Download why cpg marketers need to embrace digital shopper

WHY CPG MARKETERS NEED TO
EMBRACE DIGITAL SHOPPER MARKETING
A look under the hood at three CPG brands
Executive Summary
MediaMath has deep-rooted relationships with Consumer Packaged Goods
(CPG) marketers and expert knowledge of what CPG brands are doing in
digital, particularly with regard to programmatic and the use of data. But
many brands have yet to realize the full potential that data collection and
programmatic campaigns can bring to their shopper marketing efforts. We
set out to explore questions regarding digital shopper marketing and share
strategies for optimum success.
∙∙ What are the challenges marketers currently face internally and externally
∙∙
∙∙
with regard to data automation and shopper marketing?
What has worked and what hasn’t worked?
What plans do marketers have for shopper marketing in 2014 and
beyond?
As a blueprint for the different types and levels of digital sophistication,
MediaMath interviewed three executive-level digital marketers from different
CPG brands. These interviews captured their thoughts around techniques
and strategies for this market in particular and provide:
∙∙ A candid overview of digital efforts that they have implemented to date
∙∙
∙∙
∙∙
A window into the challenges they are facing in 2014
Tangible examples of successes and failures of shopper marketing
strategies
Future opportunities in shopper marketing solutions
SHOPPER MARKETING
“Shopper marketing is based
on a deep understanding of
shopper behavior and designed
to build brand equity, engage
the shopper, and lead him/her to
make a purchase. The premise
behind shopper marketing is
that manufacturers and retailers
can together create a more
engaging shopper experience,
influencing shoppers at the point
of purchase where they make
final buying decisions. Shopper
marketing is about using insights
and specifically targeting the
core shopper with the right
environment, the right products,
the right packaging, the right
prices, and the right marketing
communication — all combined
to satisfy the shopper in a
way that was not traditionally
possible.”
“Delivering the Promise of
Shopper Marketing”
Deloitte.
What we found was that some CPG marketers are spearheading their
organizations’ – and the industry’s – adoption of automated methods
for purchasing online advertising inventory and are integrating available
consumer data to make this technique, also known as programmatic media
buying, more effective. Other CPG marketers, however, are still eyeing it
suspiciously and relying on more traditional, tried-and-true strategies.
Insights and Findings
Based on the interviews that we conducted, there is significant room for
digital shopper marketing to emerge as a larger marketing segment, but
full-service ad tech adoption remains in a nascent stage. We uncovered
examples of CPG brands’ experimentation with a range of tactics from
social media to online couponing, but leveraging the immense amount of
data available to them through formal programmatic trading has only just
begun. CPG marketers also face the challenge of minimal brand loyalty on
low consideration products and competition posed by a greater number of
choices available to consumers.
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There are, however, tremendous opportunities for CPG brands to
engage consumers with programmatic in a targeted and scalable way,
and to drive shoppers into the store to purchase specific products.
CPG marketers informed us about obstacles related to measurement due
largely to the challenge of converging online and offline data, limited access
to sales-based first-party data, and the need for a consistent set of metrics
across channels because of an historic reliance on TV as a primary media
source. In one subject’s experience, waiting for offline retailer campaign
results can often take six months or more. Another marketer was able to
share that programmatic campaigns were driving ROI, but he wasn’t able
to ascertain more detailed results, simply because he didn’t have his hands
on all of the necessary data. So, how can CPG marketers overcome these
constraints and take control of their own data?
FIRST MOMENT OF TRUTH
tinyurl.com/on6wfea
ZERO MOMENT OF TRUTH
tinyurl.com/p4bcvfq
LEARN MORE
Learn more about the evolution
of CPG Marketing from “Soap
Operas to ZMOT: The Evolution
of CPG Marketing”
tinyurl.com/kxojfom
The CPG marketers interviewed found retail partners their most formidable
obstacle. The goal of retailers is to drive sales in a particular category, but
they are often perceived as more or less indifferent to the needs of any
specific brand. CPG marketers are on their own when it comes to driving
sales for their products in any retail store. Additionally, marketers relate that
some retailers tend to be set in their ways with respect to shopper marketing
and may be unwilling to experiment with new tactics.
History
The digital age has changed the game for CPGs, making the consumer
consideration phase shorter and more competitive. Only by harnessing
consumer data and making it actionable through advanced algorithms and
technologies can those brands score against the competition.
Brands like Ivory and Palmolive were once able to reliably reach and influence
their audiences during breaks in daytime soap operas. Over the years,
that focus shifted to newspaper inserts and coupons in demographically
appropriate print publications, which became a key tactic alongside in-store
visibility where eye-level shelf space and end-cap displays have always been
critical to CPGs (later replaced by their digital equivalent: the landing page).
In 2005, Proctor and Gamble began promoting what it called the “First
Moment of Truth,” the theory that shoppers make up their minds about a
product in 3-7 seconds — about the same amount of time it takes to note a
product on a store shelf. Google took the ball 50 yards farther in 2010 with its
“Zero Moment of Truth,” or ZMOT, which states that while this first moment
of truth is still important, the rise of full Internet adoption leads to many
brand interactions before the consumer ever sees a product on a shelf.
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In the era of Big Data, CPG marketers have more intelligence and insight
at their fingertips than ever before. CPG marketers can harness the power
of programmatic media buying to make that data work for them to win the
ZMOT.
Opportunities in Shopper Marketing
Shopper marketing has evolved dramatically in recent years. With audience
behavior changing rapidly as internet use, tablets, and mobile proliferate,
CPGs can’t wait any longer to leverage digital and the wealth of consumer
data it brings to find their targets and reach them at work, play, and across
all devices and channels.
As data becomes a bigger factor in all aspects of marketing, shopper
marketers are looking for new ways to gain insights into why consumers buy
certain products. To quote Shopper Marketing 5.0, published by Booz and
the GMA:
“
As marketers increasingly come to understand that consumer behavior
is not always a predictor of shopping behavior, they are becoming more
focused on what drives shopper choice, both in online and physical stores.
And as retailers themselves come to understand that their wealth of
transaction data (what people bought) doesn’t give them true insights into
why shoppers behave the way they do, retail merchandising and marketing
leaders are questioning everything: store layout, navigation, promotional
displays, packaging, associate training, and more.”
LEARN MORE
Learn more about “Why
Shopper Insights Mean Much,
Much More than Consumer
Trends”
tinyurl.com/q7feaum
LEARN MORE
Learn more why brands and
publishers are investing in
programmatic. “Brands and
premium publishers get
on the programmatic ad
bandwagon”
tinyurl.com/pcrwucz
Shopper marketing today not only focuses on driving sales, but on
understanding what drives shoppers to the store and what other items they
might buy. It also, out of necessity, focuses on the many touch points a
consumer will encounter along his or her path to purchase, both online and
offline.
While giants like Coca-Cola rely on a strategic, not just a tactical approach
to data for shopper insights, encompassing multi-channel retail data and
customer profile data, they’re in the minority.
According to a GMA and Deloitte study:
∙∙
Only 36% of CPG marketers regularly collect this kind of data, compared
with 75% who leverage more general consumer research.
If leading CPG marketers know that these deep shopper insights are driving
growth for industry leaders, why aren’t the rest following suit? The simple
answer is that it seems like a lot of work. There’s an overwhelming amount of
data, and it can appear hard to collect and parse — and harder still to glean
actionable insights. There’s also a perception that processing all that data
will be costly. But, that doesn’t mean it shouldn’t be done, and it’s critical to
success in an increasingly competitive market.
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With the right partners and technology in place, collecting shopper data and
putting it to good use doesn’t have to be difficult or expensive, and it can
produce exactly the insight CPG marketers need to drive effective shopper
marketing strategies. A recent gathering of top CPG brands at the Consumer
Analyst Group of New York validated the rapidly growing role that digital and
online consumer data now plays in their marketing strategies, in some cases
overshadowing budget allocations to print and TV. With digital budgets
comprising less than 10% of overall marketing budgets just a few years ago,
CPG giants such as Procter & Gamble, L’Oreal, General Mills, and Clorox Co.
are now actively allocating higher budget percentages to digital based on a
stronger return on investment in comparison to other media.
WHY DIGITAL GRABS
CONSUMER PRODUCT
BUDGETS
tinyurl.com/o57n5gc
The “Inside Scoop” With CPG Marketers
“
The path to purchase is not a straight line, and neither is it a circle as
some have described it. It is more like a pool or a puddle.”
-- Sonja Mathews, PepsiCo
CPG MARKETER NO. 1
Marketer No.1 is among the most sophisticated that we have encountered in the CPG space. An early
adopter of programmatic trading, this senior CPG marketer is considering ways to reach consumers with
relevant messages all along the customer journey. His forward-thinking approach to data-driven marketing
leaves him wondering about the fine line between consumer and shopper from a data perspective. (When
collecting data for insight to guide marketing strategies, these two groups are perceived as different.) His
challenges center on acquiescing to retailer requests and the timely receipt of campaign results.
Creating a Digital Center of Excellence
When Marketer No. 1 walked into his new role to lead digital marketing for North America at a multinational food manufacturing company, he made a big assumption about big box retail stores - that they
have one goal: driving foot traffic. “There is a tension point, which I knew, between the manufacturer and
the retailer. The manufacturer wants the consumer to buy more products, and the retailer couldn’t care less
if they sold one more box of our product. They just care about getting more people into their store.”
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Determined to prove that digital can translate to foot traffic in stores, while also meeting brand marketing
objectives, he created a center of excellence - bringing digital marketing, creative, social, any sort of paid
media -- the whole gamut -- together. Confident in the value of programmatic technology, he organized his
teams to activate it efficiently.
Programmatic and CPG
The key to programmatic success, according to Marketer No. 1, is layering data over media to inform
buying decisions, placement, and creative to deliver a truly unique offering to a retailer. “This shows the
retailer that we are are utilizing the appropriate resources and implementing throughful strategies to drive
valuable consumers into retailers’ stores” he said.
For example, by combining online and offline data and leveraging information such as geographical
location, loyalty card status and more, CPG marketers are better armed to deliver the right message at the
right time to the right person. This is the cornerstone to success in programmatic media buying. What’s
more, by layering behaviorial data into your buy, you can also change creative elements to ensure your
message has a better chance of resonating with the consumer.
A Tool Set for Measuring Success
Achieving a true closed-loop system which measures the consumers’ entire path to purchase, while also
considering cross-channel activity is the holy grail for the marketer. “When we go where the consumer
is, our ROI is very strong. With the right balance of different media - TV, online, print - that’s when we’ve
found the most success. We need to understand how those channels work together - and in real time - in
order for us to take advantage of what programmatic really enables and delivers.”
Getting Serious About Online Shopper Marketing
This CPG marketer believes the industry needs to get serious about moving beyond price promotions to
really show value and entice the consumer to try new products and become loyal customers.
“Too often what we see today in shopper marketing is ‘how do we do a buy-one-get-one-free’, or ‘how
do we do a coupon or give something away?’ While these tactics are effective ways to move the needle in
the short-term, it’s not a sustainable model. CPG really needs to step back and think where and how it can
deliver true value to the shopper and drive long term brand loyalty.”
OPPORTUNITIES
This CPG is ahead of the pack in terms of programmatic marketing implementation. They’re setting an
example from which other brands can learn. Programmatic can help CPG brands target better, reach
their audiences at scale, enable closed loop attribution, and make their advertising more efficient overall.
Of paramount importance is the consideration of the consumer over the retailer. What’s the best way to
reach our target shopper with the right message, at the right time, and on the right device?
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CPG MARKETER NO. 2
CPG Marketer No.2 runs digital marketing for one of America’s largest packaged foods companies. He
works within a significantly larger team and budget than Marketer No. 1. He is passionate about his work
and his industry, and he’s an incredibly sophisticated digital marketer. His challenges are related to budget,
silos, and limitations set by retail partners. He is frustrated by these impediments but remains creative and
excited about what’s ahead.
The Retailer Ecosystem: Challenges and Opportunities
This CPG marketer’s organization uses digital media extensively, including programmatic technologies. The
marketing organization, however, is divided. One group focuses on driving brand awareness, while the other
is tasked with running shopper marketing efforts in collaboration with retailers. Although the teams are solid,
there are certain tools that are used by both groups which inherently breeds a lack of efficiency.
“The vendor we use for media is driven by the ecosystem of the retailer, but we use online display media that
is co-branded to include both our brands as well as our retailer partners’ to drive people into stores. Targeting
is varied depending on the retailer. You also have two base scenarios: One where we are advertising on the
retailer’s website, and in that case it tends to be a fairly rigid approach, and one in which we’re going out into
the marketplace and using other providers to buy media that’s not on the retailer’s website to drive people in.”
According to this marketer, strong collaboration is the way to achieve a win-win-win for the brand, the retailer
and the shopper. But there is no single way to achieve this because retailers have such different ecosystems
and a vast partner portfolio. Marketers must be prepared to adjust their go-to-market approach based on the
retailer, which can certainly pose a challenge.
“Look at a retailer like Walmart. They do not have a card loyalty system, and in fact, it wasn’t until recently
that they introduced print-at-home coupons. While allowing coupon activation on their website opened a
whole new area of exploration for the CPG marketers representing the brands on their site, there remains a
tremendous amount of online marketing opportunity for both the retailer and the brands. As retailers become
savvier about their online tactics, it gets easier to talk to them about how to execute, and how that links into
broader merchandising plans.”
Goals and Objectives
“Keeping the traditional funnel in mind, we must not neglect brand and product awareness before driving
shoppers into a store,” say Marketer No.2. “While the most important objective is absolutely sales, we
incorporate tactics that fuel sub-objectives and help move consumers through the funnel. The brain essentially
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is a big pattern-matching organ with memory storage sitting behind it, so it’s not just about using one tactic,
but weaving together multiple tactics across channels to allow the consumer’s brain to pick up that pattern
and store it.” This also commands a need for communication and data sharing between the brand marketing
group and the shopper marketing group.
Measurement Challenges
According to this marketer, measurement for CPG brands is always challenging because you don’t sell directly
to the consumer; you’re always dependent on someone else to supply the data. But with diligence, there are
methods to obtaining the necessary metrics which actually benefits all marketing strategies.
“We test and learn. We’re pretty good at the scientific method: create a hypothesis, put out an experiment to
disprove or prove the hypothesis, learn and evolve. At the end of the day, we’re more limited by capacity and
budget, but that’s true everywhere.”
OPPORTUNITIES
While this marketer is already well-versed in digital media, he recognizes there is a greater opportunity
to leverage programmatic to drive both awareness and sales. As is the case for many CPG marketers, the
retailers create a bit of a barrier between brand and consumers. He and his organization would benefit from
more access to data and insights to better understand and reach their audiences directly. Scalable, datadriven, top-of-funnel campaigns may be a smart move in the future.
CPG MARKETER NO. 3
This CPG marketer represents the food and beverage division of a major multinational conglomerate.
As with other CPGs, her products are primarily sold in supermarkets, convenience, and big-box stores,
however, products are also sold directly through a newly opened online store. This marketer is smart and
savvy, partnering with multiple digital agencies to manage display, social, and other channels. Relatively
new to digital, she and her organization have set out to leverage new and emerging tactics to maximize
their budgets and results. They’re creatively adopting new strategies and tools, including programmatic
media buying, with the lion’s share of the brand’s advertising budget earmarked for television.
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New to Digital
Marketer No. 3 recognizes they are in the infancy stage in terms of digital
marketing. Over the years, they’ve embraced social media and developed
an online store. This year, they refreshed their brand in an attempt to have
a more contemporary image, which included a greater investment in digital
marketing to accompany their primary TV budget.
IBOTTA
ibotta.com
Coupons and Offers
Like most organizations, Marketer No. 3 hoped to gain a better
understanding of their consumers’ online behavior and, in turn, target them
more effectively.
“We want to reach consumers with more intriguing and engaging information
about our brand. We’ve used digital couponong in the past to incentivize
shoppers to buy our products, however, this year, we’ve stepped it up a
notch in hopes to achieve more meaningful engagement.”
By partnering with Ibotta, a free mobile application provider that offers
couponing tied to geo-location targeting, we were able to give consumers a
new way to engage with our products while they shop. Ibotta pays its users
cash for learning about our favorite products on their phone or tablet before
they go shopping.
Leaning on Agency Partners
Unfamiliar with using programmatic technologies, this digital marketing
professional entrusts the heavy lifting of media buying to her agency. She
relies on them to buy the right media to reach the right shoppers at the right
time, as well as leverage features such as dynamic creative to optimize their
buys. “There are a a number of tools out there and we’re just starting to
learn about how they help us identify a target consumer based on certain
parameters. Our agency is continously educating us on how to maximize our
digital investment.”
Measuring Success
Ultimately, this marketer believes that measuring digital marketing success is
no different than any other type of targeted marketing and there are many
ways to measure the effectiveness of digital efforts. From an engagement
perspective, are consumer engaged with your brand? Are they clicking on
your digital ad? Are they taking the intended action from that ad?
This marketer is also conducting traditional studies with the Advertising
Specialty Institute to measure awareness. “By understanding the base level
of consumer awareness, purchase intent, and imagery perceptions, we are
able to track that intelligence over time.” They we’re able to marry the digital
metrics with their television metrics, and will be better positioned to execute
truly customer-centric marketing.
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OPPORTUNITIES
There’s a great opportunity for this marketer to leverage data, mesh it with the data she’s getting from
coupon sites and ibotta, and her own first-party data to target customers via programmatic. Targeting her
current prospects and look-alikes with local offers at scale could yield exactly the results she wants.
Key Takeaways for CPG Marketers
Because the shopper’s path-to-purchase is no longer direct, CPG
marketers should invest in digital shopper marketing. Internalizing the
lessons learned from consumer insights and shopper insights, marketers
should determine the best strategies for their efforts.
comSCORE
tinyurl.com/o7tb5dj
As technology continually evolves, it’s imperative for CPG marketers to
keep up — and remain focused on consumers. Multi- or omni-channel
programs are critical for staying on the radar of shoppers who toggle
between desktops, tablets, and smartphones. And while it’s still easy to
write mobile off as an experimental channel, mobile users are expected
to surpass desktop users in 2014, according to comScore. Shoppers are
on their mobile devices, and they expect the brands they love to be
there, too.
Data is the fuel that drives the most effective and efficient campaigns.
The “information explosion” has everyone buzzing about big data,
due largely in part to the fact that the development of programmatic
marketing channels has enabled marketers to handle data to their
greatest advantage.
This capability has been around for more than five years, but only now
are those at the forefront of our industry’s rapid evolution beginning to
use it wisely. Programmatic technology within a marketing operating
system allows for the combining of data and market insights, the
aggregation of that intelligence, and the ability to connect it with
advanced logic for making smarter decisions.
The need for a methodology to activate data by either mapping
audience profiles to contextual channels or leveraging third-party data
sets to target heavy buyers of their brand or competitive brands will
continue to grow as innovative brands embrace technology and data in a
way that improves and speeds up strategic decision-making. Ultimately,
these brands will recognize the need for a technology stack that includes
a marketing operating system to best leverage the data they already
have.
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About MediaMath
Based in New York with 12 locations across five continents, MediaMath develops digital marketing technology
and offers deep industry expertise, enabling marketers to connect with consumers individually and at scale
across the entirety of the world’s digital media. MediaMath’s TerminalOne Marketing Operating System™
enables marketers to customize their own technology infrastructure and leverage their data and industry
data in the planning, execution, optimization, and analysis of digital marketing programs, resulting in smarter
decisions that grow their business. Powering the operations for thousands of marketers, including those
representing 55% of the Fortune 100, TerminalOne enables its users to drive transformative business results
across the entire digital ecosystem.
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