CPG Companies to Shift Shopper Marketing Budgets to Paid Search

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Shoppers aren’t exactly flocking to online grocers. But, online grocery purchasing is growing. Analysts say between 2% and 4.3% of grocery buying now happens through digital channels. As consumer behavior changes, consumer packaged goods (CPG) marketers, largely comprised of grocers, are trying new tactics to reach their audience by shifting their shopper marketing budgets.

The Consumer Packaged Goods Shift to Digital

Shopper marketing expenditures by consumer packaged goods companies amount to over $100 billion a year. Historically, when consumer packaged goods companies introduced new products to the public, they poured their advertising money into paper coupons and circulars. Shopper marketing also encompasses shelf displays and store promotions, where the cost is borne by consumer packaged goods companies.

Consumers still pay attention to traditional marketing pieces. That's why about 13% of a typical consumer packaged goods company’s marketing budget goes to traditional shopper ad pieces. However, digital marketing accounts for much more than that — 19.7% of total marketing budgets.

The War for Shopper Marketing Dollars

A new report from Digiday reminds readers that Google and Amazon are the key beneficiaries of search marketing expenditures by many types of retailers. Consumer packaged goods companies are included in that group. Often, the consumer packaged goods companies work with a third party that provides services to run paid search campaigns on Google or Amazon.

Your Opportunity

The tech giants are now also competing for shopper marketing expenditures. Seb Joseph writes, “CPG advertisers are increasingly giving retailers budgets to spend specifically ads on Google Shopping.” This strategy represents a new partnership between consumer packaged goods companies and their retailers. The retailers, your local grocers, use these funds to promote the consumer packaged goods products they are carrying. When consumers click on the paid search ads, the retailer has a good chance of scoring an online sale.

Analysts expect consumer packaged goods companies will also move some of their shopper marketing budgets to Amazon. This is especially true when local retail partners maintain an online marketplace on Amazon. These consumer packaged goods companies may make marketing funds available to be used to drive digital awareness and sales on Amazon marketplaces.

Marketers are putting a premium on partners that possess Amazon search expertise. If you’re developing this expertise, it’s time to start promoting your skills to make sales pop in this growing marketplace. To position yourself properly, check out the grocery shopper profiles available on AudienceSCAN at AdMall from Salesfuel.

Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.