It’s a strange time for consumer packaged goods (CPG) marketing.
On the one hand, budgets seem to be going up – significantly in some cases. In the UK, for instance, digital ad spend by CPG brands looks set to increase from £1.84bn in 2019 to some £3.52bn by 2023. In France, meanwhile, spending on display, search, and social media advertising grew by more than 20% between 2021 and 2022, topping out at some €8.2bn.
As positive as these developments may appear, though, they do come with some caveats. For some companies, rising marketing spend has seen those budgets actually begin to outstrip sales growth. Not only is that an unsustainable dynamic overall, it is one that is likely to place additional pressure on marketing teams – and that at a time when 80% of CEOs are already looking specifically at that function to drive their company’s growth.
Nonetheless, it's easy to see why so many CPGs are choosing to double down on marketing at the moment. Almost three-quarters (71%) of consumers around the world changed from their regular brands at least once during the past year according to one study, and loyalty towards products and labels alike appears to be waning sharply. In simple terms, that means that there’s business to be won and lost in equal measure.
This trend towards switching is unlikely to disappear any time soon, either. In the latest edition of dunnhumby’s own global research programme, the Consumer Pulse, we found that 60% of shoppers are now adopting “value-seeking” strategies when buying groceries, as opposed to “quality-seeking” ones. As inflationary pressure on grocery wallets continues to mount, this behaviour is only likely to become more common.
Mixing reach with relevance
This environment has two very clear implications for CPG marketers. Firstly, it means that any advertising they invest in needs to be as performant as possible. Whether it’s broadcast, digital, display, or anything else, it needs to deliver clear, tangible results that can be measured in terms of sales impact rather than engagements or interactions.
Secondly, that performance needs to stretch across the entirety of the marketing funnel. Even in brand marketing, where the focus on mass audiences means that it can be a little harder to prove the “true” impact of a campaign, pressure is growing to demonstrate a measurable contribution to the bottom line.
This is where retail media can play a key role, particularly in the area of media insights. That’s because insights can help brands to attain relevance, without compromising on reach.
Relevance is critically important right now. The right message, in the right place and at the right time, can help brands achieve cut-through with their customers. A relevant reminder – be that an ad, offer, or something else – can give shoppers a reason to stick with a brand even when there might be lower-cost alternatives available. Naturally, the reverse is also true, giving brands a way to entice shoppers into trying their own products.
Nudging shoppers isn’t the only thing that relevance helps with, though. Executed effectively, a relevant (and timely) campaign can also make for a much more efficient approach to marketing.
Effective across the whole of the funnel
A good example of this can be found in a campaign that we worked on with one major coffee brand. Using insights from one of our retail partners, we found that while online sales for the category had grown by 30% year-on-year, average purchase frequency for the brand had declined by 20% over the same period. Understandably, the brand was keen to reverse that trend.
By looking deeper into specific customer groups, we found some clear opportunities to do that. Around a fifth of shoppers, for example, were lapsed customers – having purchased the brand in the preceding year but not since. Additionally, the data showed an audience of 250,000 shoppers who bought from related sub-categories, but not the brand’s category specifically.
Equipped with this information, we were then able to create specific media tactics to engage with those groups: coupons at till and online offers for the former, and inspirational, trial-focused direct mailers for the latter. Supported by store media in large format branches (those where the product was most likely to be stocked) this targeted campaign helped to drive awareness, increase purchase frequency, and lock-in long term loyalty.
Deeper, broader insight
So, behavioural insights are critical, because they help brands understand who their customers are and the things they care most about. And while it’s possible to learn that via focus groups, those insights are ultimately very limited in comparison with the knowledge at scale that comes with data from tens of thousands of shoppers.
Customer segmentation isn’t the only way in which data-driven insights can be used to improve the efficacy of a brand’s media activities, either. With the right approach, they can also help brands to spot key trends and events, and learn which channels their customers are most engaged with. Ultimately, this helps them understand more about when – and where – to run their campaigns for maximum impact.
It's in the combination of all of these factors that we see the true value of media insights. Equipped with an in-depth understanding of their customers, brands can deliver highly specific messages to the right people in the right place at the right time. Not only does this help to make their media spend more efficient, it helps to make it more effective, too.
With shopper behaviours changing faster – and more deeply – than at any other time in recent memory, that’s the kind of cross-funnel predictability that brand marketers need at the heart of their strategy.
 Big Swings in UK Digital Ad Spending by Industry, but Retail Pulls Ahead – Caspia Consultancy, 17th December 2021
 French Advertising market recovers in 2022 with increased focus on ESG – Moore Global, 8th April 2022
 Brand strength or margin? Both! – McKinsey, 9th September 2021
 The growth triple play: Creativity, analytics, and purpose – McKinsey & Co, 21st June 2021
 State of the Connected Consumer: 5th Edition – Salesforce, 13th May 2022
 Consumer Pulse: Wave 9 - dunnhumby
The latest insights from our experts around the world
Speak to a member of our team for more information