The U.S. retail landscape is growing increasingly challenging, and fast-moving consumer goods (FMCG) companies are facing mounting pressure to prove the ROI of their ad campaigns. And with growing pressure from private-label offerings, they’re also increasingly tasked with answering whether “brands still matter.”
In truth, FMCG products are a big part of our everyday lives. Items like toothpaste and laundry detergent play an obvious functional role for consumers, while products like snacks and beverages often have emotional ties with consumers—they can even bring back a cherished childhood memory. Many of these products have been around for decades, but while many household brands may have stayed the same, the marketplace has not.
According to the Cadent Consulting Group, the U.S. consumer product companies spend around $225 billion on marketing each year. And as consumer behavior has evolved to incorporate digital channels, so too has the need for marketers to shift their strategies accordingly. The continuous growth in the digital space has dramatically changed how consumers interact with brands—and the proliferation of new channels and devices continues to create complexities new opportunities.
The digital space is a natural fit for FMCG marketers, and digital campaigns have a strong track record of delivering targeted messaging to an engaged audience. with the ability to reach consumers on the devices and platforms where they are increasingly spending their time. Nielsen Digital Ad Ratings Benchmarks & Findings have consistently provided advertisers and publishers with a way to understand if ads were reaching their intended audience, and our research has found that generally, digital ad campaigns have a 60% average on-target rate for reaching their intended audiences.
The on-target rate in the FMCG industry is even higher among key consumers. For example, our data shows that from fourth-quarter 2014 through first-quarter 2018, FMCG campaigns targeted at people between the ages of 18 and 49 reached their intended audience at a rate of 69%, which was higher than other age brackets compared to the industry average. With the continuous evolving needs and habits of consumers, businesses need to re-evaluate their assumptions about the purchasing behavior of the masses.
When we look at on-target delivery across genders, our research shows that digital ads continue to find a higher success rate in connecting with females in this group, reaching their intended audiences 51% of the time, versus 44% among men in the 18-49 age bracket. This could be a result of the demographic shifts in the overall population, which may contribute toward the behavior of consumers.
But brands need to be mindful of more than just differences in on-target rates among men and women. Notably, they need to be aware of changes in the country’s shifting demographics overall, largely because we continue to observe changes in household sizes and family dynamics—both of which are key factors to consider during campaign planning. For example, about a quarter of couples who live with children younger than 18 are in families where only the father works. This marks a dramatic change from years prior, when, according to Pew Research, almost half of these couples (47%) were in families where only the dad worked. With roles and responsibilities continuously evolving, FMCG brands need to understand how to connect with consumers effectively and efficiently.
The insights in this article were derived from the following sources:
- Nielsen Digital Ad Ratings U.S. Benchmarks And Findings: Q4 2014 Through Q1 2018
- Pew Center Research Center analysis of Current Population Survey, Annual Social and Economic Supplements (IPUMS)
- Pew Research Center analysis of 1960-2000 Decennial Census and 2010 and 2014 American Community Survey (IPUMS)