advertising include Procter & Gamble and L’Oreal. Both of these companies continue to invest heavily for their products to both be sold online, and simply marketed online so they will make more sales in traditional stores.
The fact that Procter & Gamble is quickly moving to digital marketing is very significant since they are the largest spender in overall advertising across media brands. If they continue to have confidence in digital ad spending, they will likely bring millions more to the market. To give you an idea of the size of P&G, their total traditional ad spend in 2015 was just under $2 Billion. This puts them ahead of other major companies like AT&T, Pfizer, Comcast and Berkshire Hathaway. Even more than General Motors, which spent about $1.4 Billion in traditional ads.
This is definitely good news for anyone working with digital advertising since over the next several years it is likely to bring in a lot more money to the market.
