Quarter-over-Quarter Growth in Online Display Ad Spend by U.S. Consumer Goods Industry

“While direct response advertising has been very successful on the Internet, with categories like finance and travel devoting a significant portion of their budget to online advertising, on-line advertising will not continue to grow as rapidly without major brands beginning to devote larger portions of their ad budgets to the Web.  We are seeing some of that happen now with Consumer Packaged Goods companies, which are growing their budgets despite a down economy,” said David Wiesenfeld, vice president, online marketing solutions at Nielsen.

YouTube was the top entertainment web site for consumer product companies in 2009, with 637.7 million display ad impressions and a 24 percent share of all advertising in the genre.  AOL.com and Oprah.com rounded out the top three.  YouTube was also the fastest growing site among the top 10, increasing 572 percent year-over-year.

Read the full release regarding consumer product online display ads here.

Across 114 categories representing more than 99 percent of all department sales Nielsen monitors, six categories had price increases of greater than 15 percent over a year ago.  38 categories had price increases of 0 percent to 4.9 percent, while 11 had price declines. The top five categories with the largest price increases over the course of the year:

• Dry vegetables & grains 25%
• Flour 23%
• Jams, jellies & spreads (including peanut butter) 19%
• Car accessories 19%
• Pet food 16%

Higher commodity prices played a role in all of the food categories, while higher crude oil prices drove increases for motor oil in the car accessory categories.  Meanwhile, the following categories decreased in price:

• Fresh eggs -12%
• Milk -8%
• Candles & Incense -5%
• Light bulbs and telephone accessories -3%
• Non-carbonated soft drinks -3%

In the four week period ended January 24, 2009, unit prices across the store were up 5.5 percent – exactly the same as the 2008 Consumer Price Index calculated by the U.S. government.

“U.S. consumers would certainly benefit from lower prices.  But retailers should be careful with how far they push their manufacturer partners to lower prices. If they simply push for lower prices without planning for the right lower prices, they may find it extremely difficult to grow same-store sales this year,” said Todd Hale, Senior Vice President, Consumer & Shopper Insights at Nielsen.

Read the entire article about pricing trends in the lastest edition of Facts, Figures & the Future here.

During the four-week period ending February 21, 2009, sales of jarred peanut butter fell to $87.2 million, down 2.3 percent from the same period in 2008.  41.8 million pounds of jarred peanut butter was sold during the current four-week period, down 13.3 percent for the same period a year ago.  Pounds sold is at the lowest point of the three-year span Nielsen has tracked the total U.S. Food/Drug/Mass (including Walmart) Stores channel.

“While most brands of peanut butter – including the name brands that many consumers know and enjoy – were not subject to recall, the coverage the outbreak received has caused consumers to exercise an abundance of caution with respect to buying this product.  The fact is that these brands are safe and should benefit once consumers recognize that the safety of these and most jarred peanut butters were not in question,” said Todd Hale, Senior Vice President, Consumer & Shopper Insights at Nielsen.

Nielsen tracks sales of a variety of peanut products at thousands of food, drug and mass merchandise stores (excluding Walmart) across the country. Here are the facts:

• Nearly $32 million worth of prepackaged peanuts, including bags, cans, jars and unshelled, were sold in the four-week period ending January 24, 2009.  This is down 25.9 percent versus the previous four-week period, and down 1 percent from the same period a year ago. This reflects the typical seasonal pattern seen for each of the past four years.

• Nearly 12.5 million pounds of prepackaged peanuts were sold in the four-week period, down 25.9 percent versus the previous four-week period and down 9.5 percent compared to the same period a year ago. Again, this pattern is typical.

• Unshelled peanuts showed a small increase in dollar and equivalized unit volume during the four weeks versus the previous four weeks: 0.6 percent in dollar sales and 1.7 percent in pounds sold.

• $72.5 million of jarred peanut butter was sold during the four-weeks, down 11.5 percent during the previous four-week period and down 3.8 percent compared to the same period a year ago.  While the year-over-year decline may seem minimal, it comes after eight consecutive periods of double digit growth in this category.

• 33.8 million pounds of jarred peanut butter was sold during the four weeks, down 11 percent from the previous four weeks and down 22.1 percent from the same period a year ago. Again, this pattern is different than noted for the prior periods.

“The peanut butter outbreak shows little ill-effect on prepackaged peanuts, but the peanut butter category is definitely showing the impact.  It would appear that manufacturers and retailers are quickly removing potentially tainted products off of store shelves.  For those who are not affiliated with the particular supplier of tainted product, now is the time to take extra measures to educate consumers and minimize any negative impact,” said Todd Hale, Senior Vice President, Consumer & Shopper Insights at Nielsen.

Additionally, Nielsen Online notes that traffic to the U.S. Food and Drug Admin website went up +376% Traffic to the U.S Centers for Disease Control website went up +66%. More about how consumers react on the web here. Nielsen will update this information at the completion of the next four-week period to further measure the effect the salmonella outbreak and resulting recalls have had on consumer behavior.

Nielsen recently mined insights from about 35 new item launches that are actively being monitored across a variety of packaged goods categories in the U.S. and found that product innovation remains important, but should be approached in a different way. For example, approximately three-quarters of the products being tracked showed little impact of the economic downturn. Nielsen found that consumer habits with respect to everyday goods are slow to change; their purchase intent and value perceptions remain stable over time, regardless of macroeconomic conditions.

Another surprising finding that goes against conventional thinking is that premium items are not dead. Over half of the items Nielsen is tracking are priced at a premium to their parent brand and/or respective category, and many of these are performing as expected. As consumers cut back their spending in areas such as new cars or vacations, they continue to treat themselves with “affordable indulgences.”

The complete report regarding product innovation in a recession can be read in the February 2009 edition of Nielsen Consumer Insight.

Of the more than 122,000 items introduced, 3,882 (3.2%) achieved more than $1 million in sales, while 198 items (0.2%) achieved more than $10 million in sales.  Only 15 items (0.01%) generated more than $50 million in sales.  The new items generated more than $21 billion in sales in 2008, representing 5.7 percent of all CPG sales reported by Nielsen for the year.

Those categories that saw the most new product launches were cosmetics, candy, paper products and bread and baked goods.  The snack category, which saw 3,619 new products, generated the highest sales – more than $21 billion – and accounted for 18.2 percent of all snack sales for the year.

“Most of the top new items are extensions of existing brands.  Of the top 100 new items, 98 were extensions, with only 2 entirely new brands,” said Tom Pirovano, Director of Industry Insight at Nielsen.

Even though the number of new items introduced in 2008 remained about the same from 2007 (122,743 versus 122,530), they generated 6.6% more sales.

“The consumer shift to private label items requires that brands innovate and add new features to win back shoppers.  It is difficult to predict the year ahead, but we expect new products to have more health and wellness claims, additional package size adjustments and more premium private label products,” said Pirovano.

Limited-portion snacks accounted for only $74 million of the $11.3 billion snacks business.  According to Nielsen, food, drug and mass merchandiser stores (excluding Walmart) over the past five years mostly show that this category’s share accounts for 2 percent or less of sales. 

Despite being a relatively miniscule part of overall snack sales, some types of limited-portion packs showed growth in 2008.  Potato chips and tortilla chips grew by 62.1 percent and 10.2 percent, respectively.  That impressive growth, however, generated sales of only $17.2 million and $12.2 million.

Sales of limited portion cookies and crackers lost steam in 2008, down 6.8 percent and 25.6 percent, respectively, even though both categories showed modest overall growth.

This information was published in the January issue of Facts, Figures & the Future, a monthly e-publication focused on delivering the latest consumer data and trend information to members of the Food Marketing Institute and clients of Nielsen. Facts, Figures & the Future is published by The Lempert Report/Consumer Insight, Inc. and is sponsored by the Food Marketing Institute and Nielsen.

Despite a continued softening of the economy, several media showed healthy growth in advertising for the first half.  Advertising on Cable TV (+8.1%), Syndication TV (+7.2%), and National Sunday Supplements (+7.2%) saw the largest growth, according to Nielsen.  Spot Radio fared worst among the 19 media categories analyzed by Nielsen (-10.1%). 

Although overall Internet ad spending, when including paid search and online video advertising, was up by 11% during the first half of this year, image-based Internet advertising declined by 6% during the first half of 2008, compared to the same period in 2007.

Among specific product categories, Credit Card Services (+18.95%) and Direct Response Products (+20.48%) showed the strongest ad spending gains, while the Automotive (-.01%), Pharmaceutical (-4.76%), and Motion Picture (-4.64%) categories recorded the largest advertising declines.

The decrease in image-based Internet advertising was driven by a 27% drop in online ad spending by financial services companies, which decreased their spending from $1.5 billion in the first half of 2007 to $1.1 billion during the first two quarters of this year. 

Other industries — entertainment (+47%), automotive (+45%), and consumer goods (+32%) — showed strong increases in image-based online advertising during the first half of 2008.

View the full press release.

View Nielsen Online’s report on first half 2008 online ad spending.

Read coverage of Nielsen’s findings in Wired, Investment News, the Financial Times, Crain’s New York Business, TV Week, Broadcasting & Cable, MediaPost, The Hollywood Reporter, Adweek, and Mediaweek.