In a CPG industry traditionally known for the big eating the small, today the fast eat the slow. Clayton Christensen of Harvard Business School estimates 30,000 new CPG products are launched every year. Emerging brands are accelerating innovation, proving that new product development is increasingly critical for long term success.
But speed doesn’t guarantee success. In fact, 95 percent of new products fail. Musing on why that might be, Julie Hall of Schneider Associates says, “The biggest problem we’ve encountered is a lack of preparation. Companies are so focused on designing and manufacturing new products that they postpone the hard work of marketing them until too late in the game.” In the late stages of expedited planning, awareness and conversion tactics become siloed, requiring excessive resources to deliver a holistic marketing plan. As a result, marketers often focus on maximizing total impressions by oversaturating awareness channels. This blitz creates ad fatigue, low contextual relevance, and minimal impact on purchase intent.
It started in 1994, when AT&T launched the first ever banner ad.
It received a 44 percent click through rate (CTR). The AT&T banner’s success proved the enticing theory that people would be willing to click away from a website to view a sponsored campaign. “What has come later is horrendous,” says Otto Timmons, one of the creators of the AT&T banner. He now uses multiple ad blockers to protect himself from the digital landscape where today’s average click through rate is a pitiful 0.05 percent.
Marc Pritchard, Chief Brand Officer at Procter & Gamble says, “the ability for a brand to be places that can capture and monetize consumer intent is crucial, which makes platforms that can not only deliver real eyeballs — but convert them into sales— potentially the biggest winners of P&G’s digital ad spend shift.” It’s not 1994 anymore. Forty-four percent CTRs are a thing of the past, and CPGs need the tools to evaluate the impact of every marketing dollar on purchase behavior.
Shopper Behavior
eMarketer projects that in 2019 US retail sales will total $5.5 trillion, with 89 percent coming from offline brick and mortar, 6 percent from desktop ecommerce and 5 percent from mobile ecommerce.
However, many traditional grocery retailers are seeing their sales and margins fall with shifting consumer preferences, intensifying competition, and new technology. As a result, retailers are more selective with premium shelf space and incremental merchandise, requiring additional supplier investment and assurances to avoid overstock. The ability to partner with key retail customers on digital campaigns that drive in-store trips is more important than ever.
But the ability to meet shoppers where they are today, with relevant content that converts digital impressions into offline sales is no small feat. Additionally, the shopping landscape is changing rapidly with the increased use of mobile devices along the path to purchase and the buying behavior of millennials. 84 percent of millennials use their phones for shopping assistance while in a store, and 63 percent claim to shop on their phones every day
The New Engagement Playbook
In a rapidly changing consumer landscape, CPGs are embracing the new era of performance marketing. It’s an era hyper-focused on connecting brands with consumers in meaningful ways, rather than stuffing their mailboxes with 11 billion pounds of paper coupons annually or overwhelming their phones with interruptive pop-up ads. It’s an era that gives CPGs and retailers the tools they need to weed out ineffective ad spend and focus on highly personalized experiences that drive brand loyalty and ROI, as well as one that cultivates purchase intent aboveboard in a transparent value-exchange with consumers. Ibotta’s end-to-end performance marketing approach has revolutionized the way CPG promotions are planned, executed and optimized.
CPGs leverage Ibotta’s purchase data and insights to inform continual campaign improvement and greater brand engagement along the entire path to purchase. Ibotta has developed a machine learning engine that gets smarter over time, converting more shoppers and moving them towards loyalty.
Step 1: Awareness
Improve digital ad performance with the most impactful CTA in the industry: “Earn cash back”. Nielsen conducted a study that asked US shoppers which incentive was most important to them. Cash back was number one. Ibotta funded an A/B social media study measuring the buy-through rate of a leading condiments brand. One ad focused on cash back, while the other focused on premium ingredients.
The social ad that focused on cash back delivered a 3.25 percent buy-through rate; seven times higher than the ad focused on premium ingredients.
Step 2: Consideration
Redefine what it means to “get on the shopping list.” A holistic approach to brand engagement connects the consumer to relevant content at key moments of consideration.
Whether a shopper clicks your o er from an off-platform ad, or is browsing the app to plan a shopping trip, Ibotta deploys machine learning to surface brand content at pivotal moments of consideration, prior to purchase. Shoppers simply add offers to their list before checking out in-store. Engagement examples include geo-targeted push notifications when entering specific retail locations and email recommendations based on past purchases.
Step 3: Conversions and Post-Purchase Insights
Shoppers complete a friction-less redemption experience, integrated with their retailer loyalty ID used at checkout.
For retailers, the process eliminates paper coupon interruptions at checkout and gives them the ability to collect full price without the hassle of coupon clearing houses. For CPG brands, Ibotta’s purchase data offers a complete picture of shopper behavior, giving brands the ability to retarget known purchasers, optimize campaigns in real time, and better inform sell-in strategies with unique insights for category buyers.
Moving Forward
Digital coupon redemption is predicted to jump 94 percent by 2022, and in five years 80 percent of promotional offers will be redeemed on a mobile device, according to a Juniper Research forecast.
IRI’s 2019 New Product Pacesetters lists the most successful food and beverage products related to sales volume. The top five share a commonality: they all launched with Ibotta.
Find out how Ibotta can help grow your brand. Contact us here.
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