A COMMISSIONED STUDY CONDUCTED BY FORRESTER CONSULTING ON BEHALF OF MASTERCARD, JULY 2024 Retail Media Holds The Key To The Future Of CPG Advertising
Executive Summary Retailers are increasingly urging consumer packaged goods (CPG)/fast-moving consumer goods (FMCG) organizations to invest in their retail media networks (RMNs) as a part of larger partnership negotiations. To do so, marketing leaders must determine how best to manage their budgets to include RMNs. However, challenges measuring RMN impact across channels inhibit leaders’ ability to tie RMNs consistently and clearly to ROI. Likewise, internal data teams do not have the right data and insights to understand and optimize RMN investments. To maximize spend, CPGs must accurately test and measure their media investments with unbiased, analytic precision. In a study commissioned by Mastercard, Forrester Consulting surveyed 319 global leaders at CPG/ FMCG organizations to learn more about their current and future RMN use and the analytics necessary to maximize their value. ABOUT FORRESTER CONSULTING Forrester provides independent and objective research-based consulting to help leaders deliver key outcomes. Fueled by our customer-obsessed research, Forrester’s seasoned consultants partner with leaders to execute their specific priorities using a unique engagement model that ensures lasting impact. For more information, visit forrester.com/consulting. © Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®, Forrester Wave, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. [E-59697] Project Team: Rachel Baum, Market Impact Consultant Contributing Research: Forrester’s Technology Customer Experience research group © FORRESTER RESEARCH, INC. ALL RIGHTS RESERVED. 2 3
AUSTRALIA (N=50) Number Of RMN Investments Per Region 1 RMN 18% 4 to 5 RMNs 30% 6 or more RMNs 16% 2 to 3 RMNs 36% UK AND GERMANY (N=112) 1 RMN 18% 4 to 5 RMNs 32% 6 or more RMNs 21% 2 to 3 RMNs 29% CPGs Worldwide Are Investing In Multiple RMNs Overall, 82% of respondent CPGs are investing in two or more RMNs and 50% are investing in four or more. Organizations in North America and Europe have a slight edge with 22% investing in six or more RMNs compared to just 16% of CPGs in Australia. US AND CANADA (N=157) 1 RMN 18% 4 to 5 RMNs 27% 6 or more RMNs 22% 2 to 3 RMNs 32% 5 © FORRESTER RESEARCH, INC. ALL RIGHTS RESERVED. 4 Base: 319 global B2C marketing leaders in the consumer packaged goods (CPG)/fast-moving consumer goods (FMCG) industry Source: A commissioned study conducted by Forrester Consulting on behalf of Mastercard, March 2024
AUSTRALIA (N=50) Annual RMN Spend Per Region 16% UK AND GERMANY (N=112) Annual RMN Spend Reflects Increased Investments In Retail Media Across regions, 66% of respondents are spending US$5 million or more on RMNs annually. Respondents from CPGs in Europe outpace their counterparts, with 75% making RMN investments the equivalent of US$5 million vs. 64% at organizations in North America and 60% in Australia. US AND CANADA (N=157) Less than US$1M Less than €930K Less than A$1.53M 15% 9% US$5M to less than US$10M €4.65M to less than €9.3M A$7.65M to less than A$15.3M 27% 26% 18% US$10M to less than US$20M €9.3M to less than €18.6M A$15.3M to less than A$30.6M 22% 30% 28% US$20M or more €18.6M or more A$30.6M or more 15% 19% 14% US$1M to less than US$5M €930K to less than €4.65M A$1.53M to less than A$7.65M 20% 17% 24% 7 © FORRESTER RESEARCH, INC. ALL RIGHTS RESERVED. 6 Base: 319 global B2C marketing leaders in the consumer packaged goods (CPG)/fast-moving consumer goods (FMCG) industry Source: A commissioned study conducted by Forrester Consulting on behalf of Mastercard, March 2024
RMNs Enable Organizations To Achieve Top Business Goals Importance Of RMNs To Achieving Business Goals By CPG Sector Base: 319 global B2C marketing leaders in the consumer packaged goods (CPG)/fast-moving consumer goods (FMCG) industry Note: Showing top five responses; Showing “Important” and “Very important” responses. Source: A commissioned study conducted by Forrester Consulting on behalf of Mastercard, March 2024 Overall, respondents believe RMNs are integral to achieving traditional business goals like improving customer experience (CX) (79%), deepening brand relationships (78%), and growing revenue (74%), ranking among the top five goals enabled by RMN use, regardless of CPG sector. COSMETICS AND PERSONAL CARE (N=94) HOUSEHOLD AND CLEANING PRODUCTS (N=82) 81% 78% MEDICINE AND HEALTHCARE (N=114) FOOD AND/OR BEVERAGES (N=187) Deepening brand relationships Improving customer experience (CX) Improving customer experience (CX) Deepening brand relationships 79% 82% Growing revenue Growing revenue Growing revenue Increasing customer engagement 75% 74% 70% 74% Gathering customer insights Increasing customer engagement Gathering customer insights Improving customer experience (CX) 74% 72% 70% 73% Increasing customer engagement Targeting new audiences Getting new customers Growing revenue 70% 71% 68% 67% Improving customer experience (CX) Deepening brand relationships Deepening brand relationships Gathering customer insights 79% 77% 76% 77% 9 © FORRESTER RESEARCH, INC. ALL RIGHTS RESERVED. 8
Food and/or beverages (N=187) Cosmetics and personal care (N=94) Medicine and healthcare (N=114) Household and cleaning products (N=82) Offsite 60% 60% 52% 53% 50% 41% 51% 50% 52% 51% 50% 39% 47% 40% 45% 43% 34% 41% 39% 39% 38% 40% 37% 41% 36% 38% 37% 32% Onsite display Promotions/discounts Brand awareness In-store Onsite search Competitive differentiation CPGs Are Using RMNs Across Various Channels Current RMN Tactics In Use By CPG Sector Offsite use is currently the top application of RMNs across CPG sectors. Onsite search is a less commonly used tactic by household and cleaning product CPGs, while the use of onsite display among medicine and healthcare respondents lags behind their peers. 11 © FORRESTER RESEARCH, INC. ALL RIGHTS RESERVED. 10 Base: 319 global B2C marketing leaders in the consumer packaged goods (CPG)/fast-moving consumer goods (FMCG) industry Source: A commissioned study conducted by Forrester Consulting on behalf of Mastercard, March 2024
US and Canada (n=157) UK and Germany (N=112) Australia (N=50) CPGs Rely On Data To Understand The Impact Of Retail Media Spend CPG Data Sources And Analytics Approaches By Region Overall, 80% of respondents report their organization gathers and synthesizes data on the impact of retail media spend in online stores. However, far fewer (54%) are doing the same to understand RMN impact in physical stores — a consistent trend across regions. My organization gathers and synthesizes data on the impact of retail media spend in online stores. 83% 76% 80% When my organization tests marketing creative, we have rigorous controls. 68% 63% 56% My organization gathers and synthesizes data on our marketing strategy’s impact across different retail channels. 67% 67% 76% Our retail partners are pressuring my organization to invest in their RMNs. 66% 73% 80% My organization conducts rigorous financial analyses when reallocating marketing dollars to RMNs. 60% 71% 74% My organization uses insights to shape product decisions (e.g., pricing, packaging, and distribution). 54% 51% 54% My organization gathers and synthesizes data on the impact of retail media spend in physical stores. 50% 57% 56% My organization has strategies to optimize what media formats work in different channels. 45% 38% 38% 13 © FORRESTER RESEARCH, INC. ALL RIGHTS RESERVED. 12 Base: 319 global B2C marketing leaders in the consumer packaged goods (CPG)/fast-moving consumer goods (FMCG) industry Source: A commissioned study conducted by Forrester Consulting on behalf of Mastercard, March 2024
Top Data, Analytics, And Process Challenges By Region We feel like we could improve RMN effectiveness if we knew which creative worked best in which format. Retailers lack self-service capabilities that would enable my organization to gather data in real time. Retailers don’t share enough real-time data, insights, and results (i.e., impact) for my organization to determine the effectiveness of our RMN spend. US AND CANADA (N=157) 80% 73% 73% UK AND GERMANY (N=112) 72% 65% 54% AUSTRALIA (N=50) 74% 78% 60% RMNs Enable CPG And Retailer Collaboration, But Have Room To Improve 15 © FORRESTER RESEARCH, INC. ALL RIGHTS RESERVED. 14 Base: 319 global B2C marketing leaders in the consumer packaged goods (CPG)/fast-moving consumer goods (FMCG) industry Note: Showing “Agree” and “Strongly agree” responses. Source: A commissioned study conducted by Forrester Consulting on behalf of Mastercard, March 2024
US and Canada (N=157) Australia (N=50) UK and Germany (N=112) CPGs Worldwide Are Planning To Build External Partnerships CURRENTLY PARTNERING INTERESTED AND PLANNING TO PARTNER WITHIN THE NEXT TWO YEARS Overall, 64% of respondents are planning to partner with an organization that will help them gather, test, and measure RMN investments, while 16% are currently partnering. While CPGs in Europe are slightly ahead in their current partnership journey, their peers are on pace to catch up. 66% 58% 70% 16% 20% 13% Interest In And Opportunity For RMN Partnerships, By Region 17 © FORRESTER RESEARCH, INC. ALL RIGHTS RESERVED. 16 Base: 319 global B2C marketing leaders in the consumer packaged goods (CPG)/fast-moving consumer goods (FMCG) industry Source: A commissioned study conducted by Forrester Consulting on behalf of Mastercard
The Benefits Of External Partnerships For RMN Strategy Are Far-Reaching Benefits Of RMN Partnerships By Region US AND CANADA (N=146) UK AND GERMANY (N=108) AUSTRALIA (N=50) Better understanding of the impact of brand advertising with RMNs on lift for specific products both in-store and online 72% Better understanding of the impact of brand advertising with RMNs on lift for specific products both in-store and online 65% Better understanding of the impact of brand advertising with RMNs on lift for specific products both in-store and online 67% Better understanding of tradeoff of RMNs vs. different media channels 58% Better understanding of tradeoff of RMNs vs. different media channels 60% Better understanding of tradeoff of RMNs vs. different media channels 61% Ability to conduct more rigorous testing 51% Ability to test potential deployments more frequently and effectively 59% Ability to test potential deployments more frequently and effectively 61% Ability to test potential deployments more frequently and effectively 62% Ability to determine how best to spend money on RMNs to maximize ROI 61% Ability to understand which creative is the most impactful 63% 19 © FORRESTER RESEARCH, INC. ALL RIGHTS RESERVED. 18 Base: 304 global B2C marketing leaders in the consumer packaged goods (CPG)/fast-moving consumer goods (FMCG) industry with RMN partnerships Source: A commissioned study conducted by Forrester Consulting on behalf of Mastercard, March 2024
CPGs With Partnerships Maximize RMN ROI Maximize ROI On RMNs Through Partnerships Though 43% of respondents felt the ROI for their RMN investments met expectations, only 32% felt that it exceeded or far exceeded their expectations. However, respondents who established RMN partnerships are likely to see higher ROI. In fact, half of respondents with partnerships see their ROI exceeding expectations. Not currently partnering (N=265) Currently partnering (N=50) ROI has met expectations ROI has somewhat exceeded expectations. ROI has far exceeded expectations. 47% 28% 24% 32% 4% 18% 21 © FORRESTER RESEARCH, INC. ALL RIGHTS RESERVED. 20 Base: 50 global B2C marketing leaders in the consumer packaged goods (CPG)/fast-moving consumer goods (FMCG) industries at organizations with RMN partnerships and 265 at organizations currently without RMN partnerships Note: Showing three responses. Source: A commissioned study conducted by Forrester Consulting on behalf of Mastercard, March 2024
Conclusion Retail media is one of the fastest growing areas in marketing, and rigorous testing and measurement are integral to adding RMNs to marketing strategies. For continued success, CPGs/FMCGs should: Evaluate the performance of RMNs. Well-designed tests with scientifically matched control groups can help CPGs accurately measure the incremental lifts of investments on both online and in-store sales. Identify the most impactful use cases for retail media. Unbiased analytics can help CPGs determine how to best leverage RMNs, whether for promotion, display, or in-store activations. With rigorous testing, CPGs can determine the most effective ad creatives and formats. Maximize spend to drive growth. With the right tools and partners, CPGs can determine optimal spend, where to spend, and when incremental returns begin to diminish. In turn, CPGs can improve ROI and make the case for expanded budget allocation for retail media. Methodology In this study, Forrester conducted an online survey of 319 respondents. The study began and was completed in March 2024. Note: Percentages may not total 100 due to rounding. ROLE C-level executive 19% Vice president 37% Director 45% ANNUAL REVENUE (US$) More than $5B 31% $1B to $5B 35% $500M to $999M 34% REGION North America 49% Europe 35% Asia Pacific 17% NUMBER OF RMNS 6 or more 21% 4 to 5 29% 2 to 3 31% 1 18% CPG TYPE Food and/or beverages 59% Medicine and healthcare 36% Cosmetics and personal care 19% Household and cleaning products 26% Pet supplies 12% Other 1% RETAIL MEDIA DECISIONMAKING AUTHORITY Final decision-maker for setting and/or executing strategy 24% Part of a team making decisions for setting or executing strategy 38% Influence decisions related to setting and/or executing strategy 38% Demographics 23 © FORRESTER RESEARCH, INC. ALL RIGHTS RESERVED. © FORRESTER RESEARCH, INC. ALL RIGHTS RESERVED. 22
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