CPG Companies Crank Up Display Ad Spend

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Even as their overall ad spend has atrophied, consumer packaged goods companies have boosted their investment in online display advertising by 57 percent in the last two years, according to Nielsen.

The researcher reported yesterday CPG firms have cranked up image-based online ad spending from $99.8 million in Q1 2007 to $156.2 million during the same period this year.

Perhaps more surprising is that Nielsen found these brands spent very heavily with one of the Web's most reputedly brand-dangerous sites: YouTube. The company measured 638 million display ad impressions on the video site, which captured a 24 percent share of all advertising in the entertainment category. AOL.com and Oprah.com trailed with 323 million and 203 million ad impressions, respectively.

The YouTube gains suggest advertisers have become less wary of the site, which they long avoided for fear of associating their brands with potentially offensive content.

"YouTube, as one of the most visible examples of online video, is working hard to monetize their inventory across a number of verticals and Consumer Goods may hold particular promise in that effort," said David Wiesenfeld, VP online marketing solutions, in a statement.

In real numbers, the spending rises are relatively small when compared to CPG spending on other channels. For example, TNS estimates that in Q1 a single CPG advertiser, Procter & Gamble, spent $674 million in all U.S. media, down significantly from the year-ago period owing to cuts in old media. Even so, the figure is more than triple Nielsen's estimate for all packaged goods spending on online display advertising during the same period.

Nielsen's estimates do not take into account many types of online ad spending, such as search and social network integration. Increasingly, packaged goods giants are investing in custom video and other interactive experiences that aren't measured by ad tracking systems such as those offered by TNS and Nielsen.

Some of these are surreal. In one such project, P&G created a video-centric experience for Tampax, in which a 16-year-old boy named Zack wakes up to find his "guy parts" replaced with "girl parts." Hosted at Zack16.com, the experience uses videos, tweets, and other page elements to engage young girls with the Zack's story and with the Tampax brand.