According to a study by Cadent Consulting group, shopper marketing spending has increased over $17+ billion over the past couple of years, growing from 6% to 14% of the marketing budgets. Stepping back to consider this, this is really a seismic change in marketing, not seen since the rise of the TV networks and Big Brands in the 1970’s or the rise of category management and Big Retailers of the 1990’s. So, what are the trends driving this Shopper Revolution?
From our Foresight ROI benchmark database of over 15,000+ shopper events, we are seeing an overall increase in shopper-driven digital programming spend composition since 2013, up by 121%, driving this overall share shift in shopper spending. This is an under-reported but permanent trend that is the cause of the migration of brand and trade dollars into shopper. The undertow to this is that retailers are trying to monopolize this space by pushing their own tactics as delivering a captive shopper audience in their stores, while at the same time, the media companies are trying to protect their turf via targeted programmatic delivery.
FROI’s norms show that Digital Shopper ROI is still higher (+16%) than non-digital tactics. This is a trend that has been closing as CPM’s are increasing with additional retailer delivery costs, almost doubling in some cases from Foresight’s shopper database. These rising costs need to come with rising lifts.
For now, the ROI advantage still stands with digital, but retailer and media delivery needs to change their focus from just increased revenue generation to collaborative planning with brands to drive shopper response in equal proportions at retailers. A balanced conversation is needed to maintain an equilibrium. Non-digital, which has been trending out of favor, needs to continue to reinvent itself to stay relevant and curry favor back in a clean store environment.
At Foresight, we measure a myriad of digital (and non-digital) tactics. On a LPM vs. CPM spectrum, we see digital coupons, banner ad and blogs driving the highest ROI’s along the Path to Purchase, while digital circulars, email messages, influencer, and video web ads typically on the lower end of ROI’s. Social, microsites and video ads tending toward the bottom. But, the spread of these ROI’s is up and down and not consistent, the clear implication is that high ROI’s are totally dependent on shopper relevance and insight. Retailer digital media tends to underperform for brands as collaboration principles are not practiced with regularity-they are too one-sided.
Digital is leading the charge in elevating shopper marketing in the boardroom. Being able to target shoppers pre and in-store is a big advantage with digital, and one that really is able to hit all levers along the Path to Purchase. Retailers and manufacturers need to work together to collaboratively get to the win-win situation that we stress. In fact, when this happens, the ROI is way over two times higher. That is right: Over two times higher! It is a virtual gold mine sweet spot for both parties, and can only be accomplished by putting one-sided agendas aside to focus on maximizing shopper engagement. A pretty simple formula.
If you are interested in learning and measuring more, please contact us to better understand the Shopper Revolution.