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CPG brands try to catch up on digital

News, 23 February 2017
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NEW YORK: Home care brands in the US have become more active with their digital efforts, but the overall transition to digital has been slower in CPG than in other sectors, a new report has found.

Business intelligence firm L2 has compiled a Digital IQ Index of 78 home care brands that operate in the US to check how they perform in the fields of e-commerce, digital marketing, mobile and social media, Mobile Marketer reported.

The report found a rise in third party retail adoption, with 85% of Index brands outsourcing e-commerce to a third party platform, up 15% year-on-year.

In addition, some 61% of brands use features such as "shop now" and "buy now" buttons to send consumers directly to a third party product page, an increase of 48% since 2015.

L2's report also noted increased investment in internet advertising, with home care brands seeing a combined 50% increase in the total number of online impressions garnered in 2016 compared with the previous year.

However, home care brands are lagging when it comes to social media, the report found, after reporting that their adoption of social media was "stagnant" between 2015 and 2016.

Index brands with Facebook accounts remained the same at 89% year over year, while adoption of YouTube fell two percentage points to 82%.

Also of note, home care brands in the US have been slow to adopt Instagram, the mobile photo-sharing platform. Adoption of Instagram rose only marginally from 34% in 2015 to 41% in 2016.

"Marketers are hesitant to spend money on Instagram because it hasn't shown a direct tie to sales," explained Benjamin Zeidler, Research Director at L2. "The 'Buy' button has really only been in use for a few months and lends itself better to Retail than CPG, where purchases are usually made as part of a larger cart/basket," he added.

"Home Care just isn't suited well for low-funnel purchase influence, but marketers can find utility when looking to drive awareness or engender loyalty. Honest Company has shown the potential for reach, with 3.5m post interactions during our year of data collection."

Data sourced from Mobile Marketer, L2; additional data by Warc staff

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