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According to MEI Trade Insight, 87% of CPG brand marketers intend to increase or maintain their spend on trade activities in the year ahead. This stems from a belief that, in these recessionary times, moving more money closer to the shopper is a better way to get more bang for the buck. We have no argument with the “closer-to-the-shopper” philosophy. But in order to make this approach actually work, you have to know what closer to the shopper actually means —and “in the store” ain’t necessarily the whole story.

CPG brand marketers still clamor as hard as ever to get “feature and display” at key retailers. And they pay a hefty price for it. IRI’s data shows that CPG spent $34 billion in 2010 on trade marketing. The Food and Beverage category generated all of 0.6% sales growth on that investment— and no change in basket size, no change in household penetration and no increase in trips. Brands spent $34 billion, and nothing really happened. This is the investment at which marketers want to throw more money?!

So we had to ask, “What’s missing?” The answer is in understanding how the economic downturn and online behavior have evolved the shopper’s path to purchase.

These recessionary times have driven the shopper to be savvier than ever in managing her grocery costs. She knows she can’t afford to shop as she used to, but what has she done about it?

  • She now uses 7.3 information sources (retailer sites, brand sites, on- and offline coupons, reviews, etc.) every week before she goes shopping—this is DOUBLE the information sources she used just a year ago!
  • Her coupon usage has increased 37% since 2008.
  • She hardly ever (only 6% of the time) shops without a list.
  • She decides what she’s going to buy while she’s still at home (83%).
  • She rarely or never goes off list (72%)—even if you have the prized secondary placement at retail.

The “missing link” when it comes to making those huge dollars in trade spend work is to reach the shopper at home and get your brand, especially if its participating in a trade event, on her list. Because if it doesn’t get on her list before she leaves her house, she is highly unlikely to put your brand in her cart—trade event or no trade event. She has disciplined herself not to be impulsive so she can stay on budget.

We’ve identified the problem—$34 billion hasn’t moved the needle—and we’ve identified the solution—reach the shopper at home and get on her list. Now it’s just a question of creating an effective and efficient marketing communications solution. Say “hello” to DATA: Smith Brothers’ Digital Advertising Trade Amplifier.

DATA takes a CPG manufacturer’s trade event calendar and feeds it into an engine that dynamically generates geotargeted digital display ads. These ads carry not only the brand’s core message, but are also customized per retailer and promotion. It brings the voice of the trade-driven messaging back under the brand’s control.

Ore Ida Demo AdHere’s a DATA ad using Ore-Ida® French Fries (for example purposes only) that a Pittsburgh, PA-based shopper might see when she logs into her Yahoo! mail account in preparation for her busy day.

Note the core brand promise: the low calorie count per serving for Ore-Ida French Fries. This “baseline” brand message resides in the DATA engine and can run “as is” anytime. It’s great for building awareness of the Ore-Ida brand and delivering the good news about Ore-Ida French Fries’ surprisingly low calorie count. However, if Ore-Ida has a trade event running at Giant Eagle supermarkets in Pittsburgh, now DATA can give the target shopper the extra knowledge and impetus for action she needs to put the Ore-Ida brand on her list and in her cart: “Buy any 2 varieties of Ore-Ida potatoes and get 1 FREE! At Giant Eagle. Only through Monday.”

The heart of DATA is the dynamic nature by which it builds the online ads in real time based on the shopper’s location. So while the Pittsburgh-based shopper is viewing the Ore-Ida ad and offer at Giant Eagle, a Columbus-based shopper may be seeing the same Ore-Ida equity message with a different offer at Kroger. Smith Brothers has a patent pending on this unique new way to make expensive trade investments pay out more effectively for CPG brand manufacturers and marketers.

DATA is as cutting edge in its pricing as it is in its design. It is licensed by the agency and priced based on the number of impressions served by the engine. This pricing model is comparable to rich media ads that carry a slight premium over standard flash ads—because they work harder. As a licensed product, it doesn’t require changing your agency relationships in order to put DATA to work for your brand.

If you’d like a demonstration of DATA, please contact Smith Brothers’ Director of Shopper Marketing, Greg Smith, at greg.s@smithbrothersagency.com. Find out what’s been missing from your trade and shopper investments.

Michael Bollinger
Michael Bollinger
President

With over 25 years in the advertising agency business, Michael is focused on building the consumer package goods agency of the future - today. One centered on the breakthrough brand storytelling skills of Smith Brothers' creative heritage, but delivered with the speed, efficiency and real-time optimization demanded by today's digital environment.

Michael joined Smith Brothers in 2005 as Director of Client Services, after spending the previous 20 years with DDB Worldwide where he was Senior Vice President, Group Account Director of the global agency's flagship, Chicago office.

Excited by Smith Brothers' creative firepower and entrepreneurial spirit, Michael joined the Smith Brothers’ team with a vision for delivering big agency resources on a dramatically more nimble and effective platform.

Under Michael's leadership the agency acquired digital agency, Hot Hand Interactive, in 2007. It added its Social Media practice in 2008. Developed an Analytics practice in 2009 and a Shopper Marketing practice in 2010.

Layered onto its existing strategic planning, creative and media capabilities, Smith Brothers is now a force in the CPG marketing world – working with brands like Nestle, Del Monte, Heinz, Ghirardelli, Red Bull, and more.

Michael holds a B.A. in English from Union College.