The US CPG and Consumer Products Industry H2 2016 Update: Digital Ad Spending Forecast and Trends - eMarketer

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The US CPG and Consumer Products Industry H2 2016 Update: Digital Ad Spending Forecast and Trends

eMarketer Report

By: eMarketer

Published: December 21, 2016

Jump to: Executive Summary | Table of Contents | List of Charts

Executive Summary

US consumer packaged goods (CPG) and consumer products advertisers will spend $6.25 billion on digital advertising in 2016, a 23.3% gain from 2015 that will see this sector account for 8.7% of total US digital ad spending for the year.

  • Strategic decisions by brands to cut costs in other areas in order to free up cash for digital initiatives are boosting ad spend in the CPG sector. Procter & Gamble reported in an analyst call in August that it would increase ad spending “by mid-single digits” for the fiscal year starting July 1. Part of that additional spend would go to mobile-first initiatives.
  • In June, global snack food giant Mondelez announced that it would devote a larger part of its ad budget to Facebook as it experimented with Messenger bots to reach consumers one on one to boost ecommerce and to offer customer support.
  • Social media will continue to be a draw for CPG brands, especially as video becomes more deeply integrated into platforms and newer entries open up more advertising opportunities. For example, a May 2016 study by video-sharing platform Animoto of US marketers’ use of social video ads found that 70.8% planned to spend money to advertise or boost content on social platforms, particularly Facebook and YouTube. And although P&G announced in August that it would pull back on targeted advertising initiatives on Facebook, it remains committed to the platform, Marc Pritchard, the company’s chief marketing officer, told The Wall Street Journal.
  • Spending on digital video extends to other platforms, and spending in programmatic channels is also expected to rise as brands seek more premium content and control over how and when that content runs. Mondelez committed to working with the Fox TV network to create new ad formats, according to Ad Age. According to an unnamed Mondelez exec, the amount it plans to spend in Fox’s true[X] ad tech platform is five times the total amount it spends in digital on all Fox properties. The platform allows viewers to interact with an ad in exchange for fewer commercial interruptions.

"The digital ad spending predictions for the CPG and consumer products industry in this report are upward revisions from eMarketer’s March 2016 forecast. Previously, spending in this sector was projected to total $5.97 billion for 2016. Increases in spending on digital video and social media adverting, with a focus on mobile, are factors in the forecast update. Spending will continue to increase through 2020, when CPG and consumer products brands will spend $10.26 billion on digital advertising."

Table of Contents

5 charts are included in the full report:

CPG and Consumer Products Industry H2 2016: Digital Ad Spending Forecast and Trends

US CPG & Consumer Products Industry Digital Ad Spending, 2015-2020 (billions, % of total digital ad spending and % change)

Top 25 Advertisers, Ranked by US Total Media Ad Spending, Q2 2016 (millions)

US Digital Ad Spending Growth, by Industry, 2015-2020 (% change)

US Digital Ad Spending, by Industry, 2015-2020 (billions and CAGR)

US CPG & Consumer Products Industry Digital Ad Spending, by Format, 2016 (billions and % of total)