The packaged-goods world of products from macaroni and cheese to cereals to cake mixes and beyond has been dominated by powerful corporations with a lot to spend on advertising; they have begun to shift more of those dollars to online advertising in greater amounts.
Using the Internet for advertising has not been the domain of software and printer ink refills for quite a while. Nearly anything that can be advertised has been, and for whatever hasn’t been advertised, there is probably a website somewhere devoted to it.
Companies like Kraft Foods and General Mills crave devotion to a brand the way people crave oxygen and a lack of sharp objects sticking into vital organs. Savvy businesses have known for years a repeat customer offers much more value than a new customer, and at the high end of the Fortune 500 scale they spend a lot of money to keep the customers they attract.
Attracting new customers and reinforcing the brand for existing one means going where the audience can be found. Increasingly, that has been the Internet, where each hour people spend there means an hour less of traditional media like television or newspapers being consumed.
The big brands can’t get consumers to devour their advertising if the audience is off playing Bejeweled 2 or reading sports scores someplace online. The Wall Street Journal reported how the packaged goods sellers spent about $13 billion in advertising in 2005, but less than 2 percent of that figure on Internet advertising.
Naturally, those that provide online ads, the Googles and Yahoos, and soon the Microsofts, would love to see that figure increase. Preferably if any one of them can shove the others aside and gain a bigger slice of the pie for itself.
The article noted how Yahoo may have moved to an early lead in gaining an edge with these high-profile brands. Four years ago, Yahoo began working with ACNielsen to develop Consumer Direct. That service provides valuable information to the marketer: what impact a particular online ad campaign had on a product’s sales.
As the big online players increase the breadth and depth of sophistication of their data-mining techniques, and can target particular demographics with greater accuracy, the corresponding spending by brand name companies like the packaged goods firms should increase. That’s a tasty prospect to the advertising sellers, and they can’t wait to dine.
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David Utter is a staff writer for Murdok covering technology and business.
