Tuesday, 25 February 2014

P&G & Mondelez spend approximately 25% of their US media budgets on digital

"If there were any doubts that the age of digital marketing has fully arrived for packaged-goods companies, the Consumer Analyst Group of New York conference in Boca Raton, Fla., last week should put them to rest.
One after one, executives of top players talked about how big digital had gotten for them -- and how they were still expanding it. It was a contrast to only three or four years ago, when the executives were also touting digital, but spending was in the low-single digits of CPG media budgets, so even double-digit growth remained pretty insubstantial.
No more. For many top consumer products companies digital either already has or is heading toward eclipsing magazines as their No. 2 spending category behind TV. And for some it may soon be No. 1.
Executives of Procter & Gamble Co. and Mondelez International both said their companies now spend about a quarter of their U.S. media budgets on digital and plan to keep growing that share as they see improving return on investment.
Mondelez President-North America Mark Clouse said the company wants more than half its spending to be digital by 2016, because it's getting twice the return on investment from digital that it is from other media.
Jean-Paul Agon, Chairman-CEO of L'Oreal, the world's third-biggest ad spender behind P&G and Unilever, said digital is now 12% of the beauty giant's global spending and trending upward because of its efficiency and synergy with fast-growing e-commerce in beauty. E-commerce sales grew more than 20% for L'Oreal last year, about quadruple the rate for the rest of the company.
General Mills CEO Ken Powell said his company has increased the digital share of its ad budget from 8% of spending in 2008 to 17% in fiscal 2013 and expects the shift to continue, even if 79% of its budget today is spent on TV.
P&G is looking at hiking digital to help lower the share of sales it spends on advertising without hurting effectiveness. "The beauty of the digital, search, mobile, social media worlds is they're fundamentally more efficient," said Chairman-CEO A.G. Lafley in a CAGNY presentation. "So if you really know which consumer matters most to you, and that's our job ...then you can run a mix that gets a lot more efficient."
Source:  AdAge, 24th February 2014

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