By: Tom Hespos
Q: How much do we need to spend in digital to get a gauge on sales lift?
A: An investment of $300,000 over three months.
Just a few years ago, whether a CPG or OTC product could get an idea of what digital display advertising could do for its off-the-shelf sales, was a difficult question to answer. It might take a week to find out how much a brand needed to allocate from its budget in order to answer that question.
An accepted method for gauging sales success with digital ads involves using transactional data, usually from the likes of Nielsen or IRI, to see if a group of shoppers who were exposed to a digital ad campaign bought more than a control group. With a stable sample, one could even build a dollar-in, dollar-out ROI model showing how a dollar invested in digital display might result in several dollars in incremental sales.
But structuring a pilot program to get to this projectable ROI often required a number of steps. An ad agency would have to plan an appropriate media campaign, which would need to be vetted by specialists at the shopping data company being considered for the test. Those specialists would have to examine exposure, household penetration of the brand in question, campaign duration, sales cycle length and a number of other variables before feeling confident in a stable read on in-store sales effect.
Just a few years ago, executing all these steps and costing out all these variables might have taken two weeks. And if you’re in the middle of appealing to management for budget dollars to fund programs, that’s two weeks you don’t have.
Thankfully, data quality has improved and panel sizes have increased. Simultaneously, our methods for planning and buying digital display media have been streamlined. As a result, not only have minimum thresholds for household penetration decreased significantly, but we’ve also been able to project minimum campaign sizes more accurately and with less upfront work needed.
The net-net? Set aside $300,000 and three months. If your product in sold on shelf and has reasonable household penetration, that timing and budget represents an assured stable read for just about any CPG or OTC product. Yes, some details of household penetration, geography and sales cycle dynamics will have to be confirmed, but if you need a budget figure today, $300,000 will cover the cost of media, research and a simple one-dimensional report on sales lift.
No more waiting for weeks for media planning propeller-heads and research wonks to confirm a test will produce a stable result. That helps brand and marketing managers who want to know what digital display ads could do for their bottom line.