COMMENT: FMCG companies reconsider internet strategy

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Online advertising suffered a loss of faith following the bursting of the bubble. But as MSN throws its weight behind a campaign to convince traditional offline marketers to go online, the time has come for fast-moving consumer goods companies to re-examine the medium. MSN's campaign is a timely reminder of the very real benefits of online advertising that should help spending to recover.

MSN is behind the innovative new Let's Get It On campaign, aimed at alerting fast-moving consumer goods (FMCG) and auto companies to the particular benefits of online advertising over traditional marketing. MSN's influence in encouraging FMCG companies to revisit the Web is prompting speculation that big developments are afoot for online marketing.

Crushed by the collapse of the dot-com empire, it seemed that online advertising would never recover. Expenditure on Internet advertising currently makes up only 1% of total advertising spending, despite the fact that it now boasts a 12% media share. But now FMCG companies are beginning to reconsider the benefits of being interactive and online.

In fact, there are real advantages to choosing the online option. As the new campaign makes clear, because Internet advertising can be targeted much more precisely than television, print or radio, advertisers have a better chance of scoring on the Web. The Web's interactivity also makes it easier to grab users' attention.

The Internet's lack of regulation and the possibility of viral marketing offer additional key benefits. For example, an advert for Lynx brand deodorant was recently kept off screens amid accusations of poor taste. However, it was a simple matter to place the advert on the Internet where it could not be regulated and encourage visitors to the Web site to send it to their friends. As a result, the advert made an impact and reached its target audience despite never being seen on TV.

Although the medium faced an uncertain future in the aftermath of the collapse, advertisers' sudden loss of faith is beginning to look like an over reaction. Rapid spending in the order of pre-bubble days is unlikely to return, but with MSN throwing its weight behind an eye-catching campaign, more FMCG companies are likely to boost their spend on online marketing.

Related Research: Datamonitor, " Online CRM: Building better customer relationships" (DMCM0062)

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