have become highly sophisticated as more brands across industries leverage data collected through e-commerce transactions to develop personalized messaging and more effective tactics to drive sales.
In the early days of digital marketing services, this primarily benefited industries with a strong online presence, such as consumer technology or retail. Online purchases provided manufacturers with troves of first-party customer data. Leveraging their knowledge of customer preferences, these brands were able to develop digital marketing tactics that reached their customers in the right ways and at the right times.
Brands within the consumer packaged goods (CPG) space have historically been at a disadvantage and unable to benefit from the same level of e-commerce data as other industries. Although CPG sales growth in e-commerce has been rapid, the majority of CPG sales today are still made in store. CPG manufacturers instead had to rely heavily on consumer models, rather than firsthand data, to design and target their digital media and Digital marketing campaigns.
As a result, CPG marketers generally believe they lack the data resources to design and implement a digital marketing strategy with the same level of personalization and efficacy as more digitally focused industries. For a long time, that was true.
However, new innovations in purchase measurement and consumer behavior tracking have created opportunities for CPG marketers to catch up to – and even surpass- the sophistication of digital marketing campaigns in other industries. [Full disclosure: My company offers CPG data tracking services.] Understanding the power of these tools can help CPG marketers optimize their media spend and maximize their campaign’s efficiency in three specific ways:
CPG marketers today have access to scaled, deterministic, verified shopper audience-building tools to help identify households that are already receptive to specific brands. These tools use known offline purchase behavior based on loyalty card data from a growing number of national retailers to track a household’s purchases and use that knowledge to build more relevant marketing campaigns.
Agencies are also building data pools that incorporate this purchase data alongside other relevant datasets to enable marketers to reach specific households for maximized media efficiency, even for brands that rely primarily on in-store sales.
In addition to targeting the right consumers, this same purchase data asset can be used to optimize campaigns in flight based on actual offline sales rather than reach, frequency, views, clicks or other proxy metrics.
As we know, consumers have different reasons for making purchases, and it’s important to personalize messages accordingly. Historically, the CPG industry has been slow to accept this reality. Part of the reluctance comes from the nature of the products and categories themselves. For example, a toothpaste manufacturer may argue that buying broad-reaching TV ads — as opposed to more personalized digital ads — is most efficient, justifying the decision based on the fact that their desired consumer is “anyone with a mouth.”
We all know that different consumers often purchase the same product for different reasons. The right creative, combined with smart targeting strategies based on consumer insights derived from the products they purchase offline, can be far more effective than a single broadcast message, even for products with massive penetration.