There are always several factors influencing marketing and advertising spend. So how is the emergence of AI and other factors impacting ad spend in the CPG industry? What are the key consumer trends and how have investment priorities changed this year? A recent survey from Mediaocean reveals the answers.
Marketing and advertising spending is constantly influenced by global events, new technologies, the economic and employment environment, and consumer sentiment. So how is the emergence of artificial intelligence (AI) and the current economic climate impacting advertising spending, especially in the consumer packaged goods (CPG) industry? How are CPG companies and professionals leveraging AI in their daily work? What are the key consumer trends this year? And have investment priorities changed this year? To answer these questions and more, Mediaocean recently conducted a survey. Below are some key insights:
CPG industry optimistic this year
The survey found widespread optimism across the CPG industry this year. Marketers are gearing up for an active year, with the majority of respondents planning to maintain or increase spending across all channels. TV and print are the only channels where more people said they will decrease spending than increase it, indicating that advertisers are focusing on a diverse mix of media channels and are placing an emphasis on omnichannel execution.
Do CPG marketers plan to increase, decrease or maintain spending on each channel?
Source: 2024 CPG Advertising Outlook Report Open a new window
While most channels are growing, a few platforms are expected to see exceptional growth. The CPG industry continues to see a surge in investments, with digital display and video, social media, and connected TV (CTV) leading the way. Some 72% of respondents plan to increase spending on digital display/video this year, followed by 67% on social media and 56% on CTV.
E-commerce is the most important consumer trend
According to 57% of survey respondents, e-commerce everywhere is the most important consumer trend this year. The dominance of e-commerce everywhere means CPG marketers must prioritize online channels, optimize their digital presence, and use data-driven insights to effectively engage with consumers.
In addition to e-commerce, generative AI became a key trend, coming in third place with 55% of respondents mentioning it. It’s clear that the rise of ChatGPT and other AI apps built on large language models (LLMs) has captured marketers’ attention, with resource allocation following suit.
CTV/streaming is another area of rapid growth, alongside TikTok and social video, a trend that portends significant investment from companies looking to connect with consumers through sound, sight and movement.
AI is being used more for research and analysis than content generation
How are CPG companies using generative AI in marketing? Data analysis (41%) and market research (29%) were the top uses. About 25% of respondents said they use it for copywriting, 12% for image generation, and just 9% for customer service.
How CPG Marketers Can Use Gen AI in Their Marketing
Source: 2024 CPG Advertising Outlook Report Open a new window
Although AI is powerful, it has poor understanding of tone and context, which impacts the quality of the content it generates, and AI-generated content lacks the emotional depth and creative nuance of human-created content.
Performance-driven paid media is your most important investment
Given the current macroeconomic situation, some advertising functions and media investments have become more important. Performance-driven paid media took the top spot as the most important investment, cited by 62% of respondents. That said, brand advertising remains a core function, cited by 45%. Clearly, a full-funnel approach is the way forward for CPG brands.
According to 59% of respondents, measurement and attribution are also essential components of advertising capabilities and media investments. This is especially important in an era when cookies are being phased out. For a long time, cookies have been the trusted source of information for data-driven advertising. Without access to cookies, several consumer segments become invisible to advertisers and publishers. For marketers to prepare for the new reality, it is important to evaluate and test new measurement methods and be prepared to implement alternative solutions.
Read more: Marketing pros are mostly optimistic about AI, but have some concerns
The gap between media and creativity remains
94% of respondents said their creative and media technologies and processes are not fully synchronized. This gap is caused by the industry’s over-emphasis on media at the expense of creative, especially when consumers respond to and value customized experiences. Addressing this gap represents a huge growth opportunity for brands.
The creative-media gap manifests itself in three ways:
Siloed teams, technologies and processes create inefficiencies with rising costs and slower time to market. Repetitive messaging and irrelevant interactions are reducing consumer response. A lack of creative intelligence makes it difficult to know what content will resonate.
Closing these gaps requires the implementation of an independent adtech platform specifically designed to increase creative relevance and activation across diverse marketing channels.
Conclusion
This year is shaping up to be a year of creativity and innovation for CPG marketers. Despite the significant changes in the macroeconomic environment in 2023, optimism prevails in the advertising industry. Marketers and advertisers have indicated their intention to maintain or increase spending across most digital media channels. Generative AI, especially ChatGPT, has captured everyone’s attention, resulting in a shift in focus and resource allocation. Measurement and attribution capabilities are gaining importance, along with concerns about the deprecation of cookies that make measurement difficult. Additionally, there is a large gap between creative and media execution. Therefore, marketers should consider innovative methodologies and creative adtech platforms this year to gain a competitive advantage.
How can you make the most of technological innovation to stay ahead of the competition? Share on FacebookOpens in new window. XOpens in a new window or on LinkedIn opens in a new window. We’d love to hear from you!
Image credit: Shutterstock
About Retail Advertising
Decoding Marketing Metrics: Old and Emerging Trends
Media and data collaboration outlook for 2024
Predicting Retail Profitability in 2024: Key Differentiators
Three preventative measures to protect your retail business
How to Deal with Bad Bots in Online Retail
