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CPG Firms Not Using Internet Advertising

NEW YORK - According to the just-released eMarketer report, CPG Online, consumer packaged goods (CPG) companies, which are among the world's leading advertisers in terms of both total budgets and marketing expertise, account for a remarkably small portion of overall internet advertising.

Competitive Media Reporting (CMR) reported that CPG companies spent $12.4 billion across all measured media in 2000 and $11.9 billion in 2001. However, researchers disagree on exactly how much the industry is spending online, with estimates ranging from 2% of brand advertising budgets to practically nothing. Jupiter Media Metrix estimates that CPG firms spent $134 million in online advertising in 2000, whereas Accenture finds that internet marketing did not even register as a portion of most CPG manufacturers' marketing budgets in 2001.

"This was one of the most surprising findings from our study," says Steve Butler, eMarketer Senior Analyst. "Consumer packaged goods pioneered radio and television, but have not yet embraced the internet. However, once they do start spending more on internet advertising, website operators such as AOL, Yahoo!, iVillage and stand to benefit immensely."

CPG manufacturers are still learning about the opportunities for targeted marketing that the internet provides. AdRelevance found that by better-targeting their online advertising, cosmetics manufacturers were able to reach a 57 percent female demographic through fashion, children's and family websites, while alcoholic beverage manufacturers reached a 77 percent male demographic on sports and automotive websites.
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