Embracing Audience-Based Marketing: 3 Key Benefits for CPGs
Jul 11, 2018 • Josh Dreller
The unique challenge to marketers in the consumer-packaged goods (aka CPG or FCMG for Fast Moving Consumer Goods) category compared to other B2C marketers is that CPGs need to target almost everyone. Nearly every other type of marketer focuses on tight segmentation and targeting specific groups of people, but due to the nature of virtually ubiquitous product lines, a CPG customer can be anyone who eats and bathes.
CPG marketers always have to think big. To influence shoppers at scale, these brands have relied on television advertising for decades for mass reach. However, as consumers continue to spend their media time across web-enabled devices, CPG marketers have more channels – and choices – to help them get their messaging to as many people as possible.
Cross-channel marketing has been a prelude to the next era of advertising, audience-based marketing. After all, we’re not marketing to channels, we’re marketing to people – and CPGs have the most to gain (or lose) because they have the biggest customer base.
Cross-channel marketing simply addresses the channels that people consume. Audience-based marketing puts the focus on following consumers wherever they go. Unlike channel-based marketing, where channel budgets are generally set annually, audience-based marketing is a nimbler approach that is more customer-centric so that budgets can flow where needed to the right channels throughout the year.
Give a single channel marketer a budget, he/she will spend it without any hesitation. Yes, they may apply advanced targeting and powerful optimization techniques to their campaigns, but very little thought is given to how the customer is experiencing all of the marketing. Although ideal cross-channel marketing attempts to connect some of the dots of the journey, consumers are still being over-exposed and receiving disjointed messaging that may be irrelevant to them.
And because today’s advertising infrastructure is siloed into channels, there’s no incentive to change.
But things have to change. Cross-channel is only one step in the right direction. Let’s not stop there.
3 key benefits of audience-based marketing for CPGs
As CPG marketers continue to master cross-channel marketing, the next logical step for them will be to embrace an audience-based approach. Once they do, there are some immediate benefits available:
1. Reach and frequency throughout the media portfolio. A solution for cross-channel reach and frequency is one of the marketing “holy grails”. After all, reach and frequency are two of the basic building blocks of modern CPG advertising. The obvious issue with marketing across channels is that even if you set a frequency goal of 10 per week on each channel, if you have 7 channels, you could potentially be reaching many of your customers with 70 exposures per week.
A critical component of audience-based marketing is being able to better control ad exposure at the audience level, not just the channel level. This is not an easy problem to figure out due to the fragmentation of consumer IDs across the devices they own. However, if you are able to best understand how heavy vs. light TV viewers also interact with other channels, you can place some good bets to maximize your reach and frequency. For example, if you know a certain segment of your audience index heavily for being “cord-cutters” you might be able to safely raise your frequency to those people on other channels because you know you aren’t going to reach them with your TV ads.
2. Cost efficiencies. When tied to channel planning, CPG budgets are generally set at the beginning of the fiscal year and stay there. This advertising infrastructure has been in place for years and will be hard to change. However, when brands focus on audience-based planning, budgets are a bit more fluid and follow the target audience to the media channels they consume.
With audience planning, there may be cost efficiencies that can be leveraged when budgets are focused to follow the customer. If a CPG marketer knew the current cost of reaching each audience segment, they could adjust their media mix appropriately. Maybe this month, audience segment #8 could be half the cost to reach on social than on television. But maybe next month the lowest cost is on premium video?
Maybe in today’s world with budgets set at the annual level, this level of budget flexibility feels out of reach at your organization. But with what wins are worth at a CPG company (and especially with what losses can mean) it’s certainly worth digging in.
3. Coordinated messaging across channels. The really great outcome of moving to an audience-based approach to marketing is that it puts the customer at the center of planning and execution. Another of the marketing “holy grails” is the ability to present the very best message to an audience based on what other ads (including competitors’) they’ve seen.
By targeting the same audiences across channels, a CPG marketer could use a sequential-based ad campaign which builds awareness of a new product, then follow up with the key features of the product, and then drive consumers to purchase with a promotion or deal. This level of storytelling at scale will help CPG brands build the proper mindshare with prospects to help them fully experience and understand how they will benefit from the product and ultimately guide the sale.
CPGs have to manage their campaigns to maximize reach due to the sheer size of the audiences they have. Yes, a cross-channel approach does address some critical concerns and its undoubtedly superior to a program not built in individual channel silos. However, cross-channel marketing has some built-in issues that need to be solved. Audience-based marketing embraces a cross-channel foundation but then takes a giant leap forward with a strict focus on the customer and following them across the channels they consume.