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This is the third of a three part interview with Catherine Roe, head of CPG for Google, leading up to the IIR Audience Measurement Event in Chicago May 21-23 where Catherine and I will both be speaking. Through special arrangement, I can offer my readers a 20% discount to this event.  Just use the code AM12JR

Joel:  Catherine, in our last two interviews, you dropped two bombshells saying that searches on related to recipes are up 38% in 2011 over 2010 to 7.8 billion. Then you gave CPG marketers a failing grade of 3 on a scale of 0-10

Catherine: Yes, a lot of it is cultural. They still fall back on what they know. They don’t want to crash the plane or sink the ship.

Joel: someone in media once said, “If we can’t measure it we can’t sell it”.  In the first interview you talked about the importance of digital to the CPG path to purchase.  How should this be measured?

Catherine: It’s funny you say that, quite honestly Joel, because that has been the biggest challenge. Marketers for years have been able to associate or correlate the value of traditional media such as their GRP or their TRP or their TV spot and model out the sales lift, even though there’s not a direct linear equation that she saw the Downey TV commercial on TV on Monday night and when she shopped on Wednesday she bought Downey because of the TV commercial. But, the fortunate thing is that marketers have figured out that correlation. Then you start throwing digital and all these additional touch points that I talked about into the mix and it’s not as easy because they don’t necessarily measure and correlate exactly the same as a TV TRP.

Joel: so what do you do about that?

Catherine: The way we like to coach our advertisers through it is to think about what all these moments that matter are on the way to the path to purchase and think about them as KVTs or “key value tasks”. To be able to associate a value to every one of those tasks that hits her in the path to purchase. So, as one example, I work with an advertiser that leverages a lot of online recipes as far as a way to engage consumers because they know that if their ingredients are used in a recipe, then that consumer is much more apt to go to the store and purchase that specific ingredient for their recipe. And through this key value task type of thought process, they’ve equated and they’ve modeled out for their group that one out of every ten recipe views correlates to an actual purchase in the store. So, by doing that they are able to back into the math that says: “Okay, if I get ten visits to my site and they view a recipe, then the value of that is X because the value of a purchase of one of these ingredients in a store is X”.

That’s what advertisers need to do today to say: “What is the value if somebody visits my website?” “What is the value if somebody downloads a coupon off of my website?” “What is the value if someone downloads a recipe?” “What is the value equation if somebody clicks on a click-to-call type of advertisement on mobile?” So, being able to identify along the path to purchase is not as simple as the TV commercial and the offline media and then jump to the store shelf. There are media points all along the way and it’s translating the value of each one of those points.

Joel: if we can think into the future, let’s say three years, what is the one demonstrable proof point that says: “They were listening. They got it.”

Catherine: I think the biggest challenge to not getting it today is that CPG companies for the most part use some type of media mix modeling and they try to use a square peg/round hole effect of just applying the same media mix modeling that they’ve used on TV, print, radio and their historical, traditional advertising. (In digital) But, what would be different in three years is that the CPG companies, coupled with the measurement companies (whether that’s the Nielsen’s of the world, the comScores) have to figure out which is the right way to measure these media and what is the ROI that I’m getting out of my digital dollar in comparison to my TV.  If and when they do figure it out, they will actually put enough media (spend) in there to warrant a test.

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One Response to “Improve digital marketing with new ROI metrics, Google tells CPG marketers”

  1. Joel,

    Thanks for the very interesting post. The interview really intrigued me.

    I would also like to invite you to visit my blog on shopper marketing:

    Started following you on twitter and i am looking forward to exchanging ideas!