In business, it’s hard to save your way to success but that’s what some consumer packaged goods (CPG) executives must be thinking. Although digital marketing holds the promise of direct, personal and relevant consumer connections proven to drive sales in other industries, CPG executives seem to view digital as more of an opportunity to spend less money.
Read between the lines of this recent article, and you might conclude the CPG industry considers digital marketing as solely a more efficient application of advertising dollars. A television spot does expose many non-buyers to brand impressions.
Return on investment for a digital ad may be higher, but it’s likely due to a smaller cost denominator than any increase in the return numerator. You otherwise would expect industry financial performance to be stronger.
Looking for growth in all the wrong places
Blame for slow sales growth gets pinned on global economic conditions, price-sensitive consumers, fading brand loyalty and greater competition. The real culprit, however, is arguably the way digital marketing has manifested itself within the CPG industry. It’s as if the agency display ad buy model has simply shifted to online channels.
Most CPG brands separately invest in website, email, mobile and social media marketing, but these efforts live in silos within and outside the company and are seasonal, promotional, or limited time in nature. Like display advertising, the goal is to support demand in retail channels as opposed to closer relationships with consumers.
Yet we all (should) know that consumer behavior is not so predictable anymore, given ideas like Google’s Zero Moment of Truth.
Cut off from the closed loop
CPG marketers feel constrained by their lack of insight into the cause/effect and ROI of their efforts observable in sales transactions. Consumers are becoming only responsive to empathetic and relevant digital conversations, but a lack of closed loop analysis places marketers in a bind when it comes to demonstrating value.
Research proves that brand website visitors spend more than non-visitors and can be segmented in a number of ways. Coupon hunters are plentiful and help account for volume. Value-seekers are more profitable, but harder to develop as a segment. Email connects consumers to branded content yet only relevant and timely messages resonate.
That’s why you see investments in content marketing escalating – you must create brand stories around how products add value to consumers’ lives, not focus on product attributes. Otherwise, price becomes the key element of a buy decision. These stories unfold across a complicated marketing mix that includes online and offline channels to attract attention.
New way of thinking
Progressive CPG marketers are thinking about new ways of expressing the value of content marketing to measure its effectiveness and impact on consumer relationships. These visionaries recognize digital as a display medium cannot be sustained and is questionably effective.
What can be measured is the impact of content marketing investments on consumer engagement. Whether it is agency creative for a new product launch or lifestyle copy for a brand website, CPG marketers spend millions on content. Content quality is becoming the measure of a brand’s connectedness to its consumers.
In practice, this unfolds by possessing a view into the impact of content across all the ways it’s employed in brand marketing.
CPG marketers don’t have to limit their view of digital marketing to the apparent constraints of a business-to-business-to-consumer model. Understanding the contribution of content marketing investments to the development of an engaged audience helps digital marketing work harder to attack the CPG industry growth problem.