Read more on this topic in the Kenshoo report, Mind the (Data) Gap: What CPGs need for retail-intelligent advertising and ecommerce success.
Going from data-poor to data-flush is not an insignificant task, but CPG marketers are focused on just how important it is to their success. “It will be essential to listen on a daily basis to what the markets, the clients, the customers, the consumers are telling us,” said Coca- Cola’s Strategic Connection and Media Director. “And we adjust our spending to what really matters in a specific moment.”
4 Ways CPG Marketers Can Get the Data They Need
From direct-to-consumer programs
PepsiCo’s recent DTC moves will help it gather consumer research to inform future efforts. And they aren’t the only ones thinking that way. Jackson Jeyanayagam, the VP and General Manager of DTC for Clorox, has been looking to invest in DTC as a way to build better customer data. “We’re going to learn and optimize which SKUs are going to do well.”
In the RetailTouchpoints.com article, The Case For Subscription Service In CPG, Publicis Sapient’s Kristen Groh advises a similar course of action for other data strapped CPG companies:
“Take for example the laundry category, where a CPG company may have a suite of fabric care products that meet the various needs of wash day. With their knowledge of the usage occasions, frequency of replenishment and ingredient preferences, this company could start with a DTC subscription-based business focused on laundry. This will allow the company to test and learn — closely monitoring consumer behavior and preferences, and quickly optimizing features, functionality and pricing to find a model that delivers enough consumer value to capture the adoption and maintain ongoing usage and loyalty. Once the service gains traction with consumers and is showing value to the business, the company can expand into adjacent categories.”
Work with data vendors
The advertising industry has never had a shortage of data companies willing to sell to marketers. It can get pricey—and sometimes the cost exceeds the value—but for marketers who lack the data themselves, it can be an immediate way to solve some of their data needs.
Some of the types of vendors CPG marketers might consider include:
Panel data, by companies such as Nielsen, IRI or Kantar Worldpanel, can help CPG marketers better understand shopper demographics or behaviors.
Point of sale (POS) and loyalty card data such as what NCSolutions (formerly Nielsen Catalina) provides to gather consumer purchase data. This is generally in-store versus online, yet the insights into “who is buying what” can inform online decisions.
Retail analytics, such as what can be obtained from companies such as Profitero or DataWeave offer digital shelf insights such as described in the Kenshoo.com blog post article, The CPG Data Gap: 3 Types of Data Marketers Need for Retail-intelligent Advertising.
Audience targeting, from companies such as Experian, Epsilon, and Oracle, can provide IDs that can be ingested and used by media platforms to target customers based on a wide range of criteria including purchase behavior.
Via digital advertising data
CPGs will spend $12.8 billion in online ads in the US in 2020— representing 8.5% of total digital advertising spending in the U.S. this year. Beyond the value of the impressions, clicks, engagement, and sales that this investment will generate, the resulting data from these ads is significant. CPG marketers can use this dataset to learn a lot about consumer behavior if mined correctly.
- Search advertising is not just a proven tactic to reach interested consumers at the moment of intent, but also provides a glimpse at scale into what is on their minds at any given moment based on the keyword choices they use.
- Social advertising offers granular targeting of consumers based on a wide range of criteria including demographic, geographic, behaviors and interests, and other signals. It represents a valuable opportunity to test marketing messages by audience segments which can inform creative strategies for other channels.
- Commerce advertising—offered by retailers such as Amazon.com and Walmart.com—enable CPGs to reach consumers while they shop in those online stores. 95% of spending on this channel is on search-triggered ads which can help CPG marketers to gauge the volume trends of product searches, consumer interest (via click-through and conversion rates) of specific features and assortments of their products, and identify (via bid price fluctuations) when competitors are increasing their advertising investments.
For savvy CPG marketers, digital advertising can be planned and executed in a manner that best benefits the data strategy. “We advocate that the more significant value is to view the consumer relationship as the overarching objective. Rather than a series of campaigns or programs driven by different silos in an organization, enterprise-wide marketing should help create a more valuable relationship with each consumer/customer over time.” — How to Make CPG Marketing Better with a Data-Driven Approach
Partner with online retailers
Offline, retailers have traditionally owned the relationship with end-customers, and online retailers have a similar leg up in the digital world. Every visit to an ecommerce store—whether it generated a sale or not—has tremendous potential to inform CPG marketers about how to better market their products. Each search and subsequent searches can shed light on consumer preferences and provide illuminating intel about what is/isn’t trending and the elusive connection between SKUs.
Some online retailers already offer some of this data to its partners (for example, Amazon’s Brand/Retail Analytics data, Walmart’s Retail Link portal), but the general consensus from marketers is that it is just the tip of the iceberg with regards to solving their data scarcity issues.
Outside of just trend data, tangible, anonymous tracking IDs can be used to retarget customers based on observed behavior such as what they’ve added to their shopping carts but never finished the purchase. CPGs like Procter & Gamble want retailers to share their valuable customer data so that it can serve more targeted ads. “We’re starting to ask retailers — with our ad tech partner— to share shopper ID data,” said P&G’s Tom Pickford.
From the Digiday article, To help ward off Amazon, CPG advertisers are seeking data relationships with retailers:
“As the CPG advertisers renegotiate their agreements with retailers, everyone is trying to regain footing in what is a very volatile market,” said Peter Sedlarcik, chief data officer at Havas Media Group. “Increasingly, the sharing of data is on the table as a discussion point on how each side can get value out of the relationship.” Whereas cost and margin dominated those negotiations in the past, shopper data is having a larger influence on the outcome now. Demand for so-called “second-party data” in grocery is on the rise. This involves a retailer sharing its first-party data with advertisers to bolster their existing data sets.”
When it comes to consumer browsing behavior, there are certainly some hurdles to overcome based on privacy concerns and regulations, but there are ways to ensure anonymity when retargeting a consumer within an online retailer.
READ THE REPORT: Mind the (Data) Gap: What CPGs need for retail-intelligent advertising and ecommerce success
Inside this complimentary Kenshoo report, learn about:
- The new market shifts creating the challenges facing today’s consumer packaged goods marketers
- Why data is the key to overcoming ecommerce obstacles
- The types CPG analytics marketers lack and why they need it
- How to access and activate critical datasets
- Recommendations for building a marketing practice based on data