Online ads boost CPG sales

29 May 2012

NEW YORK: Brands in the consumer packaged goods sector generate increased sales of almost $3 for every dollar they invest in precisely-targeted online ads, new research has shown.

Nielsen Catalina Solutions, a joint venture between Nielsen, the insights group, and Catalina Marketing, the agency, drew on 800 studies from the last seven years, using data from 300 brands and 80 firms.

Overall, it was reported that the ratio of incremental sales delivered versus the amount invested in ads - in the form of cost per thousand - based on actual purchase figures reached an average of $2.97.

Mike Nazzaro, CEO of Nielsen Catalina Solutions, suggested companies in the consumer packaged goods (CPG) industry, one of the most valuable ad categories, still under-represented the web in their media mix.

"CPG marketers spent over $22bn in total advertising in 2011, including $2bn to $3bn in the online medium," he said. "These findings reveal an opportunity for advertisers to increase sales."

When monitoring the payback per dollar spent by segment, ratings peaked at $5.29 in the pet category, measured against $3.17 for beverages, both ahead of the norm.

Elsewhere, this figure came in at a more modest $2.73 for health and beauty aids and general merchandise products, although this effectively doubled expenditure levels.

Over the counter medicines logged $2.72, whereas food products yielded the lowest return, on $2.36.

"The marketer's ability to precisely reach the desired consumer segment in the right media enabled by shopper-based analytics is changing the way advertisers plan and buy media," Nazzaro said.

"Not only can we prove that online advertising drives sales, but the returns on adspends are significant when purchaser-based data is used to optimise the media buy."

The study produced by Nielsen Catalina Solutions combined media viewing statistics covering TV, online display and video, print and mobile, alongside shopper purchase information for 60m households.

Data sourced from Nielsen Catalina Solutions; additional content by Warc staff