FMCG online spending growth continues as IAB challenges Think TV claims

The online advertising industry has returned challenged claims made by the TV industry that online advertising led to short-term losses for FMCG marketers, saying FMCG brands continue to grow their investment in online video.

iab-pwc-report-grpahicThe PWC/IAB Online Advertising Expenditure Report shows total spending for the Q1 of the 2017 financial year rose to $1.88b – a 20.3% lift on the same period last year, but the annual growth rate continued to slow from the 33% uplift seen between 2014 and 2015.

While growth continues to slow overall, IAB CEO Vijay Solanki said major FMCG marketers, including Kimberly Clark, Unilever and Procter & Gamble, continue to invest heavily in online video.

Solanki: waiting to see Think TV's research

Solanki: waiting to see Think TV’s research

“The dominance of FCMG in video shows that marketers are warming to the longer-term effects of cross-device and even cross-media campaigns that are underpinned by digital video,” Solanki said.

“Marketers understand relationship-building and its value and they are re-investing dollars where they can realise strong, measurable ROI and brand recall.

“The spend on digital video in these major industry categories speaks volumes in that regard.”

Overall, spending for the September quarter lifted from $1.565b last year – with search and directories up 22.8% from $704m to $864m – while general display was up from $557m to $673m, a rise of 21%.

Classifieds saw more modest growth of 13.4% to $345m.

FMCG’s share of the total online pie grew 8.2% while its share of video display grew to 23.5%.

In response to Think TV’s claims earlier in the week that digital advertising was delivering a short-term negative return on investment, Solanki said he was waiting to see the research.

“We are all grown up here,” Solanki said. “We have asked for the report and have to give it detailed analysis. I go back to the bottom line – the consumer is coming to TV-based content in many different ways.”

Solanki said the overwhelming message from the PWC report was that the use of smartphones by consumers was forcing brands to connect with them through mobile and that as long as that continues the trend media will follow.

With regard to mobile, general display advertising captures 59% of spending compared with 41% for search.


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