Branding-Focused Ads Remain No. 1 for US CPG Industry

The US consumer packaged goods (CPG) and consumer products industry’s advertising spending on digital media will hit $4.20 billion in 2014 and steadily increase to $7.04 billion by 2018, according to a new eMarketer report, “The US CPG and Consumer Products Industry 2014: Digital Ad Spending Forecast and Trends,” part of our new report series, “2014 Digital Ad Spending Benchmarks by Industry.”

The CPG and consumer products industry remains focused on branding. Because CPG brands traditionally rely on retailers to do much of the actual selling of products, direct response is not as crucial to marketing efforts as in other verticals.

For 2014, eMarketer estimates US digital ad spending on branding will make up 65% of total budgets vs. 35% for direct response.

The breakdown has shifted even more in branding’s favor since 2013, when it was responsible for 63.0% of digital ad investments, vs. 37.0% for direct response.

Branding efforts will remain important. In a February 2014 study conducted by Duke University’s Fuqua School of Business, brand building was among the categories for which CPG CMOs in the US said they expected to increase their marketing budgets—up 8.2% in the next 12 months. Digital marketing was set to increase 12.9%, according to the survey.

Mobile is another area where brands are upping ad spending as they follow consumers who are spending increasing amounts of time on their smartphones. CPG’s share of spending on mobile is on the low end—just 7.9% of total mobile spending—compared with other industries such as retail, financial services and automotive. But within the category itself, spending on mobile will account for 33.5% of all digital advertising for 2014, eMarketer forecasts. New types of targeting, including geofencing, mobile couponing, video and in-game mobile apps, are channels within mobile that brands are spending more time, money and effort on.

Courtesy of eMarketer