Facebook study: Consumers make purchase decisions in store

Facebook study by GroupM within FMCG shows that consumers make decisive purchase decisions in store. It is generally difficult for FMCG advertisers to get good results from marketing in Social Media according to the Facebook best practice framework “Brilliant Basics”.

The study describes the results of a meta-analysis of Marketing Mix Models for 19 Consumer Packaged Goods (CPG) brands, which cover a wide range of different product types and campaigns from Sweden, Denmark, Norway and Finland.

The purpose of the study called “Unlocking the full potential of social to drive CPG sales” was to evaluate the effects on Facebook advertising ROI in campaign driving according to Facebook’s best practice framework known as “Brilliant Basics.” Five of the seven principles of best practice were evaluated to understand their role in driving ROI. CPG brands can improve the return on their Facebook media investments, by as much as 43%, if they follow Facebook’s “best practice”

The five Facebook “best practices” in the study are:

1. Setting a weekly frequency of 3 (increases ROI by 11%).
2. Optimizing campaigns for an awareness objective (+ 8%).
3. Setting the campaign duration to cover at least one purchase cycle (+ 7%).
4. Targeting a broad, yet qualified audience (+6%)
5. Using brand-building video assets fit for mobile (+ 5%).

All parameters collaborating and multiplying: 43%.

In addition, the study states that Consumer Packaged Goods (CPG), or Fast-Moving Consumer Goods (FMCG), is a unique category, which stands out from other verticals in many respects. Purchases can be frequent and habitual. The research phase for potential buyers tends to be short to non-existent. Consumers buy what they usually buy or make their purchase decision in store.

Hence, salience (i.e. staying top of mind), and building brand equity in the long term, are key to most CPG advertisers. These two themes help explain why price, distribution and in-store marketing activities tend to be critical in driving incremental sales (often assessed through Marketing Mix Modelling). While advertising certainly contributes to incremental short-term sales, it likely plays a comparatively smaller contributing role compared to other verticals.

GroupM Business Science have significant experience in Marketing Mix Modeling, having conducted more than 250 MMM studies for Nordic CPG advertisers (>1000 studies across all verticals) during the past 10 years. Findings from these projects reveal that CPG is the sector where paid media return on investment is the lowest and that CPG advertisers have difficulty using paid media to drive short-term sales.

You can read the study here:
https://www.groupm.se/wp-content/uploads/2021/04/Whitepaper-UNLOCKING-THE-FULL-POTENTIAL-OF-SOCIAL-TO-DRIVE-CPG-SALES.pdf