Why FMCG brands need to look beyond linear TV for business success

Cecilie Moseng
By Cecilie Moseng | 26 October 2021
Cecilie Moseng.

Cecilie Moseng, account director, Xandr

For the fast-moving consumer goods industry, or FMCGs as it is known, the goal has long been to achieve widespread brand awareness and, perhaps most importantly, brand loyalty.

Take brand-name pain relievers. Many consumers buy some sort of over-the-counter painkiller, and there’s a reason why they are willing to pay more for a brand name than they are for the generic pharmacy offering. FMCG brands have long relied on ‘top-of-the-funnel’ marketing in mainstream media because that brand awareness and affinity is what drives purchasing decisions and removes price sensitivity, ultimately leading to increased sales, revenue and, of course, bottom-line business goals.

What is less well known is that FMCG advertisers can increase top-of-funnel performance through a multi-channel approach, driven by consolidated planning and, in particular, adding CTV and digital advertising to the mix.

The FMCG market, is one of the few categories to experience surges in consumer spending during the pandemic, as lockdowns and panic shopping (remember those national toilet paper shortages?) continue to take hold. Online shopping in particular experienced significant growth as people shied away from physical stores, and with the government continuing to urge us to shop online for delivery or click and collect, this consumer behaviour is set to stay. The last year has also taught us how important it is to be able to shift marketing execution quickly to keep up with changes in regulation and consumer behaviour that can happen quite literally overnight.

Although ad spend did not match consumer spending growth in 2020 – consumer spending on FMCG jumped by 11% year on year to $173 billion, a 20 year high, while ad spend by FMCG brands declined by 5% – FMCG ad spend is set to rebound by 9% this year to $216 million, eclipsing pre-pandemic spending. In the FMCG sector globally, rising audiences and an investment in ecommerce is expected to drive 7% growth each year in digital ad spend through to 2023. So, where should that ad investment be spent? The answer might surprise some FMCG marketers.

FMCG companies have traditionally achieved their brand-focused goals with linear TV, long the most efficient and cost-effective way to reach a mass audience. Demo guarantees have been highly effective for years, but advertiser needs have changed – as consumers shop both online and instore. FMCG advertisers are increasingly moving towards digital’s more precise targeting and ability to directly connect ad spend to conversions ranging from click-throughs on websites, signups to email lists or checkouts from shopping carts.

To reach target audiences in their entirety, however, FMCG brands need to use both linear and digital sources. The latest PwC Australian Entertainment & Media Outlook 2021 report says it expects SVOD, BVOD and PVOD services to maintain their momentum and grow their revenue, while internet advertising grew by 3.3% to $9.3 billion in 2020. According to the IAB, 4.7m Australians aged 25-54 view internet content on a connected tv every day, giving 45% reach in an important demographic for most FMCG brands.

Traditional TV still draws in high viewership and accounts for most premium video advertising opportunities, but digital TV is becoming increasingly necessary to access to hard-to-reach audiences in key demographics. A ThinkTV study also showed that combining linear TV with BVOD gave between 2 and 2.4x impact on sales compared to combining linear TV with social or YouTube. To maximise reach and cost-effectiveness, however, linear and digital buys cannot be done in silos – buyers need a holistic way to target their audiences across both formats, while also getting the most reach and the least duplication. In essence, they need the biggest bang for their buck.

How can this be achieved? While there is a large focus on “merging” TV and digital, we must shift the focus to building a platform that brings together the different components and ad products buyers need to power the optimal balance between reach and frequency. This is the key to enabling simultaneous planning and buying of these two distinct formats in an efficient way.

Doing so requires technology platforms’ ability to remove workflow friction and solve the differences between TV and digital measurement. Today’s FMCG marketers often take a TV-first approach, using it as a means to easily get in front of as many consumers as possible, and add tactics incrementally to ensure they’re obtaining high reach at the lowest cost in well-lit, brand-safe environments. However, the complex data analysis needed to provide holistic reporting from TV and digital spend represents a challenge for buyers who need to move quickly.

Having integrated reporting that shows the consolidated outcome of all of spend, not siloed by individual channel type, will help marketers make quick decisions and easily understand the media strategies that are working for them. With consumer behaviour shifting rapidly, marketers need a platform that can utilise the most up-to-date data to optimise their spend and maximise their KPIs. Laying the foundation for this unified approach to planning, execution and reporting is what will help connect the dots between those glamourous big brand ads and its true purpose of achieving business objectives.


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