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The IAB's latest figures show that £653.3 million was spent online in 2004, with impressive growth in the car, finance and entertainment sectors.

But, the FMCG sector only accounted for 7.6 per cent of internet spend in the second half of last year.

Guy Phillipson, chief executive of the IAB, says: "We've seen success in all categories, and automotive has grown considerably, which is very pleasing. But, with FMCGs, I'm sure we could see more growth.

"Although FMCG brands have large budgets, they spend practically nothing, or little, online. To bring them up to an average four per cent would mean a colossal amount for our industry."

He believes that the sector is results-focused and traditionally minded, and therefore it requires proof that online will work: "I speak to a fair number of MDs in FMCGs and find they're concerned with direct response, and not brand-building. They are happy to use TV, but some are quite stuck in their ways when it comes to online."

The problem, he believes, lies with brand managers who think of the web in terms of search and direct response, and relate it to sales. "We need to show them an insight into consumer behaviour online and the empowerment it brings."

Yet the sector is evolving, says Frederic Colas, worldwide partner at Fullsix Group and former director of interactive marketing at P&G, Europe.

He says: "Definitely, the use of the internet as a marketing tool for FMCGs is increasing right now across Europe. There have been two or three difficult years but, since the end of last year, lots of companies are considering how to invest and integrate it as a marketing tool."

Until recently, FMCGs only spent an exploratory budget on the net and dabbled with ideas, says Colas. "The internet was not integrated into mainstream marketing. But this is changing really fast. The people investing online are working on an integrated approach - this is a change in mindset."

Dina Gowar, associate director of Carat Digital, is seeing a gradual rise in ad spend for the FMCG sector. "A lot of clients are spending more online but, like everything else, they won't do it in abundance at first. It is an education process. Just like offline spend, they start small."

Colas sees three main ways in which FMCG brands approach the internet: to get a presence online, as a loyalty tool, and for online marketing.

And brands are starting to think of eCRM, he says. "It's especially interesting to them because they have never done any big programme on loyalty so far."

One reason is cost. To justify relationship marketing via direct mail, the consumer has to be of high value. If a brand is selling shampoo, and the consumer is spending some £40 a year on that brand, it is too expensive for paper advertising. "But, with eCRM, the cost is low. Brands can increase the frequency of content, and the internet becomes a tool that makes relationship marketing interesting."

A successful online-marketing strategy depends on the allocation of budgets internally, Colas says. "At first, a lot of firms created a team that specialised in how to use the internet. They got a small budget and started to explore how they could use it." But the marketers in charge of allocating ad budgets for all media were not involved.

He continues: "Now, more mainstream marketers are integrating the internet into their mainstream strategy - across a lot of FMCG categories. This is the most important point: the internet is entering mainstream media and has to deliver volume. People don't just say, 'I want five per cent of the budget' - they will put nothing or two per cent aside, depending on what the internet can deliver for the company." Integrating the web into this strategy is vital.

This point is taken up by Giles Rhys Jones, interactive director at OgilvyOne.

Consumers digest media through different channels and online is key to integrating a campaign, he says. "Online provides an integrated touch-point."

Jones cites Dove's ±±¾©Èü³µpk10 for Real Beauty, which includes TV, poster and print advertising: "That stimulates thought, but the heart of the debate happens online." Particularly on Dove's own web site.

How an FMCG brand benefits from the web depends on the message it wants to promote, Gowar says. "The format that works well varies from client to client. Now there is greater penetration of broadband, FMCG brands can look at this as a mass-broadcast medium." The challenge is in developing the right route for each advertiser.

Jason Carter, managing director of interactive at Universal McCann, says the issue involves offering customers value. He lays out the criteria of judging the success of online FMCG ads by direct sales. Not many people buy these products online, so it is hard to measure any uplift in sales unless you're tracking vouchers or bespoke offers, he points out.

"Instead, we are trying to educate clients far more about offering value to customers," he explains. "Consumers have far more choice; they are doing more on broadband and you have to offer them something different to engage them. You have to create something the user wants."

Carter points to Barcardi, which runs B-Bar national club events. It uses digital to add value for customers, who can communicate with the brand and sign up to receive special invites, news and information.

He adds: "It's more about how they feel about the brand."

WHY FMCG BRANDS ARE POOR SPENDERS ONLINE

- Online is a much more proven medium for direct response than branding.

It can prove its direct power well, but it is more difficult to prove the medium's branding power.

- In the last 60 years, FMCGs have built models and rationales that dictate where their spend goes and how its effectiveness is measured. It's a challenge for these companies to integrate the web into these models in order to measure its effectiveness.

- FMCGs work very well on broadcast media. They give excellent reach and frequency, increasing the recall of ads. The web is just starting to deliver the levels of reach and frequency that are of interest to FMCGs.

- Agencies have not sold online to FMCGs well enough. Until recently, large agency networks have been weak in the online arena and haven't been able to sell its benefits. A lot of these brands are traditionally minded and stick with what they know - if they're seeing success with TV ads, why shake the apple-cart?

- Brand-planners in big agencies need education on online.

- FMCGs need to test the medium constantly to find out what works and what doesn't.

Thanks to Simon Anderson, managing partner of Unique Digital.