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The Golden Rules of Measuring CPG Advertising Performance

Thursday, January 23rd, 2014

Advertising budgets remain under scrutiny like never before.  CPG manufacturers and retailers are still recovering from the last recession and are faced with volatile commodity and operating costs. Consumers continue to reassess what they buy and where they shop.  Senior managements are demanding improved methods for analyzing traditional and digital advertising costs to return on ad spend (ROAS). With these various obstacles, CPG manufacturers and retailers must be determined to grasp the emerging tools and platforms to measure multiple return objectives.

After a recent #IRIWebinar, “The Golden Rules of Measuring CPG Advertising Performance,” that I hosted with Marc Ryan, co-chief executive officer at InsightExpress, we polled attendees and found some striking results.

Only 9 percent of webinar attendees rated their organization’s digital measurement as highly sophisticated, while a mere 34 percent consider it average. Furthermore, webinar attendees consider “overall sales lift,” “identifying the best performing campaign tactics,” and “sales drives” as the top three most pressing questions with their measurement of digital media.

With CPG manufacturer and retailer concerns in mind, the webinar provided a long-term view of how consumer attitudes and behaviors intersect and offered insights into new, unique methods to solve persistent challenges in brand measurement. This includes the eight golden rules of measuring CPG advertising performance:

Golden Rule #1 – Frequency is Crabgrass – Frequency is less important than reach. It’s better to contact three consumers one time than to reach one consumer three times. Finding new, unexposed viewers is more beneficial than having the same audience view your ad over and over.

Golden Rule #2 – Measure the Multiple Return Objectives- Advertising is multi-dimensional and every ad performs differently. Furthermore, digital channels have disrupted consumer behavior and the traditional path to purchase. Instead of simply going to the store and purchasing an item, consumers are recommending products via Facebook and Twitter or engaging in other forms of specialized advertising and media.

Golden Rule #3 – Choose the Right Measuring Stick – Single source and modeled measurement each have their pros and cons, and advertisers must determine which measurement to use on a case-by-case basis. For example, modeling is appropriate for determining overall sales lift while single source helps them understand consumer drivers such as new buyer penetration and increased spend per household.

Golden Rule #4 – Creative and Media Go Hand in Hand – Creative is the most important aspect of the media plan but often the least understood.  Always measure both creative and media to fully understand campaign impact.

In terms of creative, keep it simple. A cluttered ad results in poor brand performance, and logo size and presence is important as well as ad size. Additionally, human faces draw attention—ads with human faces perform better because faces make them more relatable.

Golden Rule #5 – Choose the Right Metrics- For large brands, too many metrics can lead to saturation. Some metrics are more useful than others; pick the metrics that matter depending on the size of the brand.

Golden Rule #6 – Don’t Forget the Purchase Cycle – Different categories and brands are purchased with varying frequency (obviously) and sales continue to occur after campaigns end. Be smart about when you measure sales during and after your campaign.

Golden Rule #7 – Social is Not Always Social – Social media is rarely purely social these days; it’s another broadcast medium and works in concert with your other media and marketing activities.  Understand the appropriate metrics to gauge the earning potential of your media activities.

Golden Rule #8 – Native Advertising is King- Native sounds new, but it really isn’t. Native advertising is more impactful than typical creative.  Explore emerging native platforms to scale media efforts with fewer overheads.

These golden rules will help CPG manufacturers and retailers utilize emerging advertising tools and platforms and better measure their results. Check out the IRI webinar replay on our website to learn more.  Also, don’t forget to register for the 2014 IRI Summit taking place on March 10-12, where Marc Ryan and I will be presenting a Growth Session on this topic!  Visit www.cpgsummit.com for more information.

Social Media: Planning for Real Time in Consumer Package Goods

Monday, June 3rd, 2013
Recently, I had the privilege of moderating the CPG panel during the IAB Social Media Agency Day. The title of the event was a bit paradoxical; “Social: Planning for Real Time”, but given that marketers are dedicating more and more of their budgets toward social media, they are increasingly leaning on their agency partners to do something that they haven’t traditionally been asked to do, namely plan for the unexpected. The recent “poster child” for a brand that did this successfully is, of course, Oreos during Super Bowl XLVII (which was jokingly referred to during the event as “Lord Voldemort” i.e. the campaign which shall not be named—precisely because everyone has been talking about it.) Organized by the IAB’s Social Media Committee, this event discussed real time social media planning by different verticals: CPG, Travel, Auto and Sports. “By featuring different categories, we were able to show a great range of real time social media examples”, said IAB committee liaison, Susan Borst, adding, “You don’t have to be a Super Bowl advertiser to have real time social media impact.”
With me on the panel were three social media notables:
Our conversation ranged from the Oscars to the tragedy in Newtown and highlighted key insights that CPG/Food brands and their agencies need to keep in mind as they strive to engage with consumers in ways that are both meaningful to them—after all, they wield the power today, don’t they?—and true to the brand promise.
Phil Ripperger: What does real time mean to you and how does social media fit into the equation?
Emily Culp: Humans are real time, and brands need to be more and more humanized (by the very humans who create them!). This doesn’t mean jumping up in every possible moment. It means, just like a human, that brands should add value in relevant moments.
What is a relevant moment? How do you know as a human? You can feel it. Brands need to be listening, asking questions, and engaging with their consumers in a way that adds value and allows them to feel when topical content or value is right.
As marketers, we go to school to learn classical marketing (5Ps) and then spend the weekend acting as a consumer might. Those two things need to come together, with the rise of mobile. Getting out of campaign mindsets and living and breathing each day is the real value of real time.
How do we do that? It means we need a team full of smart, innovative, pioneering marketing minds and the support of legal, comms, and the executives to support something that might not feel quite as comfortable but will resonate with our consumers & sell more units.
Dina Freeman: At BabyCenter, being prepared for real time means more than pushing stuff out during big events like the Oscars or Super Bowl. Every day, moms in the BabyCenter Community are talking to other moms with similar due dates or children who are the same age, asking for advice and product recommendations. Our Talk Tracker tool can pinpoint when these conversations are happening down to the exact week of pregnancy or a child’s life. This represents an enormous opportunity for brands who want to reach moms at the exact time that they are making decisions about that product or service. That’s as real time as it gets.
GG: Real time is creating and distributing content that is consumed right at that moment about topics that are relevant to a specific time period. Examples – talking about the Oscars DURING the TV broadcast or covering fashion week in NY as it’s happening. The content loses its relevance after a very short period of time. Social is the absolute perfect place to distribute real time content. People are checking it all times, it is interactive, it is short form, and it is highly mobile.
PR: Why is it important that we’re talking about it and what are some examples of how it’s being done right?
DF: When we dissect new trends until we’re all sick of hearing about them, we move the industry forward. As much as people are tired of hearing about the OREO moment, it was monumental in bringing real time social to the surface. It forced brands to pay attention and create a strategy.
One important question for brands to ask is when shouldn’t we be engaging in real time social? When national tragedies hit, like the Boston Marathon bombing or Newtown, it’s wise for brands to immediately take the temperature of their fans and be prepared to remove all posts in all social networks if necessary. We learned this during the Newtown tragedy back in December. When the news hit, we were in shock along with the rest of the nation. While grappling with the senselessness, we forgot to pull our pre-programmed posts, including a celebrity-focused Facebook post that was not right for that moment. Our moms instantly let us know that this was not appropriate and we agreed with them apologizing for the oversight. We then decided to pull all posts for a couple of days because, frankly, nothing seemed right to us either. All of that to say, it’s as important to be prepared and have a checklist for those real time moments when silence is golden.
GG: Because real time / social content is driving consumption on mobile and everyone has smart phones and are using them as content consumption devices on top of communication devices. Brands that take advantage of real world events are doing it well – obviously Oreo cookies but brands like Burberry do an amazing job covering fashion week (both their own brands and other brands) and L’Oreal does a good job having events during the Golden Globes and Grammys.
EC: Social moves units. It gives us context for consumers. It drives them to specific retail locations. And more than anything, it builds a deeper relationship with a brand they actually want to talk to.
At Unilever, we want the best idea to win and fast. So that means we can’t just rely on marketing models with historic data & react solely to that. We’re passionate about our consumers, bringing them closer to us and making the brand a part of their lives is far more interesting.
This is about pre-work, it’s about having your entire team and your agencies working together before that real time moment (whether it’s the Super Bowl or a Monday afternoon that matters in your community). Just as we used to plan ahead for crisis, we should plan ahead for positive moments where a brand can add value.
PR: Now to put my market researchers hat on and ask my favorite question about social media: How do you know if it’s successful—how do you measure it?
GG: If lots of people are consuming the content. If the content is being syndicated on Twitter by both the brand’s account and on tons of influencer accounts, it will be viewed by lots of people. An even better testament is the engagement. If people start sharing and commenting on the content it is even better. Measuring hard metrics like Post views on Facebook, retweets on Twitter, pins on Pinterest etc. are a good start.
EC: We played with content during the Grammys to understand what we would do during the Oscars on Dove. This is about testing and learning. What matters is that our engagement numbers on those pieces of content go up compared to a normal day.
D.F.: Measurement really depends on the platform, but overall, we measure success by the level of engagement. We look at Social Actions, which is any action taken on a post regardless of platform. Comments, likes, shares, photo views, photo submissions, pins/repins, clicks … the list goes on and on. Our clients are also interested in Social Impressions, or the number of times a post is displayed on Facebook and Twitter.

ARF Audience Measurement 7.0 Conference – Gain Insights into the Correlation between Social Media and Incremental Sales

Tuesday, June 26th, 2012

Earlier this month, I had the pleasure of speaking at the Advertising Research Foundation’s Audience Measurement 7.0 Conference. I co-presented with Elizabeth Morgan, senior vice president of Business Development at Visible Technologies, a leader in social media monitoring, analytics, and services for enterprises globally.

During our presentation, “Meshing Social Media Activity and Sales: A Real-World Pilot,” we outlined the effectiveness of social media and other digital marketing strategies employed by CPG companies and retailers to generate buzz and drive sales.

Marketers want to know how the resources they invest in social media programs convert to measurable benefits. SymphonyIRI and Visible Technologies executed a project based on data from a leading, worldwide snack food manufacturer to better assess how companies can quantify the buzz created through their social media programs.

There are five social metrics that convey the impact of social media on sales: volume, the number of aggregate mentions of the brand across all social media channels; frequency, the pace of references to the brand; influence, the potential impact of the individuals and groups driving conversation about the brand; reach, the penetration of your brand and engagement efforts into the target audiences; and sentiment, the tone of influencer reactions to your brand.

For a year, SymphonyIRI compared changes in a single product’s online buzz to changes in that product’s sales. SymphonyIRI found that changes in that product’s sales correlated positively with the social media surrounding that product.

SymphonyIRI analyzed the relationship between the five social metrics with point-of-sale data consisting of sales rate, average price, distribution (number of items) and in-store merchandising (price reductions, features and displays) from over 65,000 stores in over 290 categories, using a time-phased regression analysis.

During SymphonyIRI’s investigation, the company integrated a campaign with Zynga’s Farmville game that allowed players to harvest the snack food company’s branded crops, create new products and earn virtual goods. As a result, buzz increased the month after the campaign started, as did sales. According to the research, a spike in sales occurred during the third month, and then another occurred after the introduction of Farmville in the tenth month. The company estimated an average monthly social incremental of 12.4 percent, concluding that there is a clear relationship between social media and sales ROI.

SymphonyIRI and Visible Technologies will continue their research to better understand social media’s impact on sales. While our initial study points to social media activity leading to social buzz that impacts sales, there are several variables that influence the success of social media. In order to fully determine the relationship between social media and sales, SymphonyIRI will also research campaigns that did not involve heavy social media, and observe changes in sales. The company will also incorporate data from marketers’ ad campaigns, such as ad impressions and gross rating points, in order to more precisely to gauge the impact of social media.

Regardless of our initial findings, there are still barriers that we need to overcome going forward. We need to break down management’s skepticism, learn how to incorporate social media as connective tissue in the marketing mix and devote time and effort to building relationships with consumers through the various social media channels.