By Deirdre McFarland, SVP of Marketing, NCSolutions
It has not been an easy couple of years for us all. As marketers, we are at times overwhelmed by challenges, under pressure to deliver results and dealing with rapidly changing consumer preferences and lasting effects of the COVID-19 pandemic.
We are facing the demise of cookies and potential privacy legislation, unpredictable consumer brand loyalty and the proliferation of potential ways to reach audiences. And while this disruption may lead to uncertainty about which strategies to pursue, our recent study found forward-thinking marketers can excel by embracing data insights and leaning more into performance marketing.
We surveyed several consumer packaged goods (CPG) marketers in Fall 2021 to get their point of view on a couple of key topics. What did we find? Marketers were generally positive, despite the challenges, and excited about their opportunities to make a mark.
Some good news: CPG media budgets are increasing (55% said they received an increase in 2022, 24% of which reported an increase of over 10%). Here is what is top of mind for CPG marketers as they try to maximize their spend.
1. All about maximizing the Benjamins:
Demand for campaign measurement is very high from CPG marketers, especially the need to know if ad campaigns are generating a sales lift. CPG marketers prioritize lower-funnel metrics such as return on advertising spend (ROAS) and purchase-based outcomes, over other well-known methods like clicks, brand lift and sales intent. In fact, 67% say that ROAS is the most important KPI. In addition, the ongoing debate over privacy changes, spearheaded by Google and Apple, means that more than half of those surveyed are putting a greater emphasis on ROAS.
When brands were asked which key performance indicator (KPI) was the most important, they resoundingly chose return on ad spend (ROAS), with two-thirds (67%) indicating that this was their most important metric. Other KPIs included reach of targeted audience (16%), purchase intent (10%) and clicks/online engagements (7%).
2. They’re turning on addressable media:
As CPG marketers feel additional pressure to demonstrate ROI, they are less interested in linear TV and becoming more enthusiastic about addressable media. The main beneficiaries are connected TV (CTV), where 71% expect to increase spending, and social media, a 59% increase.
3.Clean rooms, not just for semiconductors:
Clean rooms are the new trend in advertising, otherwise known as customer data platforms, where marketers combine first, second or third party data with other data sets to gain insights while keeping privacy controls. 79% of respondents have already evaluated or plan to evaluate a clean room technology in the next twelve months. The primary reason? Almost six in ten said it was because they wanted more control over their data.
Most said it was because they wanted more control over their data (58%) or to support their first-party data strategy (53%). Forty-nine percent said that it was easier to aggregate data from different sources, while 45% cited privacy reasons. This would seem to back up the notion that brands are paying more attention to first-party data and how it is used and to the privacy concerns that are receiving greater visibility.
We’re very much in the early stages of evaluating clean rooms at this time. I think there is future potential for us to invest in clean rooms, but like many CPG brands, we need to better develop our first-party data.” Brett Richardson, Senior Media Manager, Chobani
While CPG marketers have challenges in the months and years ahead, opportunities abound. Advances in technology will help marketers identify the right audience, even as cookies disappear and privacy legislation continues. The CPG space will be A-Okay ongoing with the right strategy.