The pandemic threw a monkey wrench in the economy as we once knew it, and it’s continuing to be disruptive, specifically for the CPG (consumer packaged goods) industry. With more families at home than ever before, demand for packaged foods and drinks, cleaning, fitness, and organizational products soared in early 2020 and has remained stable ever since. 

While high demand is usually a positive thing for businesses, scarcity of materials (like aluminum), congested seaports, lack of factory workers, and MIA truck drivers have led to shortages of many CPG items across the nation. However, even with these obstacles, the CPG brands that leaned heavily into advertising saw healthy growth last year. Read on to discover how CPG advertising has changed, the top challenges that must be addressed for success, and our predictions for the future of CPG advertising.

How CPG Advertising Has Changed 

As consumers are now buying more packaged goods than before and technology has changed the way people shop, CPG advertising has also shifted. At the height of the pandemic in early 2020, 87% of consumers reported spending more time on digital media. Streaming doubled, and social media, video, and messaging apps have seen a 20% increase in weekly time spent on mobile devices. Web browsing increased 70%, and social media consumption went up 61%; Brands that embraced these changes, prioritized brand awareness, and integrated creative marketing strategies to overcome obstacles were rewarded while brands that continued with the status quo suffered. Discover the top CPG advertising trends and challenges below. 

Top CPG Advertising Trends & Challenges 

Tight Advertising Budgets

As the supply of CPG products hangs on by a thread and advertising budgets are cut, CPG marketers have no time or money to waste on ineffective strategies. CPG advertisers should shift to an agile marketing model that allows quick campaign launches with dynamic targeting and customization. Ads should be tested for effective messaging continually. Marketers must personalize ad content with consumer data and analytics to inform content type, time, and placement. 

To put this in perspective, just look at the mashed potato brand, Idahoan. Idahoan experienced a huge surge in demand at the beginning of the pandemic but knew that demand wouldn’t stay high without marketing strategies to support long-term growth. The Idahoan team strategized ways to encourage people to use Idahoan products and ultimately become repeat customers. They identified a variety of buyer segments online, served them recipes correlated to their family demographics on a variety of channels, and tested the results over time. Using these strategies, CPG advertisers can avoid costly and ineffective campaigns while retaining stable growth over time.  

Measurement Struggles 

Measuring CPG advertising effectiveness is no simple task, yet one that many brands do not do properly, if at all. CPG brands can get lost in a sea of numbers with so many metrics to consider. To combat the overwhelm, we suggest that CPG brands focus on one category that matters more this year than it ever has: brand loyalty. Brand loyalty was malleable in the early days of COVID; however, brands that worked diligently to retain it saw a considerable ROI. According to Motista, if customers establish an emotional connection with your brand, they have a 306% higher lifetime value.

Some metrics to track within this category include: 

  • Percentage of buyers new to the category
  • Percentage of repeat buyers
  • Percentage of brand switchers
  • Average spend per trip for shopper

Ineffective Targeting & Messaging

In 2022, CPG companies need to go where their customers are to deliver marketing messages that matter. For example, in 2022, most customers will use mobile, tablets, or even VR devices. Brands must also align their marketing efforts to the way consumers are buying products—for example, e-commerce, mobile ordering, and pickup. CPG brands should go all-in on digital video ad products, digital audio and podcasts, and interactive kiosks to meet customers where they’re at. 

Even marketers that get the location right need to rely on moving data sets to ensure that their message resonates. CPG marketers must continually gather customer feedback, test different ads to specific demographics in real-time, identify key influencers, and leverage high-powered analytics for ultimate success. 

CPG Advertising In 2022 & Beyond

Though change is the only constant in this world, 2022 is a year for CPG marketers to remain positive and proactive. Demand for CPG products like boxed mac n cheese, cleaning spray, and shampoo is way up, and with the pandemic raging on into its third year, we don’t suspect the desire for packaged goods will slow down any time soon. 

Even amid supply chain disruptions and shifts in consumer shopping behaviors, CPG advertisers can prevail with the right strategies. Tight advertising budgets can be maximized with agile marketing methods, ad testing, data-driven messaging, timing, and placement. Measurement struggles can be mitigated by honing in on crucial CPG revenue drivers like brand loyalty and metrics like the percentage of repeat buyers. Ineffective ad messaging and targeting can be avoided with proper data sets, analytics, and platform selections. 

Looking ahead at the future of CPG advertising, we predict that data collection and utilization will be even more critical for creating personalized experiences. With the massive growth of digital marketing, CPG brands should be collecting customer data all the time. This first-party data can only be obtained by CPG brands with a solid direct-to-consumer strategy that enables them to collect and keep all of their data. As Google plans to eliminate third-party cookies in 2023, CPG brands should take notice and work to invest in their own databases to manage their first-party data from multiple channels.  

Additionally, CPG brands must intimately understand their consumer journeys to meet shoppers on the platforms they prefer. There’s no longer a traditional customer journey, and with the rise of hyper-personalization, brands must use first-party data to drive it. 

Success in the future of CPG requires agility, customer centricity, and data. Combining these elements with the strategies above will enable brands to differentiate and cater to pandemic-ers consumer preferences, so they don’t get left behind.