Free Subscription

  • Access daily briefings and unlimited news articles


Only $34.95 per year
  • Quarterly magazine and digital
  • Indepth executive interviews
  • Unlimited news and insights
  • Expert opinion and analysis

FMCG brands will boost digital ad spend as consumers stick to online

Most Australians who started buying more of their groceries online as a result of the Covid-19 say they plan to continue to do so, even when the pandemic is over.

A ZenPoll in early March found that 29 per cent of the 1023 Australians polled started buying more groceries online as a result of the pandemic, and 21 per cent of them said they would continue. 

However 74 per cent still strongly prefer the in-store experience with only 24 per cent preferring online.

“As restrictions have been eased or removed, the convenience of the online experience is what has kept many new converts online, said Zenith Australia’s head of strategic insights, Kim Xavier. “So balancing the benefits of the in-store experience with the convenience of online will be a challenge for retailers.”

The research was part of a broader international study assessing the importance of digital advertising spending by FMCG companies, resulting in Business Intelligence – FMCG Food and Drink report, published today. Zenith forecasts FMCG food and drink brands will increase their share of ad spend on digital channels by 7 per cent annually through to 2023, nearly double the 4 per cent increase in overall FMCG ad spend over the same period. 

“The online nature of these services is increasing supermarket retailers’ focus on digital media investment in what has otherwise been a softening market,” said Vikki Pearce, head of digital at Zenith Melbourne. 

“And FMCG brands are following suit – particularly over-indexing in their online video spend as they strive to keep top of mind and capture share of wallet not only in the growing e-commerce opportunity.”

Globally, FMCG brands still rely heavily on traditional TV, which accounted for a 39-per-cent share of total advertising budgets last year, compared with 24 per cent for brands overall. 

Zenith forecasts that FMCG digital ad spend will increase from US$12.3 billion worldwide last year to $14.9 billion in 2023, and that its market share will rise from 46 per cent to 49 per cent. 

“FMCG brands need a new comprehensive approach to reach-based planning,” said Ben Lukawski, global chief strategy officer at Zenith. “That means combining TV, paid advertising in online video, virtual placement in streaming video on demand platforms and perhaps even a presence in gaming, using first-party and second-party data to prevent duplication and optimise incremental reach.”

Zenith’s report covered 12 international markets: Australia, Canada, China, France, Germany, India, Italy, Russia, Spain, Switzerland, the UK and the US, which between them account for 73 per cent of global ad spend.  

You have 3 free articles.