By Stan Turek, general manager of measurement In Market
Today, all brands and retailers are dealing with fragmented consumer journeys and the rapidly evolving media landscape. The consumer packaged product (CPG) industry is no exception.
Because CPG brands operate in highly competitive situations, marketers need to implement the right infrastructure to measure the overall impact of advertising campaigns at both individual retailers and channels.
A fragmented future from shopping to media
The era of one-stop shopping is gone. As inflation continues to rise and looming tariffs present a possibility of additional price increases, consumers continue to adjust their shopping patterns to seek better value. This includes finding the best deals of essential and discretionary items to travel to multiple retailers, and trading from name brands in the face of record high food prices in almost every category.
The average buyer doesn’t get weekly groceries from just one store like Walmart, but instead visits numerous retail channels, including warehouse clubs, discount grocery stores and dollar stores, and gets the best value for their spending. especially, In Market Index It was found that a single retailer consists of less than 0.5% of shoppers’ total retail visits. Shoppers are also trading down to smaller, regional or private label brands to reduce costs. Intermarket research We also found that consumers increasingly chose private label products in categories with limited distinctions such as bottled water, frozen vegetables, chicken, eggs and cheese.
It’s not just that consumer buying patterns are becoming increasingly fragmented. The same goes for media consumption. With the advent of new social media, search patterns and streaming services, shoppers are consuming media and are exposed to more and more advertising across more channels.
What do these challenges mean to marketers?
First, marketers need to consistently reach customers through the purchasing process leading up to the next actual purchase, ensuring that the brand stands out and stays at heart. Most importantly, it is essential to adopt a measurement infrastructure that explains this increase in fragmentation in both consumer shopping patterns and media consumption. This allows marketers to better evaluate and optimize their campaigns with an understanding of the overall impact of the campaign and receive detailed insights into the channel and performance between individual retailers.
So how can CPG brands succeed in the market?
Below are three important essential DOS for converting items that simply check the CPG measurement approach to a brand’s revenue growth engine.
1. Focus on IROAS and incremental sales: Key indicators for CPG measurement
It’s not just about providing increased value to consumers. It is essential that marketers are responsible for all advertising dollars and show the impact on revenue and business growth across all campaigns.
To do this, in terms of key performance indicators (KPIs), incremental returns (IROAS) and incremental sales should be the marketer’s guide lights.
IROAS has emerged as one of the most important indicators for measuring success for good reason. It provides insight into the effectiveness of the campaign and its impact on revenue without clouding the ratings with sales that would have happened anyway. The same goes for incremental sales. Not only will these metrics help you better analyze effectiveness, they will also allow marketers to dive deeper and analyze what is contributing to growth.
These metrics unlock new opportunities for optimization and provide marketers with the ability to act on actionable insights and learning, and maximize impact accordingly.
2. Eliminate potentially expensive blind spots with CPG measurements
Increased fragmentation can create blind spots for new measurements. As shoppers frequently visit more stores and consume media on more channels and screens, marketers need birds’ visual field to understand the overall impact of their campaigns and their ability to dig deeper and gain insights.
For example, let’s say a CPG brand launches a new flavor of a top-performing snack product. It is important to measure performance across channels such as CTV, non-digital mobile, and retail media networks. However, retailer measurements of performance help marketers better understand consumer behavior and preferences in value-driven markets, including potential factors by retailers that may have influenced prices, promotions and placement. Are shoppers increasingly happy to promote discounts on retailers’ new products, or highlight new flavors in in-store promotional arrangements? Are you watching spikes at discount retailers where shoppers can try out their products at a lower cost? Will the new flavor help you regain incremental money at retailers that previously lost their share with private label brands?
In addition to highlighting the value of CPG advertisers, these insights involving sales lifts by retailers can also provide an overall view of sales from individual retailers, such as reports provided by the retail media network. This complete image of the sales lift allows us to thoroughly report on the impact on advertising in the face of today’s increasingly fragmented shopping environment.
3. Go from “Set and Forget” to “Sense and Response.”
The old “set it and forget it” idea of watching an ad campaign run without active monitoring or optimization is no longer an option. In a rapidly evolving value-driven environment, maximizing the impact on today’s CPG campaigns relies on real-time measurement and agility to meet evolving market conditions and consumer needs. The ability to adjust strategies based on performance reduces media waste and promotes incremental sales lifts and IROAS on campaign flights that involve real-time shifts in creative, offers, media placement and more. When brands are dealing with increased costs, reduced margins, potentially sales, all advertising dollars are optimized to ensure that no dollars are left on the table (or shelves).
Without insights on board to enable marketers to optimize campaign performance, CPG brands risk wasting millions of dollars a year on low-performing ads. As the economy continues to tense and marketers are under pressure to prove their return on investment, brands that prioritize data-based decision-making, closed-loop measurement and real-time optimization will be at the top by attracting more shoppers, lifting incremental sales and maximizing media investment.
Stan Turek is the general manager In MarketA measurement business that brings over 20 years of experience in media measurement, data-driven marketing and product innovation. Previously, STAN has played leadership roles in Fortune 50 companies and high-growth organizations, including Pepsico, Molecules and Catalina Marketing, focusing on advanced analytics, innovation and retail strategies.
