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Digital Marketing & ROI


Today, is — or should be — a critical element of any CPG or retail marketer’s plans. As the amount of time, resources and funding devoted to have grown, so has scrutiny from senior management, who now expect the same rigorous ROI for digital marketing as they do for other significant expenditures.

It’s critical that marketing teams engage shoppers at various points in their paths to purchase. Digital marketing adds significant new capabilities to reach shoppers in the home and at the store, but also interjects a third way to engage shoppers: on the road. The vastly increased functionality of smartphones and faster cellular networks facilitates “on the road” connections. Think about a commuter exiting her train and receiving a text message from the grocery store across the street that her favourite wine is on sale this week, for example.

Another critical capability of digital marketing is enhancing the 1:1 relationship between a manufacturer or retailer and the shopper. Syndicated content and branded websites are effective at reaching mass audiences and retailer websites; smartphone apps and social media help create community. But digital marketing has the unique ability to present shoppers with offers and information tailored to their specific interests.

Maximising the impact of digital marketing campaigns requires two essential ingredients: targeting and measurement. Effective targeting enables CPG decision-makers to identify high-opportunity consumers and high-opportunity markets. Accurate measurement allows decision-makers to determine the incremental sales uplift resulting from the campaign. This measurement can take the form of comprehensive and detailed ROI analysis at the end of a campaign, as well as rapid and directional analysis of specific tactics during a campaign, which allows for mid-campaign adjustment.

There are near-limitless ways to segment shoppers. Among the most common are by purchase behaviour (a heavy buyer of coffee, for example); by lifestyle (buyer of organic foods); demographics (income, employment status, education level); and by channel (heavy shopper). In each of these categories and in categories that integrate two or more of these segments, marketers have the ability to identify high-opportunity shoppers. Household-level targeting identifies consumers within neighbourhoods and geographies who are high-potential buyers.

Improved targeting allows marketers to focus campaigns on highly specific target audiences to achieve highly specific results. These campaigns can include increasing sales among existing brand buyers, attracting buyers of competitive brands and/or attracting buyers not currently purchasing within the category.

To measure the validity of the targeted audience, marketers can conduct tests, starting with building lookalike models based on the digital and shopper target, and tag shoppers who fit the target profile. The team can then develop campaigns that are tagged and matched between the “test” group of shoppers and a set of “control” shoppers.

When the test is completed, the marketers can analyse results and determine correlation between the digital campaign and changes in in-store sales and volume.

Marketers who recognise that digital marketing is here to stay and leverage its vast opportunities will reap the greatest benefits going forward.