Marketing and advertising expenditures are affected by a number of factors. How are AI, and other factors, affecting the CPG advertising budgets? How have the investment priorities changed this year, given key consumer trends? Mediaocean has released its latest research.
- Marketing and advertising expenditure is affected by a number of factors.
- How is the introduction of AI, and other factors, affecting the ad spend in the CPG sector? What are this year’s key consumer trends and what has changed in terms of investment priorities?
- Recent research by Mediaocean sheds light on the matter.
World events, technological advancements, the economic climate, consumer attitudes, and changes in technology are all factors that influence marketing and advertising expenditures. How has artificial intelligence (AI), and the current economy, impacted advertising spend in particular, the CPG industry? What are the ways in which CPG professionals and companies use AI to run their daily business? What are some of the most important trends in consumer behavior for this year? Have investment priorities changed this year? Mediaocean conducted a recent study to answer all of these questions. Here are some key findings.
CPG Industry is Optimistic this Year
This year, optimism has been sweeping the CPG sector. Most respondents plan to increase or maintain their expenditures across all channels. Only TV and Print are the only media channels where more respondents indicate they will reduce their spending as opposed to increase it. The advertisers are committing to using a variety of media and placing a high priority on omnichannel implementation.
![Are you planning to decrease or increase your marketing spends?](https://images.spiceworks.com/wp-content/uploads/2024/04/16123605/Do-marketers-plan-to-increase-decrease-or-maintain-spends.png)
Are CPG marketers planning to increase, decrease, or maintain their spends for each channel?
Source: Report on the CPG Advertising Outlook for 2024New window opens
Despite the fact that most channels will continue to grow, some platforms should see exceptional growth. Digital display, videos and social media are leading the way in CPG, with a surge of investments. Around 72% plan to increase digital display/video expenditures, 67% on social media and 56% on CTV in this year.
The most important consumer trend is ecommerce
The study found that 57% of respondents rated ecommerce as the top consumer trend for this year. The dominance of the ecommerce everywhere trend means that CPG marketers need to optimize their digital presence and engage consumers using data-driven insights.
In addition to ecommerce and generative AI, 55% of the respondents have cited it as a key trend. The rise of ChatGPT, as well as other AI applications built using large language models, has clearly caught the attention of marketers. Resource allocations have followed.
TikTok, social video and CTV/streaming are also growing fast. These trends indicate that businesses will invest heavily in order to reach consumers via sound, vision, and movement.
AI is used primarily for research and analytics over content generation
What are the ways that CPG firms use generative AI for marketing? The top two applications were data analysis (41%), and market research (29%). Around 25% of the respondents use it to write copy and 12% generate images. Only 9% of respondents use it to provide customer service.
![What CPG marketers can learn from Gen AI marketing](https://images.spiceworks.com/wp-content/uploads/2024/04/16123646/How-CPG-marketers-are-using-Gen-AI-in-marketing.png)
CPG marketers are using Gen AI to market their products.
Source: Report on the CPG Advertising Outlook for 2024New window opens
AI is not able to grasp tone or context. This affects the quality of generated content. AI-generated material also lacks emotional depth and creativity nuanced by humans.
The most critical investment is in performance-driven paid media
A few media and advertising investments are more important in the current macroeconomic environment. Sixty-two percent of respondents said that performance-driven media is the top investment. Brand advertising is still a key function for 45% of respondents. CPG companies should adopt a funnel-based approach.
Measurement and attribution, according to 59% respondents, are essential components for their media and advertising investments. In an age where cookies are being deprecated, this is especially important. Cookies have long been the foundation of data-driven marketing. Advertisers and publishers will lose sight of certain consumer segments if they don’t have access to cookies. In order to prepare marketers for this new reality, they must evaluate and test alternative measurement methods and be ready to implement them.
More: Marketers are Mostly Positive on AI, but with a Slight Hint of concern
Media and Creative Gap Still Exists
Respondents said that 94% did not fully sync their creative technologies and processes with media. The industry has overvalued media and neglected creatives, causing this gap. This has a significant impact, particularly when customers respond and value customized experiences. Brands can grow by bridging this gap.
Three ways are there that the creative-media divide manifests itself:
- Inefficient teams, technologies, and processes create inefficiencies, resulting in rising costs.
- Reduced consumer response to repetitive and irrelevant messages.
- Inability to create content that resonates is a barrier due to a lack of creativity.
Adtech platforms that are independent and designed specifically to improve creative relevance across marketing channels can help fill these gaps.
The conclusion of the article is:
CPG marketers are embracing creativity and innovation in 2018. Advertising industry is optimistic despite the major changes that will occur in the macroeconomic climate in 2023. Advertisers and marketers are indicating a desire to maintain or increase their spending on digital media. ChatGPT and other forms of generative AI have captured the attention of everyone, causing a change in priorities. As the importance of measuring and attributing capabilities have increased, so too has concern about cookie deprecation. This makes it difficult to measure. There is also a gap in the execution of media and creative. Marketers should therefore consider creative platforms and innovative methodologies to gain a competitive edge this year.
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Karthik has a varied educational and professional background. Karthik has a Masters of Supply Chain and Operations Management degree from Nottingham University in the United Kingdom. He has over 15 years of experience working across industries. As an assistant editor for Spiceworks Ziff-Davis, he is responsible for a wide range of HR Tech and Martech topics, including talent acquisition, workforce management, marketing strategy, and innovation. Karthik, a professional content writer, is also a blogger, traveler and history enthusiast. To share quotes or inputs for news pieces, please get in touch on karthik.kashyap@swzd.com