How Retailers and CPG Brands Can Maximize Value - eMarketer

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How Retailers and CPG Brands Can Maximize Value

Manufacturers look to maximize marketing ROI, and magazines might help

July 29, 2016

Consumer packaged goods (CPG) manufacturers and the retailers that sell their goods have some differences when it comes to their opinions on how to best realize value, according to April 2016 research.

Important Initiatives for Realizing Value* According to US CPG Retailers vs. Manufacturers, April 2016 (% of respondents)

For retailers, the No. 1 way to a successful consumer value proposition is getting the price right: 96% of retailers surveyed by Cadent Consulting Group said it was important. Almost nine in 10 also pointed to innovation, and 81% rated optimizing assortments important.

On the manufacturer side, however, getting the price right was secondary to innovation, and tied with two other ways to realize value—minimizing costs and focusing on productivity, and maximizing marketing ROI.

Average Return on Advertising Spending (ROAS)* and Incremental Sales for US CPG Ad Campaigns, by Media, 2004-2015

If marketing ROI is a priority, magazines could be one place for CPG manufacturers—and, by extension, their retail partners—to look. According to 12 years’ worth of data collected by Nielsen Catalina Solutions (NCS) on the results of CPG ad campaigns in the US, each dollar spent on magazine advertising brought in $3.94 in incremental sales, about 50% more than the average return on the media studied.

Display ads (excluding programmatic ads) had the second-highest return, at $2.63, followed by linear TV, at $2.55.

The value of an impression—not studied for magazines—was highest on mobile and lowest for display ads. Overall, each dollar of media spending studied led to $0.25 in sales to a household reached by the ad campaign; by this measure, linear TV performed best.

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