Online Ads Drive CPG Sales

Discussion
Aug 19, 2009
George Anderson

By
George Anderson

New
research from comScore and dunnhumbyUSA has found that advertising online
will drive sales of consumer packaged
goods (CPGs) at or above the levels usually associated with television
commercials.

Over
a 12-week period, sales of CPGs advertised online grew at retail by nine
percent. This compares to the eight percent lift that Information Resources,
Inc. (IRI) reported in its How Advertising Works research report.
The number of campaigns run that showed a significant lift were higher
online (80 percent) than on television (36 percent), according to
figures from the two studies.

Gian
Fulgoni, executive chairman of comScore, said in a press release, “These
early results confirm the ability of online advertising to successfully
build retail sales of CPG brands on par with the impact of television advertising.
It is likely that the more precise targeting ability of the Internet –
especially in terms of accurately reaching the desired demographic segment
— is a key reason for its effectiveness. That is meaningful in and of
itself, but when you take into account the fact that online advertising
is generally less costly than television, these results take on even greater
significance.”

“While
there is no doubt that advertising can increase sales, measuring that effect
is very hard to do. comScore and dunnhumbyUSA’s robust methodology has
without question achieved that goal and puts online display in the select
club of media that can generate measurable sales in the short-term and
build brands in the long term,” said Hernan Lopez, COO, Fox International
Channels and dot.Fox Networks.

Bill
Pearce, senior vice president and chief marketing officer at Del Monte
Foods, said, “The study results represent very encouraging news for CPG
marketers online and offline because the data confirms the ability of online
marketing to drive results offline at the shelf level.”

Discussion
Questions: What do you see as the implications of the comScore and dunnhumbyUSA
research? Will we see marketers moving significant ad dollars away from
television to online?

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9 Comments on "Online Ads Drive CPG Sales"


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Marc Gordon
Guest
Marc Gordon
11 years 8 months ago

Television and the internet are equally important as both are great sources of mindless drivel that can keep people occupied for hours. So it’s important that advertisers be aware of such things as demographics, the product itself, and the distributions channels.

Anne Howe
Guest
11 years 8 months ago

Indeed this is good news for those who understand shopper marketing to be a fully integrated opportunity to “message appropriately” along the entire Shopper’s Journey. Yes, the nexus may be the store as the point of purchase, but with the acceleration of shopper activity in pre-trip planning that includes visits to ratings and review locations all over the web, it’s important for messaging that is “conversion focused” to be in the right place at the right time.

I hope marketers will realize that to be more effective, they should consider moving some of those brand-only focused digital dollars over to support shopper marketing programs. It will be money well spent to enhance sales and ROI.

Jonathan Marek
Guest
11 years 8 months ago

This certainly appears to be very interesting. There is significant interest these days in driving from online ads to in-store sales. I would want the researchers to say more about their methodology though, before I believe the numbers quoted.

Gene Detroyer
Guest
11 years 8 months ago

Was there ever a question that well targeted, one-on-one internet advertising would be more effective than even the best of targeted TV advertising? Maybe now we can start answering that question of which half of the advertising is wasted. Hint: it is not the internet!

What is most important to consider is the future. As the population ages, internet advertising will become even more powerful. There are still many seniors whose primary reception for communication is television. In ten years, this will change dramatically.

Further, as the Millennium generations ages, TV will become even less important. Does anyone with a DVR even watch commercials anymore?

But, we will see the same reluctance of advertisers and especially adverting agencies as we see with in-store media. For the last twenty years it has been as if there could be no better way than TV despite what the numbers say.

Roger Saunders
Guest
11 years 8 months ago

It’s important for Marketers to see this Category in a holistic fashion. There are a wide variety of media that Influence the Consumer to make a purchase decision — it’s not limited to just Internet and Television, or any other one or two media. The Media Mix does matter.

In a Consumer-centric retail world, it’s important for retailers and CPGs to keep that focus–“product-centric” has stepped out of the center of the equation. It is still a significant part of the picture.

Michael Buege
Guest
Michael Buege
11 years 8 months ago

I am currently working with a major technology client in this area. The business model simply is to enable loyalty database rich retailers to build out “targeted” online video networks to compete for consumer marketing funds currently being spent on traditional media. Every retailer we are currently working with and have spoken to understands this is the future and that they can and will compete successfully with traditional media for these dollars. We have also spoken to numerous packaged goods companies and they all agree that this model is extremely viable and that they would support and invest in retailers that launch this technology.

Ralph Jacobson
Guest
11 years 8 months ago

Who knows what next week will bring in terms of advertising media opportunities, however there are countless examples and articles written about the effectiveness of online ads. Some examples are:

> “Winning search strategies focus on people, not keywords http://bit.ly/cqCND
> “The secrets of great CEO blogs http://bit.ly/1hUBIX
> “5 Facebook uses for businesses http://bit.ly/CHdLN
> “Americans wake up craving Internet. http://bit.ly/xNmSY
> “Facebook could emerge as major e-commerce portal http://bit.ly/N0xQc
> “To go global, get personal http://bit.ly/3t8tXk

The bottom line is that you have to dive into these media as they emerge. Coke had 5M+ fans on Facebook. This shouldn’t be ignored. The most obvious question is how to monetize this effort. There are best practices out there. Just follow me on Twitter to get started! πŸ˜‰ twitter.com/Ralph_Jacobson

Janet Dorenkott
Guest
Janet Dorenkott
11 years 8 months ago

No doubt, online advertising is far cheaper than print and TV. I absolutely believe it is more effective.

DVRs are eliminating the value of TV commercials. I know first hand that no one in my family watches “live” TV anymore. We all TiVo our programs and watch them in the evening. If something went wrong with the taping, we go online and watch them from the network web site where we only have to watch a 30 second commercial at the beginning and middle of the show.

As far as print advertising goes, we canceled our newspaper over a year ago. We get our news from XM radio, Yahoo News and other online news sites. Coupons? Yep, we get those online too or wait for the loyalty coupons to come in the mail.

Kai Clarke
Guest
11 years 8 months ago

Lies, damn lies and statistics. There are too many unknowns here to know how credible this information is. First, because it requires a limited audience (online people who see the ad) it is not an accurate representation of most CPG mass markets. Second, it requires a feedback loop that is restrictive, inaccurate and unproven. Not that Nielsen’s TV ratings are much better, but it has been a better mass market vehicle for marketing and advertising because it provides full motion sound and video (oh yeah, the limited number of people, who are online and can get full motion sound and video limits this survey even more). There are some viable questions, but we are still far away from declaring that online ads drive CPG sales better than other media.

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