Growing use of digital marketing in consumer package goods (CPG)

One of the sectors you don’t hear as much about when the conversation turns to digital marketing and ecommerce is CPG digital marketing. Let’s face it- when you think diapers and face cream, you usually don’t think about gateways or PPC. But that’s changing.  In fact, one of the most exciting searches I have underway right now in my CPG digital marketing recruiter practice is with a mid-sized consumer packaged goods company, or “brand manufacturer.” Companies like Nike, Steve Madden, L’Oreal and hundreds of other large brand manufacturers have been selling direct-to-consumer for years, and many through Amazon.  But among the smaller players there is a seismic shift underway, my current client being a case in point.

Up until just a few years ago, the focus of their marketing strategy was in traditional marketing channels such as print (particularly FSI’s), direct mail and radio. It wasn’t very measurable, but it helped elevate brand awareness in a product category crowded with established competitors. My client told me that they estimated their FSI coupon response rate to be around .3%, which she said was typical for the type of household cleaning product they manufacture and market. Then they begin to experiment with digital coupons. She said overnight, response rates soared by 25X, to 7%. She vividly remembers when her team first reported these results to senior management, most of them hardened career brand marketers who knew as much about digital marketing as they know about 5th Century Monarchs of Crimea. It took some kicking and screaming, but most of them eventually came to accept the fact that the digital revolution was not just a passing fad, and was here to stay.

Fast forward to 2016. More than 70% of their marketing spend is now dedicated to digital across a wide spectrum of channels. What a difference a few years makes!  They now focus on a consistent customer experience across all customer touchpoints, they are upgrading platforms and systems, and they’re currently developing mobile websites to engage with their audience anywhere, anytime they want to buy. In just a few short years, their marketing strategy has moved from being predominately product driven- a “build it and they will come” philosophy- to one that is decisively more consumer driven. That strategy has helped them expand market share and grow profits. Not an easy transition for a global organization where executives had been breathing the same air for decades. And I give a lot of credit to my forward-thinking candidate who has led this sometimes painful but necessary organizational transformation.

You may be wondering: With all of the exciting action going on in digital marketing in other industries like high tech and retail, why am I talking about a stodgy old-school company run by a bunch of old school, risk averse, stick-in-the-mud type marketers?  I’m glad you asked. CPG digital marketing is still in the early innings, and there are hundreds upon hundreds of smaller and mid-sized players who have barely dipped their toe into the digital pool. It’s an economic force to be reckoned with: A report by McKinsey and Company says CPG digital marketing will continue to grow strongly. In fact, they expect that over the next decade, the world will gain the equivalent of another 81 Procter and Gambles, many of them in the United States. McKinsey sees the online channel accounting for as much as nearly one-third of total CPG sales growth in the next five years. Practically every digital marketer I speak with who joins a new company tells me that one of the key factors that drove their decision was the opportunity to make a difference. Digital marketers, by definition, are change agents, and there aren’t too many economic sectors that have such strong growth prospects, and where the opportunity to have an impact on a business is greater, than in CPG. CPG digital marketing leaders still have many flags to plant on the digital landscape as they can no longer afford to be laggards, and that means huge opportunities for digital marketing flag bearers. The search I referenced earlier is one of several I have conducted for CPG clients this year alone, and it represents one of my fastest growing search categories.

If you’re in digital marketing and/or ecommerce, watch for new CPG digital marketing opportunities to come from a brand manufacturer/marketer near you.