FMCG brands increase online ad expenditure

   FMCG companies significantly increased their online adspend in the first half of 2010, accounting for £240m of the £2bn spent on the medium between January and June. 
   
    Brands in the sector, which have not significantly invested in the platform in the past, now account for 11.8% of UK online adspend, up from 9.4% last year, according to research from the Internet Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC).

Marketers invested almost £2bn online between January and June this year, equating to a 10% increase on the same period in 2009.

Online now accounts for 24.3% of total UK advertising expenditure.

• The 10% year-on-year growth rate is a marked improvement on the 4.6% increase recorded in the first half of 2009, when the recession was in full swing.

•   In the first half of 2010, search marketing accounted for £1.2bn, or 60%, of the total spent on online advertising.
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• Paid-search grew by 8.9%, while spending on display ads increased by 6.4% to £381m. The majority of the latter was devoted to embedded formats such as banner ads.

• The total spent on digital advertising by FMCG brands was surpassed only by the expenditure of the media, entertainment and finance sectors.

• Media and entertainment brands contributed 14.4% of total spending online, compared with 13.2% for the same period last year.
• Finance brands, meanwhile, lowered their online adspend and accounted for 13.3% of the total, compared with 14.9% for the first half of last year.
• Jon Ingall, managing director, AIS, said: "Display advertising is getting smarter and, because it can be priced and tailored live, it is now a far more powerful tool than it used to be."
• He cited recent campaigns by Old Spice and Marmite as evidence of established brands directing their advertising online in an attempt to attract new audiences.
• Brands spent £20.7m on pre- and post-roll video advertising in the first half on 2010, an 82% rise on the same period last year. This form of advertising is predicted to continue to grow, if web-based TV initiatives such as YouView and Google TV lure adspend.

• Guy Phillipson, chief executive of the IAB, said: "FMCG brands have taken time to understand the evolution of online advertising, but they are now engaging with the relevant platforms.

• "It was tough for advertisers last year, but they have learned a lot and, now that advertising budgets have returned, it is good to see double-digit growth in online adspend, ahead of overall advertising."