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By Liz Crawford, Senior Industry Analyst

he following is the first installment in a six-part series examining best prac-tices for the measurement of shop-

per marketing. This article looks at effective ways to rationalize the investment. Subse-quent articles will cover the measurement of shopper behavior and brand impact, effec-tive integration practices, retail collaboration and directions for the future.

PART 1: Rationalizing the InvestmentShopper marketing promises big things. It promises to fuel brand demand and influ-ence shopper behavior while also selling more product in-store. Brand teams like it so much that, according to Shopper Market-ing’s annual Trends Survey, over half plan on increasing their shopper marketing budgets.

Some of this increased funding will be siphoned away from above-the-line efforts. Yet, despite the growing enthusiasm for this approach, most brands still don’t un-derstand exactly what they are getting for their money.

Shopper marketing has been likened to quantum mechanics, the world of infinitesi-

Underwritten by:

Best Practices in

Shopper Marketing Measurement

TAKING MEASURE:

TShopper-Centric MeasurementMeasurement buckets:

Brand objectives, expressed as:

Retailer objectives, expressed as:

1. Transaction data

Lift, units/occasion, category share, brand loyalty, program ROI

Comp-store sales lift, category sales, cross-category sales, basket size, profitability per square foot

2. Shopper behavior

List inclusion, dwell time increase, consideration, shopper engagement, advocacy

Trip frequency, number of aisles walked, shopper card penetration/participation, shopper engagement

3. Attitudes and beliefs

Brand equity measures: awareness, “Brand for me,” “Would recommend to a friend”

Brand equity measures

Non-shopper returns: business-to-business relationship impact

A “seat at the table,” more facings; increases in feature and display activity

Manufacturer-driven programs that meet the retailer’s needs

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SPECIAL REPORT

Shopper Metrics by Size of Program

Shopper measure-ment buckets:

Small, single brand or tactical program

Mid-sized/regional program

Large, multi-com-ponent campaign

Transaction data

Shopper behavior

Attitudes and beliefs

“ It is tempting to use the metric we can easily get, rather than measure the ‘real’ objective of the program.”

Tracey Doucette, senior vice president, customer strategy, field & shopper marketing, PepsiCo

mally small things. It is like micro-marketing on a mass scale. On the other hand, tradi-tional marketing is like Newtonian physics, which takes a broader perspective on the world. Given these differences, older research methodologies (especially broad-scale, na-tional ones) don’t capture the entire impact of smaller-penetration shopper programs.

Furthermore, shopper marketing often de-mands a broader, brand-agnostic mindset that requires different success measures be-yond number of cases sold – brand-portfolio lift, out-of-store behavior changes, category lift and trip frequency, among others – that traditionally haven’t been part of the ar-senal. That makes comparing the financial returns of shopper marketing efforts to those from traditional activity very difficult.

Throughout the industry, marketers adopt-ing a shopper strategy have been grappling with these questions, “How do I rational-ize my spending, above and below the line? What am I getting for my investment – really? What should be the key metrics across programs?”

To understand these issues and their po-

tential solutions in greater depth, Shopper Marketing interviewed dozens of executives across the industry, from retailers to research-ers, agencies to brands. The result is a series of six articles reporting on best practices in measurement and the direction research may be heading with advances in technology.

Key Issues and HurdlesShopper marketers are looking to rational-ize investments as budgets shift from above to below the line. For most brands, there is a single pot of money for the totality of marketing efforts; it is a zero-sum game at the beginning of each planning cycle. But a portion of the money that used to be spent gaining impressions through mass media ad-vertising is now spent on shopper initiatives. The question for many is, “How do I justify this spend shift?”

Because shopper marketing is more closely aligned with the purchase than traditional media, it stands to reason that measuring its impact should be easy. Or at least easier. But this hasn’t been the case. Shopper marketers have been stumbling over various obstacles

in their quest to measure impact. There seem to be four major stumbling blocks, recurring across categories and channels.

1. The Measurement Trap Thirty years ago, promotions were one-off events that were fairly simple to measure. A brand would need to move a certain number of cases to pay off an investment in a defined period. This concept was easy to grasp. The measurement for success was one-dimensional: sales volume. But if you look at measurement through the shopper-marketing lens, it becomes more complex, because shopper marketing is an effort to provide long-term relevance by delivering holistic solutions to shopper needs – thereby building the brand and changing behavior in the process.

So what is the “measurement trap”? De-faulting to sales metrics, to the exclusion of other measures. Tracey Doucette, senior vice president, customer strategy, field and shopper marketing, at PepsiCo, warns, “It is tempting to use the metric we can easily get, rather than measure the ‘real’ objective of the program.” But the best shopper mar-keting programs have objectives that extend well beyond sales into shopper behavior and attitudes. If only sales are measured, the full yield of shopper programming is obscured.

2. What Are We Measuring Anyway? In an attempt to capture a fuller picture of program performance, other acronym-ed success measures have emerged, includ-ing: Return on Objectives (ROO), Return on Marketing Objectives (ROMO), and Return on Relationship (ROR), among others. ROO or ROMO usually refers to measuring shifts

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in shopper behavior over time (beyond the promotional period), or to shifts in brand at-titudes. These changes can be determined quantitatively, albeit at significant cost. The ROR is not often a quantitative measure, but a concept that attempts to capture the positive impact of a shopper program on the relation-ship between a manufacturer and a retailer.

However significant these achievements may be, they can be undervalued or forgot-ten entirely when the unit of success is a dol-lar, and only a dollar.

Effective programs seek to change behav-ior well beyond the promotional period, ex-erting a lasting influence on shopper habits. For example, the Kraft iFood Assistant mo-bile app suggests meal solutions that bundle products to solve a shopper’s “What’s for dinner?” dilemma. The app is also geared to meet business objectives: driving sales for Kraft products, and increasing basket ring for retailers. [Note: While some industry profes-sionals restrict “shopper marketing” to activ-ity related to particular store environments (either literally or through collaborative out-of-store programs), general consensus de-fines it as any activity that pushes a shopper along the path to purchase, the interpretation that will be used in this series.] The industry is seeking to understand how these kinds of shifts in shopper behavior can be captured in terms of metrics, and then compared with results from other programs.

Shopper marketing can also influence brand beliefs and attitudes. Think of the posi-tive impact of the pink ribbon on Yoplait’s brand perception, or the halo that Campbell Soup’s Labels for Education program gives to participating brands. In addition to driving sales, these programs leave lasting impres-sions on brand equity. (This can hold true for both the brand and its retail partners.) But how is the brand equity impact captured

here? And how do we gauge any effect on the manufacturer-retailer relationship?

To add yet another layer of complexity, stakeholders have differing agendas and def-initions of success. Predetermined metrics need to reflect the objectives of the program, especially when multiple objectives are in play. Without exception, everyone interviewed for this series (agency, researcher, brand and retailer) asserted that stakeholders need to agree on the markers of success, from the outset, in order for success to be achieved. Programs are so diverse that it can become challenging to compare one to another in “apples to apples” fashion. Therefore, it is imperative to reach internal consensus on success metrics prior to program execution.

The chart on page 1 identifies three buck-ets of shopper-centric measurement: sales transaction data, behaviors, and brand at-titudes/beliefs. Manufacturers and retailers each have goals in these buckets, but they can differ. Incorporating both sets of goals into programming has become critical to suc-cess. Deborah Hannah, shopper marketing director at Starbucks Coffee Co., says, “A self-serving brand goal doesn’t cut it in shopper – the shopper objective needs to incorporate

retailer objectives, such as share of wallet, margin growth, category growth, and bas-ket size.” (The task of reconciling objectives and managing the analytics process with re-tail partners will be addressed in article five, Collaborating with Retailers.)

Collaborating with the retailer on objec-tives can bring its own rewards. The chart also includes a fourth bucket, the program’s im-pact on the brand-retailer relationship. While this is rarely a “hard” metric, each stakehold-er hopes to receive some benefit, or return, in this area as well.

3. The Dubious Profitability of MeasurementIncreasingly sophisticated marketing strate-gies have demanded increasingly sophisti-cated metrics. And, for the most part, these are available. From in-aisle video monitoring, to tracking in-store traffic patterns and eye movements, to linking online exposures to bricks-and-mortar purchases, shoppers are being tracked, tagged, asked and observed. Methodologies abound. Why don’t results?

The answer is that funding state-of-the-art metrics tools would wipe out profitability for many smaller programs. It doesn’t make too much sense to spend $40,000 to measure a $150,000 program.

As a practical matter, then, not all shop-per marketing programs can – or need to be – measured to the fullest. According to industry professionals from both sides of the table, it seems that best practices are tiers of measurement commensurate with spending. That is, the bigger the budget, the more ex-tensive the performance metrics. The size of the program sets the level of expectation for the metrics; this makes sense from a profit-ability perspective, because programs effec-tively “buy” their own metrics.

Furthermore, the bigger and more exten-

SPECIAL REPORT

“ While challenges still exist, new measures allow us to look at the full spectrum of attitudinal and behavioral shifts – including sales.”

Fred Bidwell, executive chairman, JWT Action

“ A self-serving brand goal doesn’t cut it in shopper – the shopper objective needs to incorporate retailer objectives.”

Deborah Hannah, shopper marketing director, Starbucks Coffee Co.

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sively measured programs can serve as tutori-als for the rest of the organization, especially when these are systematically shared before the next planning cycle.

Sticking with the three buckets as a simple way of parsing metrics, the scope of the program roughly parallels the metrics to be obtained (see chart on page 2). Virtually all programs, even one-off tactical efforts, are examined from a simple lift standpoint using sales data. Lift metrics are then compared to historical norms and benchmarks for that category.

A few larger, forward-leaning manufactur-ers have improved upon simple lift analysis to employ sales data as inputs into custom marketing mix models. (“Marketing mix mod-eling” refers to the use of multivariate regres-sion and other statistical techniques on sales data to gauge the impact of various marketing tactics.) While nearly all of the larger consumer packaged goods brands run analyses annually, using national data as inputs, the more pro-gressive brands are using desktop models on a brand-by-brand, program-by-program basis.

Programs with greater scope and spend-ing may warrant obtaining the next level of measurement: shopper behavior information. This can come from shopper card data, when examined longitudinally and across baskets. Other kinds of behavioral metrics can come from research specifically set up for the task, including shopping cart trackers, in-aisle video monitoring, eye-tracking, virtual store testing, and others. (Article two will discuss a number of these methods.)

The biggest campaigns, of course, are most likely to earn the most extensive analysis, which would include brand attitude measurement. While most brands examine shopper behavior (via panel data) and brand equity (attitudinal tracking studies) on a national basis, these metrics are not usually broken out by retailer or by program. However, the largest shopper marketing programs have the funds required to acquire these data on a one-off basis.

4. Human NatureNearly without exception, the executives interviewed for this series were a bit apolo-getic about their self-perceived lack of rigor in measuring performance. Within the walled gardens of their companies, shopper market-ers lament the shortcomings of their meth-ods, even when they are relatively minor. These shortcomings seem more acute when combined with the sneaking suspicion that “someone” out there is doing a better job. It’s human nature to put one’s expectations a little above reality and adopt the “grass is always greener” method of comparison. But psychologist Robert Bringle was probably right when he described envy as a positive motivator that inspires people to work harder.

It is not surprising that the marketing in-dustry expects great things from measure-ment today. It has only been about a dozen years since the smartphone was introduced. Most professionals remember a time before smartphones, a time before cellphones and, for some, even a time before color TV. Tech-nology is accelerating our capabilities and our expectations, too. Marketers now feel a com-pulsion to track every brand interaction with every shopper – accurately, cheaply and in real time. And this seems completely plausible. In fact, something similar to this scenario may be in the offing through new technology.

In the meantime, however, it can be disap-pointing to be confronted with the realities of legacy measurement systems. But is this disappointment really warranted? Traditional above-the-line advertising never really de-livered – or even promised – a direct return on investment. While relationships can be drawn, no metric has ever proved it. Shopper marketing is being held to a higher standard. Perhaps this is because new technology now tantalizes with the promise of perfect data.

“Measurement has always been a challenge. Traditional marketers, especially in brand ad-vertising, have had to rely on attitudinal shift metrics, as there are many other influences that occur between the brand advertisement

and the purchase,” says Fred Bidwell, execu-tive chairman of JWT Action. “With shopper marketing, we have more influence through-out the purchase funnel. While challenges still exist, new measures allow us to look at the full spectrum of attitudinal and behavioral shifts – including sales.”

New metrics for success are being discov-ered as new paths to purchase are being explored. The journey may be confounding at times, but the outcome – more effective measurement – is worthwhile.

SPECIAL REPORT

JWT/OgilvyAction Inc., conducting business under the OgilvyAction and JWT Action brands, is a fully integrated, end-to-end shopper marketing and ex-periential marketing agency with main offices in New York, Chicago and Akron, Ohio. It is part of the WPP Group.

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Liz Crawford has more than 20 years of brand management and consulting experience with a concentration in strategic innovation. Over the last few years, Crawford has focused on developing integrated shopper marketing strategies for Fortune 500 clients. Currently, Crawford is an analyst and contributing writer for the Path to Purchase Institute. McGraw-Hill released her book, “The Shopper Economy,” in March.

About the Author

Series Schedule

Part 1: Rationalizing the Investment

Part 2: Measurement of Shopper Behavior

Part 3: Measurement of Brand Impact

Part 4: Effective Integration Practices

Part 5: Retail Collaboration

Part 6: Directions for the Future