Ad Spending Trends in the CPG Sector
The continuing evolution and convergence of TV and video and a growing proliferation of ad units and platforms mean that brands and agencies today face a greater array of advertising choices than ever before. But how are the myriad options impacting specific industries like Consumer Packaged Goods, and what are the dominant spending trends of 2017 in this important category? We dive into eMarketer’s research to find some answers. Here are three key trends:
TV is still king for CPG advertisers
eMarketer reports that CPG brands spent more than $12 billion on traditional TV ads in 2016. This was compared to just over $6 billion spent on digital ads during the same period. TV continues to be a reliable and appealing channel for CPG marketers who are looking for broad reach and opportunities to boost brand awareness.
Digital spending is on the rise
Digital ad spending by CPG advertisers will grow by more than 17% in 2017 to more than $7 billion. The increase in digital is driven by growing category investments in search, video and mobile. Video is a natural evolution for CPG marketers who are familiar with TV campaigns and have long had success in using sight, sound and motion to connect with consumers. Meanwhile, youth-focused CPG products like beverages and snack foods are turning to mobile, where younger consumers congregate on platforms like Instagram and Snapchat.
CPG brands want more accountability from digital
The growth of digital ad spending is tempered by a more cautious attitude toward major investment in digital formats. Procter & Gamble’s Chief Brand Officer Marc Pritchard led the charge this year in calling for greater accountability and measurement standards in digital. While there are signs that the digital advertising ecosystem is responding to these demands, in the short term the concerns may slow investment.
CPG brands continue to be big spenders in advertising, thanks to their sustained focus on TV and an increasing investment in digital. But it’s not just their spending that’s having a big impact. Thanks to the urging of leading executives, like Pritchard and others, CPG is helping to push the ad industry toward greater accountability and an accepted standard of measurement across all screens and devices.
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