Social media has forever changed the consumer purchase journey. Gone are the days when brands could keep a firm grip on their messaging, and steadily guide their consumer’s journey down the purchasing path. Why, you ask? Well, consumer decisions are strongly driven by external forces that brands can’t control – namely the opinions, experiences, and tastes of their (Facebook) friends.

CPG Brands Are Behind the Curve with Social Spend

The Interactive Advertising Bureau pegs total U.S. digital spending at $36.6 billion, estimating the entire CPG industry at 7% or $2.5 billion of that. According to Gartner, Marketers allocate 9.4% of their digital marketing budgets to social media, which is the fifth smallest budget, about $235 million for the CPG industry. Yet, Marketers cite social media as the second most important activity contributing to their success, tied with online advertising. Fortunately, there are some CPG brands that are putting their money where their mouth is. Procter and Gamble Co. is spending up to 35% of its $4.8 billion marketing budget on digital marketing, or $1.7 billion in total. Using the same 9.4% figure from Gartner, that would put P&G’s social media spending at $160 million. That means the rest of the CPG industry is spending $75 million on social media.


Figure 1: How Marketers Allocate their Digital Marketing Budgets


Figure 2: What Activities Contribute Most to Success


Social is the Most Critical Channel for the CPG Purchase Journey

According to a Google report, 82% of purchases in the CPG industry are made within 1 day of interacting with a brand’s marketing, one of the shortest buying cycles of any industry. Additionally, CPG is the only industry where social media is closer to the point of purchase than both display ads and email marketing. This data, combined with the fact that consumers are spending 3x more time on Facebook than on email and search engines, illustrates why CPG brands should be spending more of their marketing budget on social media.