Finding the Right Media Mix for CPG Brands
Brands today face tremendous pressure to provide ROI and build brand equity through their marketing investments. CPG brands have the unique challenge of competing against new private label brands from big-box retailers like Target and Walmart, along with changing consumer behaviors.
With potential tariffs and tax cuts leading to more uncertainty in 2025, generating positive marketing outcomes will be even more important. Let's explore how CPG brands can best position themselves to win in 2025 and beyond.
Shift Away from Trade and Promo
In looking at marketing investments across media, trade and consumer promotion, media delivers the highest ROI. Data from over 350 brands shows that media saw an 8% growth in ROI last year. Comparatively, trade saw ROI decline 1% and consumer promotion saw flat ROI despite increases in spending in both categories.
While many CPG brands invest in coupons or trade promotions like special pricing to drive sales, they're no longer worth the investment. Consumer preferences have changed, with many turning to social media for information instead of traditional channels like newspapers.
Given that transition, CPG brands would be smart to shift more of their advertising towards digital media. They'll convert more of their ad spend toward real outcomes, and they can get more innovative in their ad campaigns.
Live Panel
Bradley Keefer will discuss breaking down silos for success on May 7 at Retail Media Summit. He'll be joined by Carli Feinstein of Craft & Commerce and Christen Spencer of Chobani.
For details and registration, visit p2piretailmediasummit.com.
Embrace Search and Social
Digital channels deliver better ROI for brands, especially search and social media. Search accounted for 26% of all media spend in 2024, while social media accounted for 18%. Linear television accounted for 20%, down from 26% in 2022.
Advertisers are turning to search and social media due to their proven ability to deliver consistent returns and growth across industries. These channels also keep them in the conversation among consumers, as they turn to social media and search for cooking tips, product recommendations and recipes.
Investing in search and social media connects them with consumers along the most important parts of the customer journey, which increases the chances of conversion of an advertisement.
Upper Funnel is King
Striking the right balance between top and bottom funnel investment is always important for CPG marketers. Brands need to build both long-term value and drive immediate performance, while optimizing their spending on both sides of the funnel.
Enterprise brands (more than $500 million in spending) are leaning into top of funnel, with 61-79% of their budget allocated there. Meanwhile, mid-market brands take a more balanced approach, with a 47-53% split. Our data shows that enterprise brands are seeing more success with higher top-of-funnel investment, so we recommend that mid-market brands embrace a similar strategy.
Marketers should take a measured approach when shifting spend from bottom to the top of the funnel, as it eases them into the tactics and ensures that they’re not seeing any negative impacts in ROI. The sweet spot is shifting 5% of your budget and evaluating on a quarterly basis until you've reached the 70/30 split.
For instance, a water brand shifted spending from lower-level tactics like linear TV and Google Discovery towards upper-funnel tactics like social media and e-commerce, resulting in an 8.6% increase in revenue, despite spending less overall.
The pressure is on CPG marketers to deliver strong results in 2025. With an unsettled consumer spending landscape, brands will need to maximize their budgets and ensure they're reaching the right audience. By adapting proven media channels like search and social media and top-of-the funnel tactics, CPG brands will have the right marketing mix they need to win this year.
About the Author
Bradley Keefer is Chief Revenue Officer of Keen Decision Systems. As a seasoned startup and growth-stage specialist, Keefer has previously worked at IBM, Profitero and DataWeave. He is committed to enhancing Keen's sales organization across the entire customer journey, encompassing marketing, new client acquisitions, account management, and analytical support to ensure comprehensive client engagement and satisfaction.
