This past fall, consumer spending climbed to the highest it’s ever been in the past seven years.

Forrester research also says that U.S. consumers will spend a total of $327 billion online by the end of this year. With shopping behavior up and to the right, CPG brands need to think seriously about building powerful, engaging digital experiences that will drive customers to buy.

One of these marketing levers is paid social. As the digital landscape grows more complicated and saturated, the best way to cut through the noise is by paying to play.

But which channels should you start with and how do you build a paid social strategy?

Here are some ways CPG companies are spending their social media budgets:

Facebook Ads

Facebook Ads offers one of the most advanced targeting capabilities of any paid social platform. Beyond basic demographics such as age and gender, you can slice and dice by interests, behavior, life events, and audiences similar to your existing persona group.

Targeting helps CPG companies optimize their budget and engagement by reaching the best audience possible for the amount of budget allocated. But there is such a thing as over-targeting.
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Photo from AdAge

Procter and Gamble, the world’s largest ad buyer, recently announced that it will be stepping back from their current approach on Facebook Ads.

“We targeted too much and we went too narrow,” Marc Pritchard, Chief Financial Officer for Procter & Gamble says, “Now we’re looking at: What is the best way to get the most reach, but also the right precision?”

The CPG giant still plans on using Facebook Ad targeting, but the team will be re-adjusting spending and investment going forward.

“Improvement and refinement of what works and what doesn’t is important. [P&G] targeted in some instances and learned a good blend of targeting and mass reach. They’ve been successful on our platform and continue to be successful,” says Facebook spokeswoman Elizabeth Diana.

Spending too much money and resources on a specific group can make engagement fall short. For example, let’s say you’re an car freshener company and you set a month-long campaign to target 23-year-olds in Brooklyn who just bought a car. Since it’s a small audience base, most people probably engaged or bought your product within the first two weeks. By the end of the campaign, your audience is over saturated and it’s the same people who are viewing the ad over and over again. You end up spending more than what you’re getting in return.

By broadening your audience, you can optimize your budget to get the most bang for your buck.

Instagram Influencer Marketing & Stories

Influencers say that Instagram, second to Facebook, is their preferred channel.

To top this off, CPG food and retail companies see a much higher return on investment than any other industry, with an average ROI of $11.33 and $10.48 respectively, to every dollar spent, compared to $6.85 for other industries.

Influencer marketing has been a major tool in helping the CPG industry shift audiences. For many years, the primary target of many CPG ads was parents.

But now, younger consumers are connected to brands directly themselves. Channels like Instagram (and Snapchat) open up a range of opportunities for brands to speak directly to Gen Y, Z, and X.

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At this year’s Coachella festival, fruit and vegetable producer Dole hosted a perfectly “Instagrammable” pre-Coachella brunch with influencer and fashion blogger Gina Ybarra.

With the sunny, vibrant brunch spread and the extra boost from Ybarra’s following, Dole was to create content that was geared toward a younger demographic. According to Nielsen, almost half of Coachella attendees are within the 18-34 age range.

More recently, the spotlight’s been on Instagram Stories.

Among the many questions are, “how are these 10 second, disappearing videos different from Snapchat?” and “how do we use this together with Snapchat?”
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Photo from MediaPost

Quaker, in partnership with digital agency VaynerMedia, was among one of the first CPG brands to test out the new platform.

Within hours of Stories rolling out, the 15-year-old oats company published a step-by-step tutorial of creating “peanut butter banana overnight oats” in 10 images.

“This was one of the biggest platform updates on social media in months, so we saw it as a great opportunity to highlight Quaker as a first mover in the space, while driving brand awareness and educating our growing Instagram community on how to make overnight oats,” says Elena Parlatore, Quaker’s Director of Digital Marketing and Social Media.

The video generated 2,527 views within the first 12 hours, just from organic social alone. “That was without the paid promotion that we normally need to do now with social videos,” Parlatore explains.

Twitter Ads

Twitter’s partnership with Datalogix helps better inform CPG marketers on how online advertising impacts offline sales. Through this, Twitter found that Promoted Tweets lift product sales offline by 12%.
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Photo from AdWeek

Last year, Coke leveraged Promoted Twitter Ads for their “Share A Coke” campaign, where they targeted users by first name to incentivize them to purchase personalized coke bottles with their names on it.

Overall, the “Share a Coke” campaign was so successful that it reversed a decade long decline in US Coke consumption.

Aside from mixing online and offline efforts, CPG brands have also found success with running simultaneous paid content on Twitter and TV, driving 8% to 16% more sales.

Similar to Facebook, Twitter also offers Partner Audiences, which allows CPG marketers to hyper-target their competitors’ known purchasers.

So a social media manager for an athletic footwear brand could use Partner Audiences for an upcoming paid Twitter Ad, to quickly identify 2 million users that have bought running sneakers before… or 50,000 users who buy tennis socks from a competing sports company.

It’s All In The Numbers

Whether it’s Facebook, Instagram, Twitter, or another channel, the moral of the story is that effective CPG marketers are looking closely at the data and building campaigns based on what they see.

CPG companies, especially enterprise brands, need to find that balance between reaching and appealing to mass audiences and targeting niche personas. It’s a delicate balance between using paid social to generate the kind of revenue they need and making the most of the technology available to them.

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