CPG Players Serve Up Digital Media at the Bleeding Edge

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The digital revolution has behaved more like a slow-gathering tidal wave.  The first ripples looked every bit like the typical low tide that washes gently ashore.  But at some point, one of them gathered momentum and size and turned into a tsunami that has wrought disruption upon our industry.  Those who anticipated and prepared made it safely to high ground.  But then there are those who have been slower to see the depth and power of the coming impact and remained still, only to have the huge wave come crashing to shore.

The Consumer Packaged Goods vertical is one sector of the marketing ecosystem that could be fairly characterized as being behind the curve when the digital revolution took hold. But like everyone else, they inevitably were faced with the imperative of change and modernization.  The marketplace encroachment of digital native brands who have infringed upon traditional brands’ market shares and equities, has been a major catalyst in CPG’s ongoing transformation.  CPGs have embraced reinvention with rethinking their media strategies. At the heart of it, has been the ascendance of the mobile platform as the primary consumer channel that has led to fundamental reallocations of budgets from the broad-reach emphasis of linear TV to the precision and efficiency of mobile ads.  They are also increasingly embracing seismic advances like the newly emerging ability to bridge online advertising with store-level purchase data.

For those of you CPG brands who are still clinging to the old, established ways, you need no longer be condemned to the stagnant formula of huge volume with small margins, which speaks to the relative lack of efficiency and accountability with traditional media plans.  The first and vital step in adapting to the new paradigm of digital and maximizing return-on-ad-spend lies in redefining how you measure success.

New Key Performance Indicators

The old school blunt force approach of throwing huge sums of dollars with GRPs and impressions at scale accompanied by sizable shelf space at retail leading to greater sales volume was the conventional wisdom.  CPGs like most advertisers accepted that there was no small amount of waste, which was shrugged off as the opportunity cost of doing business.

That can no longer be acceptable when digital advertising marked by the ability to personalize using a wide range of digital consumer signals including location data technology can now be harvested into actionable insights that inform recalibrated campaigns that are more aligned with engagement than exposure.  And by engagement, I mean matching transactions with Unique Device IDs can now properly measure metrics like incremental store visits, achieving the holy grail of bridging online messaging to offline consumer behavior in the form of true ROI.  Yes, we are finally able to perform store segmentation by separating those stores impacted by the mobile campaign vis-à-vis those stores not impacted from a sales perspective.

At the center of these advancements is the ever-increasing accuracy of location technology.  One of the persistent criticisms of digital advertising had to do with the limit in reach as the early generation location technologies didn’t help reach scale due to its erratic accuracy.  Now, as we reach the end of the decade, location technology has matured leaps and bounds and now plays a key role in extending digital advertising reach in a meaningful way.

We can now apply location technology in a way that allows us to achieve greater precision along with the scale.  We can now better understand the context of where and when to engage the consumer within his or her particular journey.  We can now better customize the campaign creative components in real-time based on data points that allow us to sculpt more personalized and relevant mobile ads.   These can be measured and optimized in real-time and more directly tied to footfall and store visits.  They can identify users that best engage with the brand, and reactivate them to drive traffic to retailers. Doing so, they create a new asset (close to a CRM approach), and they can enhance their relationships with retailers.

Communities often face adversity, followed by serious soul-searching and change, which then leads to reinvention and success.  CPG has weathered the digital transformation storm and now is time for these companies to thrive at the next level.

Stan Coignard

S4M, CEO at Americas
Stan Coignard

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