Once-Wary US Industry Giants Embrace Internet Advertising

Article excerpt

In their pursuit of advertising dollars, Internet companies are winning some important converts: the consumer packaged-goods companies that sell everything from cookies and cola to skin cream and soap.

After years of cautiously experimenting with Web marketing, powerhouse advertisers like General Mills Inc. and Kraft Foods Inc. are cranking up online spending and increasing the range of brands they promote on the Web.

General Mills, maker of Cheerios and Betty Crocker baking mixes, expects to nearly double online-ad spending in the current fiscal year. Kraft, home of Jell-O and Kool-Aid, plans to double its number of online-ad campaigns in 2006 and to increase the number of brands it advertises on the Internet by at least half.

The shift underlines the Internet's threat to traditional media such as television and print magazines. It suggests that the boom in Internet advertising that has already fueled rapid revenue growth in recent years at Google Inc., Yahoo Inc. and other companies could continue as still other groups of more traditional advertisers step up online spending.

The packaged-goods companies say their customers are spending more time online and using the Web in new ways, such as watching TV shows and other video. "Our job is to invest in where consumers are engaging with media," says John Galloway, vice president of sports, media and interactive marketing at PepsiCo Inc. …