The consumer package goods (CPG) industry generates nearly $2 trillion in sales in the US, and it is second to none when it comes to total advertising expenditures. Yet, although the industry will spend an estimated $15.6 billion to advertise online in 2006, that accounts for just 1% of its total advertising outlay.

It may be time for some out-of-the-box thinking.

The "How America Searches" report, from iCrossing, recommends that CPG marketers increase their use of online and search engine marketing, targeting leading search engines and retailer Web sites, as well as brand and specific product sites.

A survey conducted for iCrossing by Harris Interactive found that among online adults in the US, 39% have performed a search for CPGs online, with 20% indicating they do so at least monthly and 9% claiming they do so weekly.

CPG online searchers tend to be well educated, wealthy and female, and fall into the 35-44 age bracket — prime targets for CPG marketers.

CPG searchers make nearly equal use of search engines, retailer Web sites (such as Costco.com) and brand/product sites (such as BettyCrocker.com and Tide.com) to search for CPGs online. In the survey, 67% of respondents cited search engines, 61% selected retailer Web sites and 60% chose product and brand sites.

By contrast, only 26% go to shopping comparison sites like BizRate.com; even fewer visit product rating sites.

When it comes to specific product categories that consumers search for online, footwear and apparel generate the most interest, followed by food items, personal care products, pet food and supplies, and cosmetics.

The reasons why consumers go online and search include looking for special offers and coupons, finding more product information and store locations, and buying.

The reasons why more CPG marketers are not taking iCrossing’s advice — and going online to find their customers — are not so clear.

More here.