By Jennifer Pelino
Consumer packaged goods (CPG) companies are some of the biggest spenders in advertising globally and nationally, as 31 of the top 100 advertisers in 2016 were CPGs. For brand marketers, the media budget is typically the most costly line item on a company’s profit and loss statement, so minimizing waste in ad spending and optimizing results is an important component of every campaign.
CPGs have been at a disadvantage compared to other advertisers. Although they have large budgets to leverage what ad tech has to offer, a majority of their sales transactions are still completed offline. Therefore, many of the real-time data metrics and connections that can enhance and maximize their media strategy are diminished.
Despite a primarily offline sales channel, CPG companies have taken the leap and are leveraging digital and mobile channels for advertising as they are keenly aware of the audiences, scale and shifting media landscape. They understand the ability to distinguish their communications and the profound impact that personalization has on the consumer, loyalty and the media landscape.
Brand marketers take every opportunity to ensure optimization of their programs to gain the maximum return on their investment. Optimizing media plans and reducing waste by a few percentage points allows for gains as long as the benefits are not canceled out by a proportionate increase in media costs.
The abundance of data and its ability to be fully integrated makes it possible for marketers today to connect media exposures across platforms to sales results in a way that is unbiased and accurate. To measure campaign success and optimize results as campaigns occur and for future campaigns, CPGs must use the most accurate measurement tools available.
Winning with Personalization
With the media landscape continually shifting, how major CPG companies spend their ad dollars is shifting as well. CPG brands have traditionally focused on television, but their buys are now mirroring households’ changing viewing behavior, as CPGs attempt to reach more valuable consumers across more delivery channels.
Not only are consumers engaging with more forms of media and spending less time with each channel, they are also increasingly expecting their advertising to be personalized – not an easy feat for marketers. Brands understand that in order to reach their intended target, a holistic, cross-channel campaign is imperative.
Granular, integrated data and a deeper understanding of consumers can create meaningful insights on consumer segments against which to target and measure. Then, it’s critical to analyze if 1) campaigns are targeting the right individuals, and 2) whether those individuals are reacting to the creative as was expected.
There are many ways to measure media, some complementary in nature. For instance, marketing mix modeling provides a high-level overview, but it can often miss certain nuances from digital campaigns. Taking a look at a shorter-term lift analysis through cross-channel measurement allows for more granular measurement of a specific campaign to understand the “why behind the buy.”
By reframing media measurement around the consumer and including channels across a spectrum of precision and reach, marketers will have a more comprehensive, 360-degree view of why sales performed as they did.
Connecting all the Dots
Connecting performance across all media channels is the only way to understand the true impact of paid, owned and earned media. By quantifying and combining the impact of marketing efforts, exposure and purchase behavior, brands can more easily connect the dots across media channels to pinpoint the source of sales lift and discover synergies to optimize future campaigns and maximize dollars spent.
While media partners provide overall impressions, reach and frequency to a CPG company, brand marketers aren’t able to assess unduplicated reach and aggregate frequency until exposures are brought together at the household level. This is accomplished by connecting all exposures for each individual household, then aligning them by the time stamp of exposure to create a comprehensive and longitudinal view of campaign exposure. By stacking this information across households, IRI reports on both the reach and frequency for each element and the campaign as a whole.
In addition to aligning exposure to all media elements, IRI also aligns each household exposure to in-store trade (feature, temporary price reductions, in-store display). This is critically important for the analysis of media sales impact because it enables control for trade and truly isolates only media impact. IRI is uniquely qualified to include this approach in its analysis because its data set tracks exposure of offline sales to millions of households and uses casual variables from thousands of retail outlets. This enables the ability to ensure any seen changes in behavior are due to the elements being measured.
This approach, coupled with the scale of IRI’s single-source data set, allows cross-channel campaigns to be measured—not just with two channels, but a number of channel combinations to obtain the most granular of results to drive better strategic marketing and media decisions.
Putting It All Together
CPGs have become more rigorous with continually gaining and reapplying insights, reallocating ad spend and reducing waste in media plans to maximize their existing media budgets. As they continue to move towards more real-time quantified decisions, their results will continue to improve. It’s all about figuring out how to get to that sweet spot between the most impactful channels and the most desired results.
Integrated granular data, household-level targeting and measurement, and in-flight optimization can get you there.
Contact me at Jennifer.Pelino@IRIworldwide.com to learn more about how cross-channel measurement can help improve your campaign results.