Campbell’s Soup is doubling digital advertising spending amid falling sales as consumers turn away from processed foods.
The manufacturer, which spent $320 million on advertising last year, plans to cut TV ad spending to half of its 2016 media budget. Digital will account for 40%, up from roughly 20% this year.
U.S. consumer products makers are spending an estimated 12.3% more each year on digital advertising. Snack food maker Mondelez International-North America wants more than half its spending to be digital by 2016, while General Mills recently said it would spend 25% on digital.Unilever plans to build a database of consumers segmented based on buying habits and demographics, information it will use for marketing campaigns.
One of the biggest users of digital advertising has been Kraft Foods, which saw high returns on investment from programmatic ad buying. Kraft also experimented with Google Lightbox technology to create awareness about its Fresh Take product line. Ordinary-looking ads expanded to a full-page micro-site featuring videos, coupons and recipes.
However, the food industry still lags behind other sectors in digital investments. Campbell’s ranked Average in L2’s Digital IQ Index: Food last year, echoing the broader trend. There was one exception: organic food.
Organic food companies led the Index when it came to content investments in brand sites. Highlighting all-natural ingredients and production processes, these sites capitalized on the popularity of fresh, healthy products. Growing demand for such transparency hurt processed food makers like Campbell’s, which just slashed its long-term sales growth forecast from 3-4% per year to 1-3%.
Campbell’s is repositioning itself by eliminating artificial ingredients from its products, as well as by making acquisitions like Bolthouse Farms, Plum Organics and Garden Fresh Gourmet, which it is placing in a new division called Campbell Fresh. Sales of the company’s organic products rose almost 12% in the past three years. New digital advertising initiatives could highlight this changing focus.
“We are moving away from brand marketing to brand experience, where we earn consumer’s trust instead of buying it,” CEO Denise Morrison said.
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