By Kristin MacGregor, Christine Turner
The economy is in flux, and shoppers are changing their behavior accordingly. They’re spending more time researching, and 70% agree that they’re being more thoughtful about what they spend their money on.1 This is especially true in the consumer packaged goods (CPG) category, where 56% of shoppers say that a brand’s website influences their decision to purchase that brand.2 However, since a majority of sales happen offline, CPG marketers often struggle to measure their lower-funnel tactics and don’t consider themselves performance marketers.
Therefore, it is more critical than ever to measure the full customer journey and determine which campaigns maximize profitability. Already, leading CPG brands have begun evolving their strategies to track the customer journey from end-to-end — from awareness and consideration to offline conversions. These adjustments can help drive long-term growth, even in uncertain times.
But not to worry if your measurement approach isn’t holistic yet. Here are two principles that can help guide your evolution, as shown in the stories of two companies, Reckitt Benckiser and Campbell Soup Company, who put these strategies into place and achieved lower-funnel marketing success.
Measure for long-term profit, not just efficiency
CPG brands tend to view sales as the sole gauge for how they should invest their advertising budget. While sales are important, limiting your focus to sales only can cause you to overlook the underlying factors that drive performance, such as ad creative, audience targeting, and sufficient investment. Sacrificing effectiveness for efficiency in this way risks lowering profitability overall.
Identify the most important outcomes and make them your measurement focus.
Indeed, leading brands have stepped away from a sales-only measurement strategy to instead track several KPIs across the customer journey, both online and offline. Doing so allows them to clearly link awareness and consideration to actual sales.
How do they do it? Brands start by tracking a variety of metrics and outcomes to understand how each one relates to another. Then they identify which outcomes matter most for the brand. For some, it may be profitable customer acquisition and growth; for others, it may be increasing customer loyalty. The point is to identify the most important outcomes and make them your measurement focus, particularly for performance marketing.
One company that’s done this particularly well is Reckitt Benckiser, which produces the baby formula brand, Enfamil. While the vast majority of Enfamil’s sales occur offline and in third-party retail stores, the brand’s Search campaign KPI focused on online conversions only. So, at the suggestion of their agency partner, Hearts & Science, the Enfamil team expanded their focus to a comprehensive, omnichannel KPI that accounted for both online and offline outcomes and that could be incorporated into their value-based bidding formula. Next, they ran a pilot test of Google’s CPG store sales solution to determine the return on ad spend (ROAS) of those Search campaigns and to quantify total offline conversions.
It’s critical to ensure your measurement framework aligns with what you’re trying to achieve.
Results showed that by evolving and automating their Search campaigns, the Enfamil team saw a higher total conversion value, higher conversion rates, and an improved ROAS. This was a far better outcome than if the Enfamil team had shifted their strategy to optimize for efficiency only.
As Amardeep Kahlon, general manager of U.S. nutrition at Reckitt Benckiser, explains, “While digital media has a rich amount of metrics, they won’t always be tied back to business-based results. It’s critical to ensure your measurement framework ultimately aligns back to what you’re trying to achieve.”
Test, learn, and be agile
Experimentation is the second guiding principle critical to implementing end-to-end measurement. Quite simply, brands that embrace a “test and learn” mindset by continually testing their approach and running frequent performance checks are set up for success. Why? Because doing so helps them uncover which KPIs produce the most profitable growth, which allows them to optimize for every single dollar. But experimentation alone isn’t enough. Brands must also be agile enough to change course based on their tests and adjust their strategy as consumer behavior changes.
The Campbell Soup Company is an excellent example of this. For years, Campbell used Search campaigns to drive customer acquisition and retention. But, as consumer behavior began to evolve rapidly, the marketing team realized they needed to test other ways that Search could be used to engage consumers and offer real-time product information.
Brands must also be agile enough to change course based on their experiments, and adjust their strategy as consumer behavior changes.
The team analyzed which components of their Search strategy drove the highest offline sales and customer engagement. Results show that Campbell recipe campaigns delivered a significantly higher ROAS than their average campaigns did. And, with the help of the media agency, Spark, the team refined the content on the Campbell brand site and updated Search ad copy to reflect Campbell’s most searched-for recipes as ways to improve relevance.
According to Marci Raible, vice president of global media and marketing services at the Campbell Soup Company, “Our lessons from this experiment will enable more real-time optimizations for offline sales and help demonstrate the value of brand equity for Campbell’s broader search strategy.”
Consumer shopping habits are changing as the market remains uncertain. By adopting a flexible measurement strategy that focuses on long-term growth, brands can still make meaningful connection points with the consumer throughout their journey.
To learn more about how to create an end-to-end measurement strategy, tune in to CPG On Air: Driving Actionable Results with Closed-Loop Measurement.
This article first appeared on Think with Google.