Boost Your Marketing ROI – 10 Golden Rules for FMCG: Part 1

Fairly self-explanatory, the first part of a two-part article about the things that make for great ROI in advertising. From our collective experience of many years spent measuring ROI in advertising.

1. Size Matters – advertising the biggest product tends to get the biggest sales

ROI is a function of brand size, so the more you sell of your brand, the bigger will be the ROI, other things being equal. This is because media tends to work multiplicatively. Put another way, a 5% uplift on brand of £100m sales is worth much more than a 5% uplift on a brand of £10m sales. Yet the cost of generating that uplift – the campaign cost – is the same in either case. A corollary of this is to ensure your ad haloes across as much of your range as possible.

Of course, sometimes you will want to advertise your smaller brands – typically when launching a new product which, by definition, will not have many sales. It’s as well to set your expectations accordingly.

Size sometimes matters – finding out the hard way

2. Category expaaaandability

We don’t always have the luxury of choosing the categories we support – our product is of a certain type and that is that – but generally the more expandable a category is, the more responsive to advertising will be products in that category. Chocolate is expandable. Fizzy drinks are expandable. Beer is highly expandable. Bread isn’t. Gravy isn’t. You get the idea.

3. Do TV

I’m afraid when it comes to FMCG, TV is undoubtedly the medium that performs best – again, and again. It may differ in other categories but, in consumer goods, TV consistently produces the best ROIs. Of course, a TV campaign is not cheap, and when the brand you’re advertising is too small to afford a TV campaign, you will have to make do with another, cheaper, more divisible medium. Another instance of fortune favouring the large. (Why this should be is a topic for another blog, but essentially, it’s about reach, reach and reach. See our article ‘Reach, Reach & Reach’.)

Yes, it’s a TV

4. Sync with promotions can boost your uplift – but at a cost of margin

Should we align media with promotions? Yes, and no. In principle, the double whammy of advertising a product when it’s discounted can work together to give you super-charged uplifts from your ads. However, this is immediately offset in financial terms by the lower margins you make on a promoted product. Which effect is greater? It depends critically on your promotional margin and costs.

There’s another, subtler, point to consider. If you don’t promote your product when you’re on air, what is going to happen to that promotional slot in the retailers? Maybe it will sit empty (unlikely) or be occupied by another category (more plausible), but make sure it’s not going to be taken by your main competitor. You don’t want to drive shoppers to the aisle, only to see them lured away by your competitors’ promotions.

5. Show the product – clear pack shots, sumptuous products shots trump beautiful stories

Direct evidence here. We tested two creatives for the same product. The one featuring the simple, but effective, trick of showing the product repeatedly, with frequent voiceovers saying the word ‘chocolate’ vastly outperformed the more sophisticated, story-based one. Art, it wasn’t, but it did work.

Think of it this way. When’s the last time you were in a restaurant and chose your meal based on an elegant story about an authentic moment in the lives of other people who chose that meal? Ok, you probably didn’t look at a picture, either (unless it was THAT sort of restaurant), but I bet you read a description of the ingredients, replete with superfluous, exotic-sounding adjectives, that made your mouth positively drool. And, if my words haven’t convinced you, check out this bad boy.