Update: Demand Shaping in Consumer Products

Today, the CPG industry spends around $225 billion on marketing. Digital marketing is increasing, but the effectiveness is questionable.

Only 60% of the roughly 200 retailers thought digital advertising works for brands. Packaged-goods marketers now spend more on digital marketing than all forms of traditional advertising combined. However, digital marketing effectiveness is questionable. (Full study available on Adage. See full link below.) Traditional trade promotion remains the industry's biggest marketing line item. This accounts for 46.2% of brand marketing spending. This is down from more than 49% in 2012, and marketers project they'll cut it further to around 43% in 2017.

In our research, we find that only 50% of trade promotions are ever evaluated and less than 1%  of companies use optimization to understand baseline lift. The introduction of digital marketing increases demand volatility and increases the need for demand sensing and forecast value-add analysis.

Your thoughts? Experiences to share?

Source of Data: http://adage.com/article/cmo-strategy/study-cpg-spends-digital-traditional-advertising-combined/308077/

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