By Jennifer Pelino EVP of Global Media Solutions, IRI
Leadership teams of CPG companies continue to operate in an environment of increasing and significant uncertainty. One of the biggest challenges they face right now is the inability to accurately predict just how high inflation will go or how long our current inflationary environment will last. This creates significant ongoing uncertainty around future input costs, consumer prices and related shifts in consumer demand, and changes in labor costs.
Additionally, supply chain issues have been exacerbated even further by the current environment of geopolitical instability, with some CPGs questioning whether to slow their investments in conflict-torn markets or even to exit them altogether. The looming threat of a recession provides yet another element of unpredictability.
Expected Manufacturer Responses — and the Impact on Media Campaigns
In response to these challenges and ongoing uncertainties, we expect advertisers will continue to look for ways to maximize their media investments. Per new Advertiser Perceptions data, one in five marketers has already cut their spending, and budgets have decreased by an average of 16%.
Many marketers are cutting back on expensive upper-funnel operations that are crucial to creating brands. That dampening has affected CTV (connected TV) and digital television, which had previously benefited from the pandemic-driven trend toward streaming and social media.
In these inflationary times, every dollar being spent in media needs to work harder. For consumer products where habitual behavior drives buying decisions, understanding what consumers have previously purchased is the undisputed best predictor of their future behavior.
How Marketers Can Effectively Respond
You need data that helps you understand all the different dynamics at play and what to do next to maximize your campaign effectiveness with consumers. At IRI, we have sales data from all the top retailers from their loyalty cards, including Kroger and Walgreens exclusively. This passively collected data allows us to know for certain what consumers are purchasing, their lifestyles and what economic factors will contribute to their next purchase. In fact, we can understand this from almost everyone in the U.S. due to having the largest loyalty card data set in this space (covering 93% of U.S. households). Using this data to target the right consumers in your consideration set yields more effective and efficient advertising results — up to four times improved results and, when you combine it with our optimization efforts, you can see up to nine times better lift.
Our tools can help you get a better return on your advertising spend and measure your results more effectively so you can justify your budgets and continually enhance your media performance over time. These tools include:
- DaaS (Data as a Service) Solutions – You can enrich your first-party data to gain insights, segment, profile and build audiences from IRI’s verified purchase data. Access to the data is driven through clean rooms — in collaboration with partners and platforms — so that PII (personally identifiable information) is anonymized, processed and stored in a privacy-compliant way.
- IRI Audiences – Use purchase-based data to create audiences based on consumers' propensity to purchase your products, so that you can maximize the targeting, relevance and sales impact of your investments — even on lower-cost media channels such as programmatic digital marketing. You can target as much of the addressable U.S. as desired, from most valuable to least valuable using a proven purchase-derived methodology. By accessing verified data at scale, you can reduce your media costs without sacrificing quality or marketing impact.
- IRI Optimization – Improve your in-flight campaigns to squeeze out as much return on advertising spend (ROAS) as possible. Our data programmatically helps you optimize your campaign tactics, improve budget allocations and maximize ROAS. IRI is uniquely positioned to help clients find incremental reach due to the depth and breadth of our data coverage.
In these uncertain times, it is more important than ever to target key audiences effectively and measure those results accurately. Using the right tools, marketers can turn this immense challenge in the current market into a big opportunity. You will be able to reinforce the value of marketing and better support your organization’s success by strategically investing in the audiences and channels where those important yet sometimes limited dollars will have the greatest sales impact.
To learn more about how IRI’s solutions can help improve your media planning, targeting, measurement and optimization, read about our media solutions, reach out to your IRI representative or contact IRIMedia@IRIworldwide.com.