The CPG sector, or consumer packaged goods sector, refers to the companies that produce and market products for households. These company's main products are food, beverages, personal care items, soaps and detergents. This sector has been a key part of the economy for over a century as it is highly coordinated and tightly-regulated by the Food and Drug Administration, resulting in consistent products across many industries. The sector operates because it needs consumers to buy its brands, which results into benefits including increased sales of associated product lines.
Consumer packaged goods (CPG) companies are among the biggest spenders on digital advertising, spending an average of $30.8 billion annually. This is more than twice as much as the next largest category of advertisers, food and beverage brands. Companies in this industry use digital media to reach their target audience by giving them information about products and services that they need.
The CPG industry's digital advertising spends in 2018 were estimated to be $31.2 billion, a 7.5% increase from 2017, according to data from the Straits Research.
Mobile advertising expenditure increased 179% to $14.9 billion in 2014 for search and display ads on apps; mobile app spending is projected to more than double over the next three years.
This year, Google's ad revenue from its paid YouTube service is projected to exceed the advertising revenues generated by 30% of Fortune 500 companies. Increasing demand for mobile video activities—from advertising formats like native and display ads, auction-based formats for premium inventory (like pre-roll) as well as subscription services—"could result in an increase of upwards of $7 billion for the CPG sector within three to four years", according to Dentsu Aegis Network.
If you look around the CPG [consumer packaged goods] sector in terms of such things as Nielsen's review of gender and age breakdowns by usage patterns, preference for social media content or mobile-app downloads amongst Millennials you'll see a lot less overlap between traditional TV owners and non-traditional video viewers than there was 20 years ago – which means that real advertisers want to reach all of those viewers through video, and it's not just self-serving as TV used to be".
But digital ads will account for only 10% of global CPG spending. "Digital media won't replace traditional in the same way that television did ", said Waldman: "[Consumers] still want a mix of digital and non-digital". It makes sense for companies create new ways of doing business with our clients". In brief, the digital ad market is growing rapidly, and the traditional TV industry is struggling to keep up. The result will be a new paradigm of advertising.
CPG advertising is a new and innovative way for CPG companies to advertise. The major benefit of advertising, digital marketing companies are now able to reach a wider audience. They can promote their products in different ways such as online, social media, email, television. Companies can advertise through digital channels, TV and print media. There are different types of advertising like digital marketing, social media marketing, SEO, SEO PPC, online reviews and various other forms of marketing like Advertisements in social media platforms like Facebook, Instagram, Twitter, Pinterest and YouTube are the most effective way to advertise. These platforms help in reaching a larger audience. CPG companies can also use cpg blogs and cpg websites to advertise their products.