Food products to dominate CPGs` online ad spending in 5 years, Jupiter says

Move over, household cleaners and laundry detergent. Food products are expected to dominate consumer packaged goods ad spending online within five years, as CPG manufacturers increase their online ad buys across the board, according to new research from Jupiter Media Metrix. Though household products are today a leading category in the relatively modest online ad spending of CPG manufacturers, accounting for an estimated $67 million in online ad sales in 2001, Jupiter analysts predict that as a category, online ad spending on household goods will trail far behind that projected for food within five years.

In fact, Jupiter predicts CPGs will be spending some $299 million online to advertise food by 2006, topping spending in all other categories and accounting for about 34% of online CPG advertising. That growth has two drivers, according to Jupiter analysts: CPG manufacturers attempting to reach Internet-savvy youth who have a significant role in household food buying decisions and big strides by the online grocery segment as it finally learns how to do it right on the web.

Also slated for major growth in online ad spending among CPGs is the cosmetics and beauty category. CPG online ad spending on these products was estimated at $44 million in 2001, but that’s expected to surge to $195 million by 2006, due to higher online sales potential versus other product categories, and as online customer targeting tools are refined.