Need to Shift Your CPG Strategy? 3 Ways to Maximize CPG ROI
What do you do now? If you’re a brand marketer for a consumer-packaged goods (CPG) company, it’s hard to imagine your digital marketing strategy didn’t radically change this year. If you’ve already cut your advertising spend, you’re not alone, according to a new survey aimed at understanding how marketing and advertising are changing due to the current pandemic.
A recent eMarketer report showed COVID-19 significantly impacted digital advertising, with a substantial decline in spend across all channels ranging from 25 percent in paid search up to a 35 percent reduction in digital audio.
Additionally, eMarketer and Adomik found major changes in programmatic ad revenue and CPM (cost-per-thousand impressions) by target device. Ad revenue and CPM declined across all devices with the exception of connected TV, which experienced a 8.6 percent increase in revenue, most likely due to people sequestered at home.
In all likelihood, the pace of change will not relent going forward. In fact, the recent boycott of many social media platforms is yet another example of how quickly the market can turn.
3 Crucial Strategic Marketing Initiatives to Take NOW
The question is not will marketing conditions continue to be volatile and dynamic but rather what is your response? Some marketers are using martech to get a boost in their efforts to keep up with new conditions and shifting customer needs. In particular, many CPG brands are turning to Customer Data Platforms (CDPs) to explore and execute three critical initiatives during uncertain times.
- Intelligently reallocate digital ad spend to reach consumers at the right time with the right message
- Leverage existing martech by integrating data from those sources via an enterprise, off-the-shelf CDP
- Execute direct-to-consumer (DTC) strategies to retain control of your message and gain direct relationships with your end consumers
Why a CDP? Because a CDP with customer analytics can give you the data and insights you need—in near real-time—to keep up with changes in demand and customer behavior.
Reallocate Digital Ad Spend
During a global crisis or economic downturn, many companies pause ad spend to conserve cash. Yet a lesson learned from the COVID crisis is that consumers don’t want companies to stop engaging. Only 8 percent of consumers thought brands should cease advertising during the crisis.
But clearly the allocation of that spend might need to change; and change rapidly. You need to know if and how your customers are responding to your ads before you can even begin to change your strategy and ad spend. A CDP allows you to analyze and understand the most profitable channels and segments, to ensure the most efficient and effective reallocation of budgets.
For example, Subaru initially turned to a CDP to segment audiences, target those most likely to buy soon, and personalize each customer journey to improve the odds of making a sale. One of the most intriguing insights they gleaned was just how many of their customers were crazy about their dogs, and ads that acknowledged that element of their lifestyle had much greater impact.
But that was just the start, and now the auto manufacturer uses post-purchase customer data and predictive analytics to design new products and services that bring in revenue and build customer loyalty. How would that work? Well, if you’ve ever tried to get a big dog or a pet carrier through a car door, you know that a little design consideration goes a long way to making a trip with mankind’s best friend easier and more inviting. Designers at Subaru now take that into account in new models.
Leverage Existing Martech
Not only are consumer perceptions of digital advertising and social media providers changing quickly, but the landscape of marketing technology continues to evolve. New entrants into the martech space appear constantly, often providing new data sources or new avenues for marketing activation. Managing integrations with these technologies can be very time consuming and costly. Scarce and valuable IT resources are often unavailable to assist with the integration work required to fully leverage the value of these martech investments.
At Kirin, disconnected data sources meant the beverage company struggled to visualize and understand its consumers. Kirin deployed a CDP to collect and analyze campaign data across digital channels, as well as sales events, and storefront activities. The effort to leverage data from across all sources resulted in better understanding of customer behavior and habits—as well as the impact of weather-related marketing—and increased sales significantly. But getting data from a variety of sources and feeds, in enough time to send a notification that there’s cold beer just up ahead at the local sports bar, places big demands on integration.
Execute DTC Strategies
CPG companies are beginning to execute on DTC strategies, and the COVID pandemic has accelerated these efforts. Many barriers that previously existed—such as setting up a commerce site, cart and payment, and fulfillment—have been removed through cloud-based service providers. Much of the “heavy lifting” for DTC can now be outsourced and delivered quickly.
Being able to create a profitable sales channel is just one benefit of a DTC strategy. For CPG companies, the ability to develop unimpeded relationships with consumers is the more important opportunity presented by DTC.
A DTC site provides a bi-directional exchange of data with the consumer—the consumer receives personalized engagement and offers while the CPG manufacturer receives highly valuable first-party data. This also gives CPG companies an opportunity to manage the security and usage of consumer data, which, when handled with care, can increase consumer trust and loyalty.
“At AB InBev, we take a global approach to direct-to-consumer marketing and need to ensure that we are not duplicating marketing efforts across our many brands. The Treasure Data CDP has enabled us to securely unify our customer data and build complete profiles,” said Lucas Borges, senior manager, Consumer Data Strategy at AB InBev.
To capture the value inherent in this information exchange a CDP is required. The CDP collects, unifies, and then analyzes the data to provide the most relevant and efficient way to engage with consumers.
“We’re able to apply all of our learnings, including from machine learning or data generated from our algorithms, to understand a little more about our consumers,” Borges said. “And then, once we find something that’s interesting to us, we can implement and scale it very fast within the business, having all this data in a single place.”
Embracing Changes in Consumer Needs with a CDP
As CPG brands embrace the relentlessly changing market, a CDP can provide a competitive footing. The versatility of a CDP allows companies to spend ad dollars effectively, leverage existing data sources and martech, and even explore a new business model with DTC. Most importantly, Treasure Data CDP empowers companies by delivering rich consumer insights that drive outstanding consumer experiences and personalization.
So are you a data-driven marketer who’s wondering “What next?” We’ve created a comprehensive series that tackles four key areas marketers should focus on to improve efficiency and deliver better consumer experiences: Identity Resolution, Multi-touch Attribution, Predictive Analytics, and Data Enrichment. Check out the entire series here.