Best of 2012: CPG Producers to Optimize Online Marketing Spending
This year, new research surfaced on how super-consumers drive sales of newly released consumer packaged goods (CPG). Now there’s more data out on the link between online advertising and the resulting increasing in consumer purchases of CPG. All of this focus on the CPG category may have marketers in that segment rethinking their advertising strategy.
Total ad spending by CPG producers approaches $22 billion annually. To date, between $2 billion and $3 billion has been moved online by these marketers. However, this amount may increase as a result of research from Nielsen Catalina Solutions. The firm is using shopper-based analytics to maximize the return a specific marketer can achieve by optimizing digital ad expenditures. Mike Nazzaro, CEO of Nielsen Catalina Solutions says, “Not only can we prove that online advertising drives sales, but the returns on ad spends are significant when purchaser-based data is used to optimize the media buy.”
Analysts at Nielsen Catalina Solutions are measuring the ratio of incremental sales generated against the cost per thousand (CPM) for online advertising. For each dollar a brand spends on online advertising, the average resulting sales are $2.79. By product type, these ratios vary as follows:
- Food $2.36
- Over the counter $2.72
- Health and beauty $2.73
- General merchandise $2.73
- Beverage $3.17
- Pet $5.29
Whether advertisers use the system discussed Nielsen Catalina Solutions or another data analytics model to measure consumer behavior and advertising returns across multiple channels, it seems likely that they can increase sales by studying the data and increasing their online ad expenditures.[Source: Online Advertising Using Purchaser Data. Nielsen Catalina Solutions. Ncsolutions.com. 24 May 2012. Web. 6 Jun. 2012] UPDATED 11 Jun. 2012.