FMCG brands are one of the categories that spend the least amount of money in news brands. Supermarkets on the other hand – the main distributors of FMCG brands and their – have continued to use news brands to build long-term brand strength and achieve short-term sale.
Although FMCG brands have a long history of using traditional media to establish their brands and rely on them to deliver commercial success, recent times have shown a decline in expenditure, which if reversed, could have a huge impact on bottom line results.
However, some major high street restaurant and coffee shop brands that are part of the broader competitive set for food FMCG are frequent and effective news brand advertisers. Take a look at the KFC case study for a brand that used publishers to amplify its message.
60% of FMCG brands’ digital marketing spend is wasted – resulting in annual losses of close to $50bn for the global industry
Meanwhile, a new study from AlixPartners claims that 60% of FMCG brands’ digital marketing spend is wasted – resulting in annual losses of close to $50bn for the global industry. Based on responses from 1,110 decision-makers from unnamed FMCG companies across the globe, a report finds that in 2018, of the $60bn spent globally by FMCGs on pure-play digital ads on Facebook and Google, just $25bn was reported to have yielded a positive ROI. $27bn saw a negative return and ROI on the remaining $8bn wasn’t even measured.
This is particularly relevant at a time when Kantar’s Mastering Momentum study, which analysed 3,900 brands in the BrandZ™ database over a three-year period, found that fewer than 6% of brands grew their market share over one year, and only 6 in 10 of those sustained that growth over three years. Similarly, Peter Field and Les Binet’s analysis of the IPA Effectiveness Database concludes that overall advertising effectiveness is in decline, with short-termism cited as a key issue. Yet Peter Field’s analysis of 146 cases including news brands shows that print newspapers are becoming increasingly effective, bringing significant longer-term business benefits, especially when in combination with digital news brands.
“Free-from” is now the fourth fastest growing category by absolute value, representing the health-conscious state of the nation
While consumer FMCG spending remains strong, consumer confidence is starting to decline as uncertainty over Brexit continues. There have also been significant shifts in the habits and attitudes that fuel these purchases. The Grocer partners with Nielsen every year for their Top Products Survey. The 2018 findings indicate that lifestyle trends – most notably the rise of ‘clean living’ and cutting back on vices – are having a profound impact on the nation’s eating and drinking habits. The buzz around veganism, vegetarianism and flexitarianism is making its mark on sales, with meat-free products fuelling the extra £41.9m spent on chilled ready meals. Nielsen’s research reveals “free-from” is now the fourth fastest growing category by absolute value, representing the health-conscious state of the nation. Meanwhile, sports nutrition is the fastest growing category, up 20.8% to £119.1m. Superfoods are also booming with avocado volumes up 8.4% and blueberry volumes up 16.6%.
People are always on a journey to buying something. We’re always gathering ideas about what types of food we want to eat, not just that day but in the coming days and weeks ahead. In an age where there is endless choice of both brands and products, brand association and salience are now more critical than ever. Our ‘How People Buy’ research supports this. When customers go for a quick shop to restock, 57% have a single brand in mind for most purchases, while the latest TGI data shows that 2 in 3 newsbrand readers stick to the brands they like. Where grocery/FMCG shopping differs from other categories is that customers are willing to try new brands when buying something they don’t usually buy – 48% have a shortlist of brands, compared to 27% of those who are buying repeat groceries.
59% of those who visit a top supermarket website have read news brands that same day, brands can capitalise on this receptiveness
There are ample opportunities for brands to help frame product considerations. There is a lack of urgency to many supermarket trips, with 59% of people saying they decide to go on the day, and with less than half of grocery products being planned purchases, brands do have time to become salient before the purchase journey actually begins. With the latest TGI data indicating that advertising is the most important criteria of choice for key demographics and PAMCo 1 2019 data showing 59% of those who visit a top supermarket website have read news brands that same day, brands can capitalise on this receptiveness.
If you want to see which channels have the greatest influence at the different stages of the purchase journey and how news brands compare, try our “How People Buy” planning tool.
News brands can help play a key role in the journey to purchase. They help build brand salience and awareness and excel at providing a moment of inspiration to kickstart the process. News brands are ideal for providing information that tests assumptions, to ensure you are not missing out on crucial information and won’t regret the decision.
Profits could be increased by 60% if the average spend in print news brands was raised by a minimum of four to 11 percentage points
FMCG campaigns that utilise news brands are more effective than those that don’t. Spending at the right level can reap dividends. While these advertising campaigns generate good profits and news brands do feature in the media mix, profits could be increased by 60% if the average spend in print news brands was raised by a minimum of four to 11 percentage points. Our ‘Planning for Profit’ research shows that with this increase and an average increase of just 1.4% for digital news brands, FMCG brands could release a potential profit of £246 million. All of this shows that news brands would be a very smart investment for supermarket campaigns!
If you want to find the right level of investment for both print and digital news brands to drive the best profit for your campaign, try our PROI optimiser.
For more detail on how news brands can drive advertising effectiveness in FMCG campaigns, check out our category deck here.