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Why a recession is a good time to ramp up marketing

October 10, 2019

Robert Beatus


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After a record 10-years plus of economic growth, the U.S. and other parts of the developed world are starting to worry about recession. If history is any guide, many retailers and CPGs will take a close look at their marketing spend as a potential source of savings should growth falter. In doing so, they may be missing an opportunity to invest for the long term and to build market share.

Companies have typically reacted in two ways to a slowdown: they cut costs across the board, including marketing, and they seek to optimize the remaining marketing spend, focusing on activation and ignoring brand. This is short sighted. Brand is a key determinant in the path to purchase, while brand loyalty is expensive and time-consuming to build, but easy to squander. As an article in the Harvard Business Review (HBR – How to Market in a Downturn) put it, “Building and maintaining strong brands—ones that customers recognize and trust—remains one of the best ways to reduce business risk.”

READ ALSO: Power-up your Marketing Mix with brand expertise and data science

There are other advantages to continuing to maintain marketing spend during a slowdown. Competitors may cut back, allowing others to capture a larger share of voice. As demand for advertising space declines, media pricing becomes more favorable to the buyer, meaning you get more impact for the same amount of money, or the same amount of impact for less money. In short, there’s a chance to capture market share.

We know of one consumer retailer that decided to cut its media budget by about 15% and to reallocate significant parts of the remaining budget from brand building to activation. The idea was to invest more in price promotion, drive short-term sales, and cut costs. (The decision was not based on media or sales modeling optimizations.) The result was a drop in sales of almost 10% the following year and even more damage to the brand. Later analysis showed that media investment had contributed about 20% of sales and that investments in traditional brand building channels had been an important part of the program’s overall effectiveness.

In that same Harvard Business Review article, the author wrote that, “marketers may forget that rising sales aren’t caused by clever advertising and appealing products alone. Purchases depend on consumers’ having disposable income, feeling confident about their future, trusting in business and the economy, and embracing lifestyles and values that encourage consumption.” All these are challenged during a slowdown – making brand a more important factor in whether a customer stays with your product or finds an alternative.

“CMOs across the board are seeing shrinking budgets and increasing expectations. And with that, demand for more transparency around how their marketing investments are performing and effecting their long-term brand is more important than ever,” says Robert Beatus, Head of Research Design at Nepa. “Understanding today’s complex shoppers requires sophisticated analytical techniques like Marketing Mix Modeling (MMM), Attribution Modelling and other emerging marketing analytics.”

READ ALSO: What is brand tracking and why is it important?

One of the most promising analytical methods to recently develop is the space of Path-to-Purchase (P2P) analytics. It helps marketers measure changes to shopper psychology, as priorities are reassessed and new behavior patterns emerge, based on the touchpoints and combinations of touchpoints they experience on the way to buying a product or service. In a recession, shoppers are more open to switching brands or retailers, and P2P can help identify the reasons for that switch. As it does so, it simultaneously improves the ability to invest in the touchpoints that increase conversion, always an important function, but even more important during a slowdown.

On the corporate balance sheet, marketing is often treated as an expense rather than as an investment. In practice, it is an investment in the future growth of the company. Investing in marketing during a recession may allow a retailer or CPG company to expand market share, attract new consumers, and position its products for faster growth when the recession ends.

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Consumer journeys become more and more complex

May 26, 2017

Robert Beatus


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And changes in behavior happen faster than ever. Consumers learn about products, compare prices, share opinions, consume content, and make their decisions where and when it best serves them on their consumer journey – their path to purchase. Different websites, devices, store channels and media types (both online and offline) interact to impact consumers throughout their journey. This forms the consumer experience that is ultimately decisive for the success or failure for brands and retailers.

To make things even more complex, consumers’ paths to purchase are highly different for different consumer segments, purchase channels and shopper missions. Most CPG (Consumer Packaged Goods) giants and top retailers agree with the importance of an omnichannel perspective on the consumer experience. However, most of them have yet to move beyond single-channel tactics.

The gap between online and offline shopper insights

There is one big challenge that companies who do not choose to move into an omnichannel perspective face. It is the lack of easy-to-implement and robust research methods to ultimately measure consumers’ omnichannel paths to purchase. Which online and offline touchpoints should be prioritized for brand building and ultimately conversion? Currently, most CPG companies have a good understanding of how their shoppers are behaving; both online and offline. However, this understanding often does not link the online and the offline world together. It also does not link how shoppers are interacting and behaving across the entire Path to Purchase.

READ ALSO: Benefits of Path to Purchase analysis

There are several reasons why marketing research methods are not able to uncover the omnichannel path to purchase.

Let’s go through the most common approaches:

1. Self-stated surveys, after completed purchase

The most traditional way of researching path to purchase is asking consumers about their Path to Purchase, the touchpoints they’ve encountered leading up to purchase, and the impact they’ve had on them. This method allows for mapping of typical Paths to Purchase, including all types of touchpoints. However, it is difficult for people to simply tell which specific touchpoints made them take a specific action. Thus, this method gives very limited insight into the impact of different touchpoints.

2. Monitor consumers’ digital behavior

This method has a higher validity since it’s based on actual behavior. However, it only links to online behavior not capturing the interaction between online and offline interactions, missing the central omnichannel aspect of path to purchase. Moreover, in general companies do not have access to online purchase data from different e-retailers, making conversions impossible to capture. Another consideration for this approach is that it generates a TON of data – so be sure to probe an agency on their data engineering and data science chops.

READ ALSO: Brand research: What is it & why is it important?

3. Qualitative research

Focus groups, online diaries, or in-depth interviews enable research to dig deeper into consumers reasoning and motives behind behaviors. Qualitative methods are therefore widely used to understand Path to Purchase. The main problem with using a qualitative approach is that it does not quantify either your finding or measure the impact of individual touchpoints.

4. Marketing Mix Modeling (MMM):

In this method, advanced statistical modeling is applied on historical data on media spend and sales. Marketing Mix Modeling does not rely on surveys, and as such is free from any research biases. It also allows for understanding the impact of individual touchpoints which guides media planning. However, MMM requires high quality time series data of all relevant media spend and sales. This is difficult for media owners to get a hold of.

Further, relying on historical media spend, MMM can only assess the media channels used by the advertiser historically, not revealing anything about the potential of new media channels, nor touchpoints that can’t be quantified by media spend (e.g. recommendations from friends, or key category influencers). Moreover, interactions between and sequences of touchpoints are very difficult to capture with MMM.

Do you recognize the challenges above?

I understand if it’s hard to find a research methodology to capture Path to Purchase across channels. Please share how you have solved this situation by writing in the comments section. Otherwise, you’re most welcome to get in touch with me to discuss this subject.

What methods does your company use to understand Path to Purchase?

Nepa´s approach to map consumers’ omnichannel Path to Purchase is to use both monitored and self-stated data. We do this by collecting individual single source data (both attitudinal and behavioral) through a focused panel of respondents for a limited time period (via web scraping, browser monitoring, app monitoring, and a self-reporting portal).

This way we can capture all touchpoints that consumers interact with, as well as their actions (e.g. makes a store visit or purchase) not limited to bought media or owned channels. By modeling this data, we help our clients understand the impact of individual touchpoints and the combinations of them. As a bonus, we use trigger-based surveys to capture motivations behind actions and experiences of touchpoints. The output allows for:

  1. Optimizing marketing budget.
  2. Informing campaigns and content strategies.
  3. Informing retailer-specific insights. All insights are omnichannel context, and are not limited to bought media touchpoints.

“The output gives our clients an actionable framework to make market-by-market decisions about how to focus their media, marketing, and sales investments along the Path to Purchase.”

I help businesses to thrive with customer-centricity by utilizing the power of continuous consumer insights. There is no end to what you can achieve with real-time consumer insights, customer feedback, and footprints. Do you want to know more about our approach or share your view on these challenges? You’re most welcome to get in touch with us. 

Robert Beatus
Head of R&D at Nepa

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Omnichannel Perspective on Path to Purchase

February 23, 2017

Robert Beatus


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Consumer journeys become more and more complex

and changes happen faster than ever. Consumers learn about products, compare prices, share opinions, consume content, and make their decisions where and when it best serves them on their path to purchase.

Different websites, devices, store channels and media types (both online and offline) interacts and impact consumers throughout their journey. This forms the consumer experience that is ultimately decisive for the success or failure for brands and retailers. To make things even more complex, consumers paths to purchase are highly different for different consumer segments; purchase channels and shopper missions. Most CPG (Consumer Packaged Goods) giants and top retailers agree with the importance of an omnichannel perspective on the consumer experience. However, most of them have yet to move beyond single-channel tactics.

READ ALSO: Benefits of Path to Purchase analysis

The gap between online and offline shopper insights

There is one big challenge that companies who do not choose to move into an omnichannel perspective face. It is the lack of easy to implement and robust research methods to ultimately measure consumers’ omnichannel paths to purchase. Which online and offline touchpoints should be prioritized for brand building and ultimately conversion? Currently, most CPG companies have a good understanding of how their shoppers are behaving; both online and offline. However, this understanding often does not link the online world to the offline world together. It also does not link how shoppers are interacting and behaving across the entire Path to Purchase.

There are several reasons why marketing research methods are not able to uncover the omnichannel paths to purchase.

Let’s go through the most common approaches:

  1. Self-stated surveys: The most traditional way of researching path to purchase is asking consumers about their Path to Purchase, the touchpoints they encounter, and the impact they’ve had on them. This method allows for mapping of typical Paths to Purchase, including all types of touchpoints. However, it is typically difficult for people to simply tell which specific touchpoints made them take a specific action. As a result, this method gives very limited insight into the impact of different touchpoints.
  2. Monitor consumers’ digital behavior: This method has a higher validity since it’s based on actual behavior. However, it only links to online behavior not capturing the interaction between online and offline interactions; which is the central aspect of omnichannel paths to purchase. Moreover, companies do not have access to online purchase data from different e-retailers which is why conversions cannot be captured.
  3. Qualitative research: Focus groups, online diaries, or in-depth interviews enable research to dig deeper into consumers reasoning and motives behind behaviors. Qualitative methods are therefore widely used to understand Path to Purchase. The main problem with using a qualitative approach is that it does not quantify either your finding or measure of the impact of individual touchpoints.
  4. Marketing Mix Modelling (MMM): In this method, advanced statistical modeling is applied on historical data on media spend and sales. MMM does not rely on surveys. Therefore it is free from any research biases. It also allows for understanding the impact of individual touchpoints which guides media planning. However, MMM requires high quality time series data of all relevant media spend and sales. This is difficult for media owners to get a hold of. MMM is also limited to the media channels used by the advertiser historically. Moreover, interactions between and sequences of touchpoints are very difficult to capture with MMM.

READ ALSO: Brand research: What is it & why is it important?

Do you recognize the challenges above?

I understand if it’s hard to find a research methodology to capture Path to Purchase across channels. Share how you have solved this situation by writing in the comments section. Otherwise, you’re most welcome to get in touch with me to discuss this subject.

What methods does your company use to understand Path to Purchase?

Nepa’s approach to map consumers’ omnichannel Path to Purchase is to use both monitored and self-stated data. We do this by collecting individual single source data (both attitudinal and behavioral) through a focused panel of respondents for a limited time period (via web scraping, browser monitoring, app monitoring, and a self-reporting portal). This way we can capture all touchpoints that consumers interact with. As well as their actions (e.g. makes a visit or purchase) not limited to bought media or owned channels. By modeling this data, we help our clients understand the impact of individual touchpoints and the combinations of them. As a bonus, we use trigger-based surveys to capture motivations behind actions and experiences of touchpoints.

“The output gives our clients an actionable framework to make market-by-market decisions about how to focus their media, marketing, and sales investments along the Path to Purchase.”

I help businesses to thrive with customer-centricity by utilizing the power of continuous consumer insights. There is no end to what you can achieve with real-time consumer insights, customer feedback, and footprints. Do you want to know more about our approach or share your view on these challenges? You’re most welcome to get in touch with me.

Robert Beatus
Head of R&D at Nepa