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The new marketing model for growth: How CPGs can crack the code

The new marketing model for growth: How CPGs can crack the code

A sophisticated, predictive, and customized new marketing agenda is enabling CPG marketers to fulfill their new growth mandate. Here are the key ingredients.

Key takeaways

  • Around 80 percent of CEOs are looking to marketing to drive growth.
  • Data-driven marketing at scale can deliver that growth—consumer-packaged-goods (CPG) companies can deliver 3 to 5 percent growth in net sales and improve marketing efficiency by 10 to 20 percent.
  • To do it, CPG companies need an AI engine, a 360-degree view of consumers, and a fit-for-purpose marketing technology stack to deliver the right message, to the right consumer, at the right moment—all the time.

After a year like no other,consumer packaged goods (CPG) marketers face a hard question: how to power above-average growth in the next normal. E-commerce penetration is still 35 percent above pre-COVID-19 levels, and more than one-third of consumers are continuing to switch brands or retailers.1 The challenge is real, and expectations are high: nearly 80 percentof CEOs say they are looking to their marketing leaders to drive revenue growth.

In interviews at major CPG companies around the world, we asked dozens of marketing and growth executives about this new reality. Their answers were clear: fulfilling an ambitious growth mandate requires a marketing agenda that is far more sophisticated, predictive, and customized than ever before. It requires a different playbook with new approaches and tools that few have yet to fully master. While broad reach, powerful, resonant storytelling, and creativity remain critical, marketers now need to utilize data and analytics at scale to crack the code that enables more targeted and engaging interactions to shape consumer behavior.

As one CPG executive said, “We now live in a world of ‘and,’ where we can have both broad reach and customized relevance, using new, granular, data-driven methods to fuel growth.” In fact, two-thirds of CPG companies say they have put data-driven marketing at the top of their agenda.2

Yet many CPG companies have not yet cracked the code for delivering impact at scale from data-driven marketing. Although they may already leverage data analytics and other technology to personalize marketing for various segments or initiatives, these efforts are not sufficiently pervasive to drive sustainable growth. It isn’t enough to optimize a few demographics or key campaigns. Truly sustainable, marketing-led growth has to be granular, focused, and scaled across the entire marketing organization, delivering “the right message to the right consumer, at the right moment, at the right place—all the time.”

Many CPG companies have yet to fully accomplish this, because it requires a difficult step change in how a marketing organization operates. To thrive in this next era of CPG marketing, companies will have to do several things. First, build a continuously updating, AI-powered consumer-intelligence engine that ingests enough signals and data points to not only identify demand but to predict it. Then, use advanced analytics and marketing technology to recommend high-value actions. From there, learnings from hundreds of tests per week need to feed back into this engine, helping drive rapid decision making and informing adjustments to brand plans, spend allocation, tent-pole campaigns, and always-on activation. All this will require new types of marketing talent, additional data and technology capabilities, an organization-wide embrace of a rapid, agile, test-and-learn mentality, and adjustments to the marketing organization operating model in order to reach at-scale impact.