Interest in measuring the ROI of shopper marketing is increasing across the industry, again. There has always been high interest, because the owners of the shopper marketing budget want be accountable back to their stakeholders. Interest is increasing due mostly to changes in the economy and e-commerce disruption. These factors are causing many to change their marketing plans which then leads to questions as to where the best place is to spend my marketing investments.
Most consumer packaged goods companies have been measuring the return on investment for their brand and trade marketing quite well for a long time. However, shopper marketing has some unique challenges to overcome for useful and accurate measurement.
Shopper Marketing ROI Measurement Challenges
- Availability of shopper marketing data
- High granularity of the marketing activities
- High degree of marketing integration
- Availability of experienced shopper marketing analysts
For other types of marketing, most of the input data for the analytic measurement models is readily available from a single source — media companies for advertising, coupon processors for coupons and POS data aggregators for trade promotion. Shopper marketing data comes from hundreds of sources and doesn’t have a single organization to aggregate it. Then once the data are collected, there are no industry standards for how to count the amount of marketing executed or how to transform this data into useful model inputs. Consistency in the model inputs and the transformations are key to the accuracy of marketing ROI models.
Shopper marketers want to learn results from each tactic execution in each shopper marketing program because that is where the sales lift comes from and is the focus of planning decisions. The problem is that shopper marketing has many small marketing tactic executions and measurement models become less reliable as what you’re measuring becomes smaller.
Shopper marketing has the most integration of any other marketing. Usually there are multiple tactics running at the same time as well as trade promotion and sometimes brand marketing. Good integration of the marketing tactics drives effectiveness synergies to increase your ROI, though typical marketing models are not designed to either separate out the effects or measure their synergies
Shopper marketing is going through the same discovery process in terms of ROI measurement as advertising and trade promotion did before it. When the industry first started measuring advertising and trade promotion 30 years ago, we weren’t perfect, and there were a lot of trials and errors. However, eventually we got much better at it and now the industry has thousands of knowledgeable and experienced analysts as well as many good marketing analytic vendors. Most of these analysts are in consumer packaged goods companies, POS data providers or marketing analytic vendors. Their focus has not been on shopper marketing, so their knowledge and experience have not increased along with the demand for shopper marketing ROI measurement, leaving a gap in supply.
Why are these important?
Marketing analytics requires a great deal of judgment along with the scientific knowledge. Judgment and experience can help overcome each of the measurement barriers. Experience along with iterative learning helps you know not only what data you need for model inputs, but where to get it and how to standardize it and transform it so that it works well in the model. For example, different marketing venders measure advertising exposure or impressions differently. An experienced analyst knows how to standardize this data, so the model works well. The problems with high integration and granularity in the marketing programs can also be overcome as well with the right experience and learning that comes from many iterations of hypothesis testing.
Overcoming the Barriers
Each of these barriers can be overcome to produce accurate ROI measurement for shopper marketing tactics that is consistent and comparable to other marketing mixed models. It takes standardizing the data, understanding how the exposure to purchase conversion happens and learning how to construct accurate models with analytic research and development. Overcoming the problems with high integration and granularity has taken Foresight ROI years of dedicated analytic research and development through many, many iterations of hypothesis testing and learning how to create models that can overcome these barriers. All of these are necessary for accurate marketing models. Other good analytic companies are also developing a solution to measures shopper marketing ROI now, though none have the experience and knowledge of Foresight ROI. So, to get good measurement of your shopper marketing ROI and accurate decision support info look for a company with a lot of knowledge and experience.
Foresight ROI, the leading provider of shopper marketing ROI measurement and software solutions, helps CPG companies and retailers increase their shopper marketing effectiveness. Foresight is totally dedicated to shopper marketing ROI measurement, has a full-time dedicated staff of shopper marketing analysts that have measured over 35,000 shopper marketing programs. Shopper Foresight is the industry leading shopper marketing ROI measurement solution with standards for data collection, data cleaning and transformations so that the model inputs are homogeneous and best represent how the marketing exposure converts to purchases. To learn more about our measurement, software or industry ROI benchmark solutions, contact us at: contact@ForesightROI.com