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Why a lacklustre ‘hygiene-only’ approach can lead to a multitude of sins for FMCG brands
Digital marketing came with the promise of greater accountability and less waste but reports frequently remind us that this is not always the case. In fact, if AlixPartners’ research is to be believed, as much as 60% of brands’ total spend might not lead to any noticeable upward tick in ROI.
It comes as little surprise, then, that FMCG giants, such as Unilever, P&G and Mondelez are cutting back on waste and duplicated effort, culling the number of agencies on their rosters, ‘sweating’ marketing assets and in-housing some roles.
It sounds like a smart idea but there’s a proverbial elephant in the room. Most brands will spend around half of their digital marketing budget on paid search, but they very rarely lift the hood to see if the channel is actually being made to work as hard as it could for them.
The reason? Well, for some FMCGs, management of paid search campaigns often lies behind a legacy agency arrangement that is rarely questioned. The channel requires a lot of hard work on multiple complex campaigns that may be seen to lack the glamour or the margins of television or display and so paid search rarely gets the attention it deserves. Performance reports are limited to a few simple points that leave brands with no idea whether the channel is performing as well as it should.
However, when FMCGs do take the time to investigate, we typically find that around 20% of budget is not being spent as optimally as it should. The good news is that there are usually some fairly straightforward failings behind lacklustre ROI figures which a brand can identify and deal with if they take the time to interrogate what is actually happening.
5 questions to ask
As ever, the quandary for a digital marketing executive is that nobody knows what they do not know. They have no idea if paid search is doing well or just limping along as before. A warning sign that everything’s not as it should be is if your performance reports always look very similar, regardless of changes in campaigns. When you start to notice this, it’s time to ask questions in five key areas:
1. Keywords experimentation?
Typically, underperforming paid search accounts fail to test out new keywords, the same terms just keep on being used month after month. Experimentation is essential, as is an agreement between an FMCG and its retailers over splitting up keyword groups so it is not bidding against one of its retailers for a click.
2. Audience segmentation?
Another sign of lazy paid search is no attempt by an agency to use customer data to refine audiences and reach out to targeted segments via appropriate keywords and bespoke ad copy.
3. Copy changes?
If brands find their paid search advertising copy is too generic and does not change in relation to keywords, or groups of keywords, the chances are that campaigns are unlikely to be compelling and relevant enough to attract interest.
4. Relevant landing pages?
It is always a surprise how many campaigns lead to generic landing pages that have little to do with the keyword or ad that prompted the click-through. It may sound obvious, but to get the best results, landing pages need to be tailored to keywords so they display relevant, compelling copy. Legacy CMS systems and poor communication between paid search teams and site content owners can further exacerbate this.
By making pages quicker to load and more relevant to keywords, the service to the public improves. This is music to the ears of the Google algorithm and will result in a higher relevancy score. This means it will cost a brand less in the future to appear in the same positions they have occupied previously.
5. Cross-channel learnings?
Under-performing paid search rarely taps into data from other channels to find where a person may be in the sales funnel and what role search is playing in the wider marketing mix. You need to know, for example, how above-the-line activity is impacting search, how it changes keyword use and who should be targeted at a particular moment, and with what ad copy.
Even if an FMCG is not selling to the public direct, there is still a major budgetary inducement to get paid search firing on all cylinders. Not only will it improve the support offered to retailers but, crucially, it will make budgets stretch further.
Whether an FMCG prefers to maintain the same level of investment and achieve more, or cut back on spend and use the saved budget elsewhere is a choice unique to each. Without knowing the right questions to start asking an agency, though, there is no strategic choice and paid search is likely to just keep running as before with each new campaign blending into the next with no new insight and no opportunity to maximise ROI.
The ‘old guard’ auditing approach relies heavily on manual labour is too slow to produce the analysis and insights at the scale an FMCG brand needs. If the FMCG industry is to ever mitigate wasted ad spend and increase ROI, it needs real-time visibility that reaches deep into how ad accounts are actually managed, so they can catch anything slipping as new campaigns, new people, and new agencies come and go.
Tom Quick is chief executive and founder at Percept Audit
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