PepsiCo is preparing to roll out an in-house media optimization tool called ROI Engine internationally, an initiative that has helped save millions of dollars in online media spend in the United States
The CPG giant launched the North American initiative 14 months ago to measure digital advertising campaigns across all brand and marketing channels. Next year, the company plans to bring ROI Engine to its top 20 markets around the world and recruit talent across its European and Asian hubs.
“Our goal throughout this exercise is to use this data to add transparency to our buying and execution process,” said Shyam Venugopal, vice president of global media and consumer data for PepsiCo.
Given the fragmentation of both media consumption and sales channels, the goal of internal measurement is to make marketing more transparent and efficient, while increasing sales performance.
PepsiCo’s annual ad spend in the US is reportedly more than $ 1.7 billion. Although the CPG brand declined to provide details on the exact savings from ROI Engine, a spokesperson said it cut spending by millions of dollars. It did this by leveraging the insights generated by ROI Engine to improve the accuracy of targeting and reallocating spend from lower performing media to higher performing outlets.
“We don’t need 100% accuracy to have a big impact, do we? We just need to know that certain things have a greater or lesser impact than others to see the big corporation’s returns, ”said Michal Geller, PepsiCo’s SVP for Global Ecommerce Marketing.
Building an internal measurement unit is an expensive task that requires high investments in engineering and, above all, in employees. Cosmetics brand Coty tried to buy media in-house after purchasing the Beamly digital outfit earlier, but had to reverse course after four years. Simply put, the gap between the cosmetics giant and the digital outfit was too big in cultures and priorities.
Given PepsiCo’s previous investments in e-commerce, Geller says the company is moving to a point where there are interesting career paths in technology and data science.
“What we find is… what [employees] PepsiCo really likes that the issues they are working on are very massive and have massive implications, and that has been a great way to attract and retain that type of talent, ”he said.
The PepsiCo spokesman said the current team for ROI Engine in North America is small, but the final global workforce is expected to be in the dozen.
More data means more agile campaigns
Brands put more emphasis on data, especially as they invest more in programmatic tools, which often obscure their digital investments. A May report by ISBA and PricewaterhouseCoopers found that publishers only receive 51% of digital advertising spend and 15% of that spend is lost when channeled through Ad Tech’s middlemen.
Data is also becoming increasingly important as the coronavirus pandemic puts an emphasis on flexibility and agility. Marketers now want to quickly optimize campaigns and reallocate spend based on changing consumer habits and other market forces.
“The old metrology was mostly done nationally or across a handful of brands, or about once a year. This essentially meant that you were more than a few quarters behind decisions that you learned from and made. Said Venugopal. “The main focus was on how we can reduce the decision-making lag.”