The growing use of data for advertising in the smartphone era has become an important tool for marketers. The combination of mobile plus data creates the ability to find the right people directly on the device they spend the most time with and to deliver relevant messaging at the right time.
However, there is one industry vertical that continues to struggle to capitalize on these advances. The consumer packaged goods (CPG) industry typically lacks first-party relationships with its customers. Instead, they rely on either their retail or distribution partners for data or third-party technology to help better understand consumer behavior.
For example, many CPG marketers relied on Facebook’s Partner Categories for ad targeting, which let them easily build targeted audience segments from other data sources. When Facebook eliminated this tactic, it made audience targeting across social media much more difficult.
Google also enacted new restrictions on third-party ad serving and pixel tracking on YouTube and changed requirements for its data transfer service with DoubleClick ID. In turn, CPGs have to work harder and find workarounds to leverage many fundamental digital marketing tactics.
There are some alternative approaches that offer promise for CPG marketers such as using both real-time and historical location data and monitoring social media engagement to understand and reach their audience.
Real-Time And Historical Location Data
When advertisers first began using opted-in location data to serve geotargeted ads, the primary focus was on the real-time nature of the data or serving ads based on someone’s current location. For example, for a person that is 3.7 miles from the nearest Dunkin’ Donuts, location data allows advertisers to show someone they are close to this Dunkin’ Donuts and create an offer to drive more interest. This is still an effective advertising strategy for the right campaigns.
By using historical location data, CPG marketers can deepen their understanding of their target audience, as well as reach them with relevant advertising. For example, we helped an agency customer work with their client, a brand with high-end hair care products, to find their target audience by serving offers to previous visitors to higher-end salons. Location data gathered over time also allows them to see which market segments visit the locations where their products are shelved. They can measure foot traffic at these locations to determine which stores should experience higher sell-through and potentially be able to measure online-to-offline campaign attribution.
CPGs and Location-Based Marketing
When most marketers think about location-based marketing and geotargeting, they first think about helping their clients with physical retail locations. Reaching the audiences that visit these locations, or competitive locations, has become an effective digital marketing strategy for many campaigns.
While not obvious at first, there is an opportunity to use location-based marketing to help the brands on the shelves at those retail locations. Finding the audience that visits the specific locations where a brand or a consumer packaged good (CPG) is sold is a growing trend that we’re seeing.
Even though the CPG industry has been cutting back digital ad spend, they’re beginning to re-invest in areas that demonstrate positive results. Using location-based audiences holds promise for agencies and digital sales teams looking to win this business.
Location-based marketing typically takes one of two forms. Real-time geotargeting can be used to reach someone when they’re near a location at the moment. Historical location data can be grouped into audience segments, such as Whole Foods shoppers and pet owners, to reach a target market.
Here are a few examples to highlight how CPG brands can utilize location-based marketing.
- Beauty brands that are sold at hair salons can find and reach the audience that visits these unique hairstylist locations.
- Nest, the maker of the smart thermostat and other smart home products, can reach the audience that visits Lowe’s Home Improvement and higher-end technology stores.
- Slingshot Cold Brew Coffee can reach the audience that visits Whole Foods, The Fresh Market, and other specialty food stores where their coffee is sold.
- Blue Buffalo Cat & Dog Food can reach the audience that shops where their products are sold, like Petco and Petsmart.
Social Media Engagement and CPG Marketing
CPG marketers will also be able to use these audience segments to closely monitor their social media activity and engagements. Social media can give insight into an audience’s attitudes and needs around products, brands and competitors. Corporate transparency is highly valued now more than ever, and brands that build relationships with their target audiences on social media see higher engagement. CPG marketers can utilize social media feedback to refine their campaigns and open up the potential for increased engagement and brand awareness from their audience segments and beyond.
A good example of how a marketer could blend audience data and social media is Nike’s recent campaign featuring Colin Kaepernick. They could evaluate the increase/decrease at their retail locations, measure those audiences over time and blend this data with their social media analytics to determine specific segments they’d want to either win back or reward for their loyalty.
Another specific use case of marrying social media and audience targeting can be found in your Instagram or Facebook feed. Microbrands — small companies that typically sell a few items through their e-commerce websites — are leveraging social media advertising to drive their sales. Despite the size of these companies, their teams frequently make better use of the same sophisticated targeting capabilities that major retailers also have available. By choosing criteria of interests, demographics and location, they’re able to up quickly and create a new “long tail” of retail.
As the mobile advertising industry continues to mature, expect to see more CPG brands making innovative use of location data and social media to understand, reach and convert their audiences. This may be a trend during the holiday shopping season, with these advertising tactics increasingly utilized to convert casual shoppers — especially for the marketers working to meet sales goals at brick-and-mortar locations.
If you’re interested to learn more about using location-based marketing to help brands and CPGs find their target audience, request a demo.
Portions of this article originally appeared on Forbes.com.