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Tips for Effective Price Promotion and Media Spending


85% of CPG brands plan to increase investments with retail media in 2022 according to Merkle.

This shouldn’t come as a surprise. Many large-scale retailers have started their own media networks to boost margins through advertising.

“Retail media networks are exploding, they’re here to stay,” Meghan Cameron, Merkle VP of monetization for new stream media explains. “People are looking for ways to engage in a digitally-first way, and being able to monetize that experience for CPGs is important.”

All signs point to a shift in CPG marketing spend – from traditional advertising and national, retailer-agnostic campaigns to digital and retail media networks, closer to the point of purchase. Inmar Intelligence research shows that 66% of CPGs plan to run a media plan with a retail media network in 2021.

Olga Yurovski, founder and CEO of Shopperations, says brands are headed online and toward retailer-specific platforms because shoppers are there too. “More CPG brands spend with retail media networks since they get the advantage of seeing metrics and tracing conversions.”

Forrester says that retail media sales will reach $50 billion globally next year as advertising that relies on first-party data becomes crucial for marketers due to new consumer data privacy restrictions and the end of third-party cookies.

Olga explains, “Digital marketing – specifically retail media – promises CPGs a new ability to attribute sales directly to their media investments, something that the industry has been obsessing for a while now. Retailers’ first-party data is invaluable since it helps CPGs be smarter partners – dollars can be reinvested for profitability.”

The challenge, however, is that it’s hard to compare retail media campaigns across platforms in order to optimize total marketing spend.

“It’s clear that CPGs need to create holistic spend plans,” Olga adds.

increase investments with retail media in 2022

Retail Media Networks

What’s a retail media network? A retail media network is when retailers create an advertising platform on their website, app, or digital properties. Neil Patel says to think of it like in-store advertising in a digital format.

Consumer goods brands spent $5 billion on retail media in 2020 according to Forrester.

Retailers shaping online advertising through their media network are:

  1. Amazon – Amazon Advertising
  2. Walmart – Walmart Connect
  3. Walgreens – Walgreens Ad Group
  4. Kroger – Kroger Precision Marketing
  5. Target – Roundel

Other retailers partner with retail media aggregators like Quotient, Inmar, CitrusAd, Promote IQ instead of developing their proprietary platforms.

Image credit: Forrester

Why are retail media networks important for CPGs?

Because CPG brands that advertise on retail media networks can tie ad spend to sales. With access to first-party data, CPG brands can be specific about ad placements to reach shoppers at the right place and right time. First-party data is collected at the point of sale and owned by the retailer. This means CPGs can now personalize ads.


Marketing Spend Stats

Back in 2012, companies spent a quarter of their budget on traditional advertising and less than 10% of their budget on digital. A decade later, that’s really flipped. Cadent Consulting says that now, CPGs spend 13.6% on traditional advertising and 21.9% on digital.

Digital spending almost tripled from 2012 to 2017.

Some of the biggest highlights from Cadent Consulting’s marketing spending industry study are:

highlights on cpg marketing spend stats

Digital > Traditional

Digital has replaced traditional advertising as the second largest area of spending, behind trade promotion.

Effective Spending

Retailers say that trade promotion and shopper marketing are the most effective ways to support brands. Traditional advertising is rated the lowest in effectiveness. Retailers and shoppers alike think trade promotion is the most effective way for CPGs to spend their money.

Shoppers vs. Retailers

Shopper marketing is increasingly becoming more price oriented with the focus on coupons and offers. But they’re regarded as the least effective by retailers. Shopper marketing (retailer customization) is highly valued by shoppers and retailers.

Social & Coupons

Digital marketing continues to grow, and retailers say that social media is very valuable. Online coupons (manufacturer or retailer) are the most powerful in influencing shopper purchase and banner ads are the least powerful.

Cadent Consulting notes that digital growth is a continuation of a mega trend. Traditional advertising and consumer promotion will decline or remain stable. As a CPG marketer, you have to recognize that consumers are researching and buying online more than ever.


What Shopper Marketers Need

For many shopper marketers, program information lives in their head and across several spreadsheets. Shopperations found that CPG marketers spend 52% of their time on non-value added, administrative activities. Without the right tools and resources, it’s tough for shopper marketers to get strategic about their spending.

Olga says that there are 3 key areas for shopper marketers to improve:

  1. An agile, standardized, repeatable planning process that lets marketers answer the questions asked by the management and their internal matrix partners
  2. A centralized, transparent way to understand where money is spent and how it’s working
  3. A system that goes beyond spreadsheets

Olga continues, “shopper marketers create the best plans with their budget to drive sales at their retailers.” At the end of the day, every shopper marketer wants to know the ROI on their spend. “With software like Shopperations, a specialized budget management and collaboration tool, CPG marketers can automate their marketing workflow – beyond budget management.”

The Shopperations functionality is a centralized system for marketing briefs, files/art tracking, agency collaboration, calendars, reports, NCH and Inmar coupon results integration, media KPI tracking which is extracted from retail media networks and other media portals.


Wait, What About TPM?

Trade promotion management (TPM) software is a closed-loop system that automates promotional spend and tactics.

Retail-specific TPM functionality gives CPGs a centralized location to set objectives, track sales / budgets, plan price promotions, accept promotions through metric-based schemes, oversee forecasts for accruals, manage spend, process settlements, and analyze the impact to your business.

But marketing spend has different needs.

“I used to be jealous of my sales team – who effortlessly pivoted their data and quickly reported plans to management – based on reports from their TPM software,” Olga says. I only had messy spreadsheets and felt unprepared compared to them.”

Functionality in a shopper marketing tool can give CPGs an advantage:

  • Simplify Vendors and Tactics. Shopper marketing teams deal with more than 30 tactics and more than 50 vendors each year. Some vendors bill via a PO process, others (magically) bypass it. Some send invoices for each program, others bill monthly. A system that recognizes process intricacies and enables multiple billing scenarios to coexist is needed to automate the shopper marketing process.
  • Support Changing Plans. Change is the name of the game in shopper marketing; they constantly move programs between periods and quarters to uphold JBP and other partner commitments, and continue to invest in equity-building initiatives despite ever-changing retail calendars. Find a shopper marketing system that can seamlessly build plans for cross-functional visibility.
  • Demystify Budget Complexity. Funding for shopper marketing programs is intricate, complex… and always in flux. The ability to tie multiple tactics to multiple funding sources is a key requirement for a user-friendly shopper marketing planning system.

By the way, you should integrate your shopper marketing solution into your TPM to enable holistic JBP and ensure that price promotions strategically align with the non-price media investments and other shopper incentives. 


Holistic CPG Spending

Digital marketing growth creates a bigger need for CPGs to have transparency into all of their spend. For most CPGs, marketing spend is rarely automated. Automating marketing spend is key because it’s an opportunity “to quickly analyze, to recognize if there’s a lift, to understand where to invest where there’s a higher ROI,” says Olga.

As customer-specific marketing spend grows, it can be tough to answer a simple question like ‘how much did we invest in digital banners at Kroger, Walmart and Amazon during this time’ – because that kind of harmonized, detailed, accurate data simply doesn’t exist. This is where Shopperations comes in – this system tracks all your data to easily monitor and manage marketing spend. Together, Shopperations and Blacksmith TPO are uniquely positioned to bridge the gap between CPG marketing and sales to accurately capture and analyze total customer specific trade and marketing spend ROI across all marketing channels and retail accounts.