Amazon eyes advertising opportunities in U.S. consumer packaged goods sector; U.S. CPG online ad spending will likely reach nearly US$5B by 2015, says research firm

Cindy Allen

LOS ANGELES , April 4, 2012 (Industry Intelligence) – Amazon.com Inc. is eyeing advertising opportunities in the U.S. consumer packaged goods (CPG) sector, Reuters reported April 3.

During a speech at an ad:tech conference in San Francisco on April 2, Amazon Global Advertising Sales Vice President Lisa Utzschneider said the consumer packaged goods ad market constituted a “huge opportunity.”

Market research firm eMarketer Inc. said that, by 2015, U.S. CPG online ad spending will likely reach nearly US$5 billion. This is nearly twice the amount of money that was spent by this sector on online advertising in 2011.

Roughly six years ago, Amazon began selling advertising space to other companies on its websites. The company has also begun running advertising campaigns on its Kindle devices. During 2011, Amazon stepped up efforts in the online advertising sector.

During the week of March 25, Amazon launched online ad businesses in Canada and France, said Utzschneider. Amazon already has online ad businesses in Germany, Japan, the United Kingdom and the U.S.

Ben Schachter, an analyst with Macquarie Group Ltd.’s Macquarie Securities unit, said that, given Amazon’s knowledge of its customers’ purchasing habits, the company is well positioned to provide valuable, targeted advertising experiences.

The CPG industry is an attractive sector for advertisers because CPG companies tend to spend large amounts of money on advertising. In 2011, Kimberly-Clark Corp. spent US$686 million on advertising, less than the $698 million that it spent on advertising the previous year.

Approximately 4% of Amazon customers purchase a CPG product from the site, which provides a huge opportunity for CPG marketers, said Utzschneider.

Recently, Amazon ran an advertising campaign featuring Kimberly-Clark’s Huggies Slip-ons diapers. The ad campaign ran on Amazon’s Kindle devices and on the company’s websites. Some of the offers included a $2 discount on the featured product in addition to a 20% discount on Amazon’s subscribe-and-save program. Some of the advertisements also contained embedded customer reviews.

Mobile device advertisements for Huggies Slip-ons helped double mobile sales of the product, Utzschneider noted.

Utzschneider added that consumers were 13 times more likely to purchase the diapers, and 30 times more likely to obtain additional information about them as a result of the advertising campaign.

The primary source of this article is Reuters, London, England, on April 3, 2012.

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