Key Metrics to Track CPG Marketing ROI in Ecommerce
Consumer packaged goods (CPG) marketing is unique, with a diverse customer base that purchases online through websites, social media, and in person from retailers. Navigating and understanding the customer’s journey is challenging for even the most seasoned marketers because the customer’s behavior is often unpredictable. CPG products have been historically sold in retailers, making their foray into e-commerce filled with unknowns and challenges, like covering shipping and advertising costs.
Despite those challenges, customers demand online access to their favorite products. That means that it’s a necessary move for CPG to have a presence in the e-commerce space. CPG marketing experts need to start paying attention to key e-commerce metrics to gauge the ROI of their online advertising campaigns. With more now than ever before, CPG is taking up space in e-commerce, which means the people behind CPG marketing would be best served by tracking important metrics.
Why You Should Track Your ROI?
Bottom line: no one wants to waste time, ad spend, and energy on campaigns that don’t work. Tracking ROI is a must if you want to position your brand to be successful. Knowing your return on investment will help you determine which campaigns are the most successful, whether it’s on Meta, Google Ads, or another platform.
Having a clear understanding of how ads perform means that future CPG marketing initiatives will be based on solid information and measurable results. By tracking ROI, marketing dollars can be allocated where they will make the biggest and best impact, resulting in higher profitability, better-optimized budgets, and more successful advertising campaigns.
Tracking ROI will help your overall CPG marketing strategy by ensuring that this component drives sales and optimal results. It will prevent your brand from pouring good money into a bad strategy because you will know exactly what strategies are working and which aren’t. When margins are tight, your brand will be positioned to stay agile, make the best decisions that promote customer satisfaction and sales, and ultimately enjoy long-term success.
The Metrics to Track in CPG Marketing
The following list of e-commerce metrics to track for CPG marketing represents the most influential metrics that can shape current and future digital marketing campaigns. Plenty more metrics can and should be tracked, but the following list represents the must-have data for success.
Customer Acquisition Cost
Customer Acquisition Cost (CAC) is the metric that shows how much money the brand has to spend to acquire a new customer. Knowing how much you spend on each customer will help you price your product, ensure you’re not blowing your budget on unsuccessful campaigns, and optimize your overall online and offline CPG marketing budget.
Conversion Rate
Your Conversion Rate refers to the frequency at which visitors turn into customers. Of course, you want to attract as many people as possible to your e-commerce website. However, if none of them are converting, there is a problem somewhere. This metric can not only help you understand your cost basis for e-commerce marketing efforts, but it can also help shape your pricing model, budget, and sales goals. Especially when considering CPG marketing, when e-commerce margins are pretty slim, ensuring every dollar counts is critical for success.
Average Order Value
Average order value is an e-commerce metric important in CPG marketing because it refers to how much money customers spend on each order. Are they finding value in your product(s) and willing to purchase multiple items at a time? Understanding this customer behavior and its impact on your bottom line is needed for e-commerce success.
Return on Ad Spend
When you spend money on digital advertising, you want to see results. Understanding your return on ad spend is a critical metric for determining the success of your online ads. If your return on ad spend is low, your ads are not succeeding—you’ll want to see higher returns to determine whether an ad is a high performer worthy of your CPG marketing budget.
How Often to Review Metrics?
Marketers are done after a campaign is launched and metrics are tracked, right? Nope! Metrics aren’t a one-and-done process or something that should merely be done with quarterly reports. Constant, regular, and ongoing surveillance and reviews are critical so that you can adapt and adjust ad spend and campaign strategies as needed. Regularly reviewing these metrics must be a permanent part of your CPG marketing strategy.
How to Use Data From Metrics?
What good is the information if it’s outdated? Get regular updates so you can implement changes to your CPG marketing e-commerce strategy when it matters, allowing your product to stay competitive in the space. Optimize your strategy to produce the best results at the lowest cost. Discover customer purchasing behaviors, evaluate the efficiency of your digital advertising spend, and know if you’ve created an effective ad campaign.
Knowledge is power, and getting the data from these key metrics and more will help your brand fully understand its CPG marketing performance and how much of a return you’re securing.
Additionally, obtaining e-commerce metrics will help your marketing efforts be more successful in the long run because you’ll learn what adjustments to make to position your brand for success.
Get Help With CPG Marketing
Although e-commerce may be a tricky space for the CPG market, when effectively marketed—a direct result of understanding the customer’s buying journey, knowing the efficacy of your marketing campaigns, and adapting to what the data dictates is necessary—CPG can enjoy tremendous success in the vertical. If your CPG marketing strategies need help, contact Idea Marketing today to learn what we can do to transform your strategy and deliver results.