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.