CPGs Choose Brand Sites Over Ads

NEW YORK Consumer packaged-goods companies are upping their Internet initiatives, according to a new research report, with particular focus on brand Web destinations.

EMarketer, a New York research firm, said it expects packaged-goods firms to spend $470 million online in 2006, a 17 percent increase from 2005 and 42 percent ahead of 2004. At that level, CPG net ad spending would represent just 3 percent of total online expenditures this year versus nearly a quarter of offline, according to eMarketer.

The researcher, however, sees bigger opportunities for CPG makers in relationship marketing than Web media buys, particularly brand Web sites like Kimberly-Clark’s Huggies Baby Network and Procter & Gamble’s Tide Fabric Care Network.

“They’re putting a lot of their money into the back-end stuff, especially building sites,” said Lisa Phillips, an eMarketer analyst.

She said more CPG companies are likely to make additional use of tactics like e-mail, online coupons, sweepstakes and branded entertainment, often in the hopes of obtaining consumer data. Web media expenditures, however, will continue to lag behind big-spending categories like autos.

“There’s a whole different cycle to buying cars than shampoo,” Phillips said.