The consumer packaged goods (CPG) industry is meeting a generation of consumers who interact in new ways with established brands. They view ads, research products and shop differently than ever before.
Connecting with these consumers successfully means leveraging digital, data and devices. Digital advertising is changing the way CPG brands market their products.
These companies know it’s important to reach consumers through online ads, but since they sell through retailers instead of directly to their consumers, it can be hard for them to make the best use of this channel.
Because of the retailer intermediary, CPG manufacturers often do not have direct access to the consumer they want to reach, or insight into how their advertising affects sales.
This lack of transparency and high uncertainty in the digital advertising ecosystem has created tremendous inefficiency for advertisers, which ultimately means waste. Those at most risk are advertisers with the least data about their customers, a situation many CPG marketers know all too well.
Putting Your Money Where Your Consumer Is
At the 2019 Attribution Accelerator in New York City, Nielsen and Johnson & Johnson attribution leaders showed CPG brands how they can address this issue. Dena Feiger, VP, Multi-Touch Attribution at Nielsen, and Stefan Jager, Advanced Analytics - Agile ROI at Johnson & Johnson, shared findings that reveal how CPG brands can improve their advertising and achieve better results.
Two critical issues that advertisers need to determine in executing their online advertising are 1) which audiences to target and 2) what sources of data to use to reach those audiences. There is a wide range of data sources available to define and identify audiences, which all come with different costs and are based on varying audience criteria.
How Audience-Based Targeting Drives Higher ROI
The session, Put Your Money Where Your Consumer Is: How Audience-Based Targeting Drives Higher ROI, included results from an analysis of 750 digital advertising campaigns for over 30 CPG brands totaling $258M in online spend.
- Why the type of data you use to target audiences matters
- What type of data you should leverage to maximize ROI
- How to utilize granular insights from MTA models
- Recommendations for marketers for improving performance
Here are some of the findings from their presentation. To learn more, you can view the entire session on-demand here.
1. Audience Data Type Is a Major Driver of ROI
Nielsen found that the type of data an advertiser uses for targeting consumers (e.g. first party, geographic, behavioral, etc.) has a significant impact on ROI.
2. Purchase-Based Data Performs Best
Targeting based on “Purchase-Based Audiences” (for example, “people who bought from my competitor in the past 3 months”) delivered the highest return on investment, 3x above the average across all types.
3. Deterministic Data Drives 2x ROI of Implied Data
Audience targeting based on defined actions (purchase for example) increases ROI by as much as 2x versus targeting based on implied actions (visiting a website).
4. Broad-Based Targeting Achieves Lower ROI
Targeting based on general reach-based tactics (for example, geographic, demographic, and contextual) delivered very low returns on investment; only 20% of the average ROI across all types of targeting.
5. Centralized Data Outperforms Silos
Companies that break down data silos and centralize their data achieve better results. CPG advertising enabled by a data management platform (DMP) outperformed Non-DMP activation by 3 to 4 times based on ROI.
Put Your Money Where Your Consumers Are
Consumers move seamlessly between online and offline. Yet many CPG marketers struggle to understand how online activity translates into in-store sales. Without the ability to bridge the gap between the digital and physical world, it’s impossible to optimize your marketing and advertising tactics to drive the greatest returns or effectively manage the total consumer experience.
"A lot of media in this channel is wasted. The big problem is that we have historically used a shotgun approach. We put a lot of media out there and most of it is delivered to people who have absolutely no inclination to buy the product," said Stefan Jager, Advanced Analytics - Agile ROI at Johnson & Johnson. “Now we have the ability to target in such a way that the media gets delivered to people who are actually interested in it.”
Digital advertising can be an extremely effective and efficient way to advertise for CPG brands. The Nielsen meta-analysis of over 30 multi-touch attribution studies revealed that brands achieve better outcomes when they leverage enriched audience data creatively.
CPG marketers need the ability to combine the profile data they have about their customers and prospects (who they are, what they are like, what they want and where they are), with marketing performance data (experience: creative, offer, image, call-to-action, return on ad spend, cost per acquisition, frequency, etc.) to provide a consolidated view of the consumer and every marketing interaction leading up to a sale.
When you combine the power of audience with multi-touch attribution, you can then understand consumer attributes and how different audiences interact with your brand across channels and devices. And you can optimize budgets and create the types of relevant and personalized experiences to drive meaningful business results.
"It is really critical that we use both MTA and MMA to backup and analyze our data. I don't think many companies are able to break out the targeting in such great detail and have the reliability around that to draw these conclusions as Nielsen is. So kudos to the methodology that Nielsen uses,” added Jager.
Download a copy of our report: Put Your Money Where Your Consumer Is: How Audience-Based Targeting Drives Higher ROI
Watch our 2019 Attribution Accelerator presentation on-demand now: Put Your Money Where Your Consumer Is.
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