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US consumer packaged goods (CPG) and consumer products advertisers will spend $5.97 billion on digital advertising in 2016, an 18.2% gain from 2015 that will see this sector account for 8.7% of total US digital ad spending for the year, as explored in a new eMarketer report, “The US CPG and Consumer Products Industry 2016: Digital Ad Spending Forecast and Trends.”
Despite being one of the largest spenders on advertising overall in the US, this sector lags behind several other industries in terms of digital ad spending—its nearly $6 billion in digital ad spending will represent just 8.7% of total digital ad spending by US industries this year, eMarketer expects. But its biggest advertisers, such as Procter & Gamble and L’Oréal, will continue to allocate larger portions of their budgets to digital.
What were considered trends in 2015—mobile, digital video, programmatic—are now full-on focuses of advertising efforts in 2016. In the case of mobile and digital video advertising, brands are catching up with consumers’ habits. In the case of programmatic, they are taking advantage of piles of proprietary and third-party data to better target consumers, especially via mobile and digital video.
Among the 10 US industries measured by eMarketer, CPG and consumer products is projected to have one of the highest compound annual growth rates (CAGR) for ad spending between 2015 and 2020: 13.5%. Only automotive and entertainment will grow at a faster pace during that period.
Nearly all the industries measured by eMarketer are forecast to continue to grow digital ad spending at a good clip through 2020. On average, spending will drop into the single digits by 2020, after years of growing at a double-digit pace. CPG and consumer products manufacturers, however, will see above average growth in spending every year of eMarketer’s forecast period.
CPG and consumer products manufacturers are among the biggest spenders in advertising overall, and continue to spend across all media. Data from Kantar Media revealed that CPG behemoth Procter & Gamble was the largest buyer of advertising across media (excluding digital) in the US in 2015, spending nearly $2 billion. Beauty brand L’Oréal ranked seventh in overall ad spend in 2015, with $1.22 billion invested in traditional media advertising.
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