New Research Reveals the Sweet Spot of CPG Ad Frequency

Macroeconomic headwinds are dealing a double blow to CPG marketers: Consumers may be rethinking their purchasing behavior and companies may be squeezing their budgets. In the face of an unofficial recession, it is even more important that every CPG dollar delivers maximum return on ad spend (ROAS). The optimal strategy would be one that Goldilocks appreciates, where the brand impressions are not too much or too little, just the right frequency.

Is it more effective to remind audiences to buy once a week, or several times a day or a week for consuming media on various platforms? If they want more bang for their buck, marketers will consider taking the first route because more than one ad per week has much lower ROAS and incremental dollars per impression (DPM).

That’s according to research from NCSolutions (NCS), whose parent company is Nielsen. The research and development team at NCS, led by Principal Research Associate Leslie Wood, pioneer and inventor of ad analytics, believe that the new ad impression, also known as “innovation frequency,” is the repetitive, or iterative, frequency of driving incremental sales for CPG brands.

Less Could Be (Really)

For CPG marketers, the need to do more with less is good news – even if it requires a change of mindset to abandon the notion that drowning consumers in messaging is something that needs to be done for brands to get noticed.

Many marketing teams will likely face budgetary constraints in the coming year. According to eMarketer, CPG brands in the US have been increasing their ad spend significantly in recent years, including digital and mobile campaigns. But research from global media investment and intelligence firm MAGNA suggests that a negative macroeconomic outlook could cause industries like CPG to slow advertising spending in 2023.

NCS’s finding could also apply to any marketer looking to capitalize on the fast-growing retail media trend. Retail media advertising takes place on retailer sites and apps and is designed to grab consumers’ attention as they approach a purchase and choose from competing brands. GroupM predicts retail media will reach $110.7 billion in 2023; The media investment management firm also predicts that retail media will be the fastest growing digital investment channel in the next five years.

Running the Research

So what do marketers need to understand about the concept of “frequency of innovation” so they can use it to shape and drive marketing strategies for CPG brands in the new year?

To answer this question, I recently interviewed Leslie Wood of the NCS for my podcast The Groove. He spoke in depth about his team’s research, including the key finding that while ad frequency drives sales more, its declining returns and costs outweigh the increase.

Here are a few highlights from our discussion, along with Wood’s advice to marketers:

What is the most important factor in driving sales when it comes to ad frequency?

Wood: In fact, to increase sales, consumers need to see your ad regularly before going to the store. But in our research, we saw a much higher return on ad spend for once-weekly campaigns compared to the same reach and frequency posted multiple times at the start or end.

If you have a multi-season brand, you should change its frequency. Be sure to deliver your message just before seasonal increases. You want to keep track of where your sales are so you’re delivering messages that are recent and very close to a purchase. Here’s the crux.

Your work divides frequency into two types: novelty and iterative. How are they different and why is it valuable for the marketing industry to look at them individually?

Wood: Let’s take a while – let’s say a week. First exposure that week, innovation exposure. It’s the “Boom! Within that week, I reached my target audience.” All additional matches in that week are called iterative. They shoot. they again.

When we split them apart in our study, we found that campaigns with a high weekly impression performed much better. Now, for some campaigns, in terms of increased dollars per household, it may be better for a consumer to see an ad three times rather than once. But when you say per impressionOnce a week is much better. When you look at the return on ad spend, it’s much, much higher – like big multiples – for an impression per week.

What is the ideal mix of channels for sending messages?

Wood: I think people all have different ways of learning. It can be visual for you. You can hear it for me. So for marketers, the more diverse your message can be in the different ways the messages are delivered, the more likely you are to reach all consumers.

Whatever you do, be sure to include the brand. That’s why you need to mention the name of the brand at the beginning and definitely at the end so that when you catch someone’s attention, they know what you’re really selling.

Now that you’ve said about the importance of innovation and learning that too much frequency can lead to diminished returns, what’s your advice to marketers?

Wood: Again, get the best creative you can get. Put your best foot forward. Make sure it really shines your brand, right? This is the first.

Next, I say try to reach potential buyers, potential consumers as much as possible. Try to reach them once a week, not more often. Your budget will determine how much access you can buy and for how many weeks. But it’s much better to spread it out to more consumers and over longer weeks, rather than throwing a hard punch at a small group of people.

This interview has been edited and summarized for readability. Check out my full interview with Leslie Wood and learn more about her fascinating career in ad analytics, NCS’ research on how advertising works, and how marketers can apply findings on frequency of innovation.

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