My prediction for the coming year is… conservative and rooted in performance for CPG brands.
This is the time of year when one tends to look inwards; to understand how they performed in the previous twelve months and determine their course of action for attacking the coming twelve and achieving success. This past year was a rough one, to say the least, but it was also an amazingly fulfilling one. On a personal level I got married and had a son; two of the most fulfilling experiences that anyone can ever have. On a professional level our business has continued to grow in the face of adversity while the world around me has witnessed one of the most difficult economic periods of the last 80+ years. I have friends who are out of work and I have colleagues who are fighting hard to make ends meet. I’ve learned a lot about the inner workings of different kinds of businesses and I’ve decided that making predictions in a climate which is so tenuous and conservative could be a futile effort.
That being said, I have one sole prediction to make.
The coming year will continue to be a conservative one; with many companies focusing attention on what they do best, what works well for them, and trying to prove it. This brings me to the one single prediction I will make, which comes a result of introspection and years of experience in digital marketing. This year I predict that someone will finally bring a product to market that can prove the effect of online marketing on CPG purchases (awareness, consideration and intent) by measuring customer and/or shopper card data, leading to a renewed renaissance in online advertising that will bring it to the top position of paid advertising within 8 years (ahead of television).
There are a number of companies that are doing wonderful things with data; tracking shopper card data, taking social media data, tying into credit card data and purchase behavior from other outside resources. Some companies can tell you if the online ads you ran drove incremental sales against new customers or drove incremental sales frequency among existing customers, but only against a limited set of customers and placements. All of these efforts are getting us closer to the holy grail of understanding the effects (in real time) of online exposure to actual sales and applying these across the digital media mix. Many of these companies are focused on banner and display advertising, but once these methodologies are worked out, they could and should be applied to social media, mobile, search and video efforts. The methodology is there; track exposure and interaction through anonymous cookie data and match it to loyalty cards, shopper card and Nielsen Homescan data on a non-personally identifiable basis to create a viable data set that proves the correlation between exposure and sales. These are typically on a finite, niche level right now, but I feel and sense that someone in 2010 will bring to market a viable, scalable solution for this across the industry. Of course this assumption is based on the current environment of government regulation, but if the government moves ahead with regulating online advertising then all of these companies get thrown right out the window and my prediction goes to the wolves.
The silver bullet will be for a data solution to tell me what affect my digital media mix had on sales by tracking post-purchase data. If you, as a partner, can tell me with a 95% confidence level what impact I had on sales, you will get my budget. If you can tell me, isolating offline and online activity, what lift my online dollars drove, you will be in the driver’s seat and you will get the lion’s share of my budget.
Many people are promising this data and there’s a race to finish line that is clearly in site, but I feel like 2010 will be the year because in the last 3 months I’ve met with a number of companies, many of which are eerily close to the solution, with eyes on the final outcome.
Data is the name of the game, and using that data from an analytics perspective is the first place to look, and optimization is the second place. That is my prediction, because if this prediction comes true, then all other media will be playing catch-up. If this prediction comes true then dollars will flow into online from other media, at least until we achieve the proper media mix to work with.
I know that each of you will have different predictions, but what do you think about this one? Do you agree or do you think I’m nuts? Let me know – comment in the Spin Board and share with me what you think!