53% of Marketers to Connect Trade and Brand Budgets

Mon Jun 12, 2017

Kathy Crosett

Large brands that work with your clients to increase sales at the retail level are making changes to their tradetrade marketing budgets. These enterprises have always divided their ad budgets between branding campaigns and trade support. In an era when consumers are paying more attention to digital media and buying more products online, brands are looking for the best digital tools to improve the impact of their trade marketing investment.

Trade Marketing in Transition, a study conducted by Millward Brown on behalf of Criteo, focused primarily on the grocery industry and its CPG partners. However, the findings may be instructive for all product companies that rely on local dealers and retailers to help them increase sales.

The study finds that brands use the following types of trade marketing:

  • Direct mail 49%
  • Coupons 49%
  • End-cap displays 46%
  • In-store promotions/giveaways 43%
  • Local media (print, TV, online, radio) 28%

Analysts also explored the perceived effectiveness of local trade media spending through specific formats over the next five years. Marketers note that, on a scale of 1 to 5, online display advertising (3.76) and paid search (3.54) will have the biggest positive changes in effectiveness, in terms of reaching consumers.  For traditional media, radio scored 3.64 and TV came in with a 3.5 rating.

While CPG marketers were late to the online party, at least 50% of participants in this study say that online retail is disruptive to their business. Their specific concerns regarding online trade marketing include the following:

  • Amazon is now setting prices 29%
  • They have a conflict between direct sales and retailer support 28%
  • Online selling is complex 27%
  • Attribution is difficult to get right 23%

While marketers grapple with these concerns, they have been slow to allocate more funds to digital trade programs. Some say the ROI is too small and others say the online sales volume doesn’t warrant significant spending. In other cases, managers do not support the idea.

Despite the many issues related to digital, over half of CPG producers see a future where trade and promotion budgets are more closely connected. In addition, enterprises agree (56%) they must reach younger consumers with their trade marketing efforts. One path to this audience may be through paid search and analysts recommend businesses invest in paid search campaigns, product listing ads and online display to boost awareness and sales for themselves and retail partners. Media sales reps may be able to tap into the willingness to experiment by encouraging local accounts to ask vendors to help them fund the cost of digital campaigns.

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About Kathy Crosett

Kathy is the Research Director for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel.

View all posts by Kathy Crosett
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