December 2009: CPGs and Social Media

Consumer packaged goods (CPG) companies and social media are not an easy mix. CPGs have legacy marketing techniques that focus on reaching mass audiences, and the ways they measure marketing and sales success simply do not mesh with the types of measurements that social media can offer.

Trends in CPG online ad spending are helpful in understanding CPG social media spending. Although these companies are slowly increasing their online ad budgets, much of their attention remains focused on the mass audiences that TV, magazines and other media can deliver.

According to the IAB and PricewaterhouseCoopers, consumer packaged goods—a category that includes packaged goods, food products, household products and tobacco—made up 6%, or $702 million, of all online ad revenues in the first half of 2009. That was down from $754 million in the first six months of 2008.

In all of 2008, CPG companies spent $1.5 billion on online advertising, according to the IAB, or 6% of the $23.4 billion total. The IAB’s figures include a broad range of online ad types: display, search, video, contextual, classifieds, sponsorships and more.

The good news is that although CPG spending fell between the first half of 2008 and the first half of 2009, there is hope for a rebound in the second half of 2009. In prior years, CPG online ad spending increased by double digits, rising 31% in 2007 and 62% in 2008.

By looking at social media as a way to listen to consumers, respond to their needs and create ongoing dialogue—instead of as another way to advertise to them—CPG companies can reinvigorate their marketing and create new bonds with consumers.

Find out more about eMarketer’s digital marketing and the new report “CPGs and Social Media: Much More than Advertising

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