Online spending by consumer packaged goods advertisers continues to rise although the 2007 numbers won’t be anywhere near last year’s surprising 117 percent increase. The total online ad spend will reach $920 million on all forms of internet advertising by the end of 2007, up 33 percent over 2006, eMarketer estimates. While the shift took years as CPG advertisers stuck stubbornly to print and TV, eMarketer believes they will continue to direct more dollars online and could hit $1.8 billion by 2011 for a compound annual growth rate of 20.9 percent.
Then again, the CPG category defied forecasts in 2006, rising 117 percent to $700 million — much higher than eMarketer’s predicted $470 million.
Why the dramatic shift in the past couple of years? Part of the reluctance behind the hold back was due to uncertainty over how to translate marketing boxes of detergent and beauty products to the web from TV and Sunday newspaper inserts. But the continuing growth and sophistication of search advertising helped convince CPG marketers that they could use enhanced online tools to help make sales, not just burnish brand identity. Then there’s the growing popularity — at least for the advertisers — of product-based social networks.