CPG Advertising is About to Change Forever

4 Min Read

Consumer packaged goods, or CPG, have long been a staple of television commercials – but these days they’re spending less. A lot less.

Between January 1^st and August 31^st of 2021, CPG manufacturers – excluding alcohol brands – spent $4.6 billion on national linear TV ads. That’s a 6.1% decrease from just the same period the year before, according to TV ad measurement and analytics company iSpot.tv. While 6.1% may not sound like much, that’s a pretty big drop for a type of product that’s both pandemic-proof and more popular than ever. While there are a few theories for the drop in spending, the reality is that many CPG manufacturers are shifting more and more ad dollars to digital mediums like Connected TV – and learning it gives them more insight into their customers than ever before. Heads up, CPG brands. The advertising game is about to change.

The Pandemic Push

While the pandemic has been brutal for almost every industry imaginable, the CPG industry did remarkably well. When restaurant attendance went down, more people ate at home – boosting sales of snack food and canned soup, along with post-dinner kitchen supplies like paper towels and cleaning supplies. When bars closed and stress levels rose, alcohol sales hit all-time highs. These spending habits aren’t reversing anytime soon. Global packaged food and beverage brands are now expected to increase ad spend on digital channels by 7% per year until 2023 – and TV, radio, newspaper, and magazine ads are expected to decline further. And at the forefront of these digital channels is Connected TV.

Rethinking CPG Ad Delivery

CPG brands are unique amongst their peers because they traditionally don’t sell directly to consumers. Instead, they advertise on billboards, linear TV, radio, or other mediums to drive the consumer to a store. Previously, CPG brands advertising on linear TV had to best guess when or what their target audience was watching – for instance, a CPG brand may choose to advertise a kids’ cereal during Saturday morning cartoons. There was no way to make sure the ad hit its audience, so CPG brands spent a lot to cover their bases. It’s a classic case of spending a lot of money to make a little more back.

With Connected TV, these same brands can get better insight into their customers – and remove the guesswork to target them directly. That same kid’s cereal? Instead of choosing what cartoon on what network to throw ad dollars at, they can now zero in on a cereal superfan demographic – and speak directly to them regardless of the programming they’re streaming. Because Connected TV advertising inventory can be purchased programmatically and with an audience-first approach, they can be certain their ads are reaching the intended audience. No guesswork. No wasted money on unseen ads. And no obnoxious kids cartoons (unless you want).

CTV + CPG = A Match Made in Heaven

CPG brands are known for their creative and agile ads – and digital platforms have been a marketing playground for them. Think back to Oreo’s infamous Super Bowl tweet that is still talked about today, or the countless other instances where food and beverage brands hop in on topical subjects. It’s fun, it’s relevant, and it’s clever.

Now imagine those same brands having the ability to target customers, deliver specific ads to specific audiences, touch on hot subjects with a quick turnaround, upload TV ads at will, and track performance in real-time. Connected TV offers strong reporting, deeper insights, and laser-focused targeting. CPG brands can even deliver customized ads for a specific demographic, geographical location, or event – hitting their intended audience with high-quality TV advertising whenever and wherever they’re watching. It’s the best elements of digital marketing and TV-quality ads, and it’s expanding the creative horizons for CPG marketers.

How to Make the Most of CTV

So CPG brands are rapidly shifting their ad budgets to digital channels to efficiently target their intended audience, deliver creative ads, and strategically allocate ad spend. This has led to a need for powerful solutions that can provide comprehensive reporting tools to help brands optimize their campaigns. 

CPG’s embrace of digital advertising is driven by the format’s reporting capabilities, and brands are searching for solutions that can provide a comprehensive analytics suite to assist in decision making. MNTN’s CTV platform, Performance TV, helps CPG brands see a full customer lifecycle thanks to its proprietary Cross-Device Verified Visits attribution model. Cross-Device Verified Visits tracks the user journey after they watch the ad – telling you if a viewer sees your ad then makes a purchase on a site or app within the Verified Visit window you set – regardless of what device they use. 

Televising a Bright Future for CPG

There is no doubt that CTV is changing the way CPG brands think about how they interact with their audience, deliver ads, and measure campaign success. The marriage between CTV and CPG is destined to shake up the industry – and we can’t wait to see what imaginative brands do with it.