Testing Your Way to Successful CPG Sponsored Campaigns

Have you noticed “paid post”, “sponsored”, or “promoted” appear when you’re scrolling on social media or searching something? Those phrases are just a few of the many sponsored campaign indicators.  

While a brand pays for sponsored campaigns – Google, Meta, and other major advertising channels will review and monitor paid to protect their users from scams, fraudulent, or any kind of potentially dangerous content.  

Sponsored campaigns are critical in driving brand awareness. Strategically leveraging paid advertising can help CPG brands reach a broader, more specific audience based on their marketing goals. Optimize your recruiting budget and strategy to maximize the return on your campaign investment.  

Since 60% of CPG brands measure success for their return on ad spend, it is no surprise that 55% plan to increase their digital marketing spend.  

With over 79% of brands reporting that paid campaigns are an essential driver for their business, the digital landscape is highly competitive. This is why testing, measuring, and improving CPG sponsored campaigns is so critical for brands to see success. Additionally, sponsored campaigns' content and creativity are 4x more likely than media placement to influence profit. 

Testing allows you to improve your ads while maximizing your return on investment continuously.  Research has shown that consistent pre-testing improves ad efficiency by at least 20%. Testing allows you to continuously improve your ads while maximizing your return on investment.  

Understanding Sponsored Campaigns in the CPG Industry 

The notorious CPG brand, Procter and Gamble, was the first to sponsor content in the 1920’s when radio was at the top of the media food chain. In today’s digital world, sponsored content expands beyond radio to podcasts, social media, and influencer partnerships. Now, Procter and Gamble is the largest CPG advertiser, spending over $10 billion annually. Sponsored content, especially in the CPG industry, has various opportunities for brands to reach the right audience, build trust with their customers, and ultimately increase revenue.  

 For your brand specifically, you need to understand your audience. Is your audience primarily on Instagram or LinkedIn? Does your audience like short form content or long form content? What stage of the funnel is the audience you are targeting? Are you targeting a new audience or are you retargeting an audience that already knows your brand?  

 Since sponsored content is ever-changing, there are a few foundational aspects to remember, no matter the channel, stage, or format you choose: 

• What is the content format for the sponsored campaign? 
• Is there a word or character count for the sponsored campaign? 
• What does successful sponsored content look like through that specific medium? 
• What content would stand out without looking like an ad? 
• What is the performance benchmark for this type of sponsored campaign?  

 The beauty of sponsored content is that it can appear as if it were organic, blending in with a consumer's typical content to gain their trust. The Native Advertising Institute defines Native advertising as “paid advertising that matches the form, feel, and function of the content of the media in which it appears”.  

As sponsored content continues to evolve, it is critical for brands to stay up to date with the trends. During the 2024 SXSW, a major trend for all brands is authenticity and sticking to your true brand values. CPG brands need to align their mission and actions to gain and retain their core audience, and can test that in their organic and sponsored content to determine what resonates best with their audience. 

Experimenting goes hand and hand with testing. You should always be trying new advertising channels, campaign strategies, landing pages, call to actions, and more through A/B testing.  

The Importance of Testing in Sponsored Campaigns 

Scalable data-driven marketing can deliver 3 to 5% growth in net sales and improve marketing efficiency by 10 to 20%. For long-term growth, a CPG brand needs to be focused and targeted for real results. To do exactly that, brands are turning to sponsored campaigns to target the right audience at the right time and place, using testing to nail the right message.  

Sponsored campaigns can vary in format, reach, and price depending on the channel. That is why it is crucial for brands to test their sponsored campaigns to optimize their budget and maximize their results.  

The Short Wins of Paid Media 

With constant changes to social media and search algorithms, investing in paid media can help improve and expand your reach. Utilizing paid media has various benefits, such as: 

• Generate brand awareness 
• Target your ideal audience  
• Boost engagement rates  
• Raise credibility and trust  
• Increase store, social, website traffic  
• Enhanced customer loyalty  
• Increase conversions and sales  

 However, if campaigns are not strategically executed and tracked effectively, the results can be misleading. Paid media key performance metrics can be deceiving. While impressions and clicks can seem impressive, they may not lead to long-term success.  

Vanity metrics can make sponsored campaigns seem high-performing without actually obtaining real results. If your audience isn’t taking action to reach the goal you are trying to achieve, then the ad campaign might not be reaching the right audience or have the right message, campaign, or call to action. 

Even if a campaign receives ample impressions, if you are not building a relationship with your audience or converting them, you may need to consider making changes to it. Testing and tracking performance is the best way to optimize your campaign.  

To avoid getting carried away based solely on impressions, set performance benchmarks. 

Benchmarks that turn short term wins to long term success 

Setting measurable benchmarks and goals helps make sure your campaigns are effective and generate real results.  

You should base benchmarks on the following: 

• Your industry 
• Your competitors 
• Your budget 
• Your selected channel  
• Your goals 

Analyzing past performance can help you set and redefine your benchmarks if you have already utilized paid campaigns.  

The Costs Involved in Sponsored Campaigns 

Brands can choose to pay a fee to appear in the top search results for relevant search queries on Google, this can range from $1,500 to 8,000 per month for small or local businesses to $20,000 to $50,000 per month for enterprise level organizations. 

76% of marketers say they are happy with their return on investment from Instagram advertising. Sponsored ads on social media can range anywhere from $50 to $5,000 a month and that is not including influencer collaborations which can range depending on if you are using a micro influencer or A list celebrity. With influencer marketing, brands have found an average return of $6.50 for each dollar spent.  

The US Small Business Association suggests that companies generating less than $5 million per year use 7 to 8% of their gross revenue.  

Large Budget Failings: Common Pitfalls to Avoid 

As mentioned earlier, testing, tracking, and measuring results is very important. If you overlook or misinterpret the analytics, you may end up wasting your ad spend.   

Here are a few commons ways sponsored campaigns can fail: 

• By directing visitors to a home page and not a landing page 
• Insufficient budget for the desired results 
• Missing the objective or end goal 
• Ineffective messaging or call to actions 
• Failure to test imagery or poor quality images 

 Campaign Disasters 

Groupon, created an ad for the Super Bowl which is one the the most watched events in the United States. Although the Groupon ad was meant to be funny and represent a Groupon deal for a Tibetan restaurant, the message came off as “save money while enjoying Tibetan culture”. Groupon was pushed to pull the ad after viewers shared that they found the ad offensive and  disrespectful for making light of political and social issues for capitalist gain.   

The Super Bowl is known for being the most expensive ad real estate on television, costing brands around $7 million for 30 seconds of ad time.   

Another disastrous campaign was Pepsi’s ad featuring Kendall Jenner, that made light of another serious social issue. Although Pepsi didn’t pay for a Super Bowl ad spotlight, the company still spent millions of dollars and lost millions of dollars from the “tone deaf” ad, dropping Pepsi’s brand value by 4% – read more about the Pepsi ad catastrophe.   

Pepsi’s Brand President shared that the brand pushes content quickly to stay relevant in the highly competitive CPG industry. If the company had taken more time to test the campaign before launching it to a broader audience, it could have avoided all the backlash.   

Testing Strategies for Optimizing Sponsored Campaigns 

One of the best ways to avoid negative responses and ensure positive results is through continued, consistent testing. While testing can help you boost your campaigns, it is important to only test one element at a time.  

A/B Testing 

The most common testing strategy is referred to as A/B testing or split testing. This method splits your audience to test different elements of a campaign to determine what performs better. A/B testing is widely used to define copy, design, and call to actions.  

Audience Segmentation 

If you are trying to determine how successful your campaign will be with different audiences, then you can segment your audience by age, location, industry, interests, etc. to gauge the response and performance. A creative or piece of copy could perform far better in one location or within one age group than the other. Segmenting your audience and testing to optimize your campaign for each targeted audience can maximize your results.  

Assessing Sponsored Content Channels 

Market research can help you determine which channels to reach your target audience on. While it is important to focus on your highest performing channels, experimenting with other channels can help you reach a larger or new audience.  

Multi-channel marketing can help increase your reach, visibility, and brand awareness. 50% of advertisers that utilize a multi-channel advertising strategy reported a higher return on investment.  

Advertisers also reported, using nearly all media types of media but that video, display, and social media were the most widely used channels for multi-channel campaigns.  

Implementing Test Findings into Campaign Strategies 

After determining your campaign benchmarks, you can test your campaigns performance and decide whether it needs to be improved or can be adjusted for other channels.  

Testing through multiple channels can help you incorporate key findings to redefine and optimize your campaigns. You can try high-performing campaign creatives, copy, and call to actions on other channels to increase the likelihood of success on new channels. Just remember to adapt the campaigns for each channel.  

Having key performance indicators is essential for any campaign measurement framework to calculate success; a few critical KPIs to examine:  

• Return on investment (ROI) 
• Return on ad spend (ROAS)  
• Conversion rate 
• Cost per lead (CPL)  
• Cost per acquisition (CPA)  
• Website traffic 
• Click through rate 
• Cost per click 
• Impressions 

Success Studies of Tested Sponsored Campaigns 

Since consumer packaged goods are high-visibility products, brand awareness is key. The more your audience sees your label, product, and logo, the more you become top of mind.  

Using consumer data, Kentucky Fried Chicken (KFC), created their “First Bite” campaign, using extensive research that KFC found around the anticipation of their customers first bite experience. KFC utilized extensive customer research to identify the moment consumers most anticipate and recreate those moments using every element from the lighting to sound in the video. The video was then leveraged across various social media channels due to the in-depth research KFC did to gain a better understanding of what their audience cared about the most. 

Market research can help drastically improve the success of your campaign. Take EmberTribe for example, who thoroughly research their client’s target audience, along with their competitors and their content before conducting tests of their own. With the vast amount of research around their target audience, EmberTribe was able to create and test hundreds of ad variations, making adjustments and iterations based on successful ads, which resulted in them scaling to 400k unique sign ups per month. 

Conclusion 

Continuous testing improves campaign performance and maximizes results, which is critical considering all the time and money spent on strategizing and executing these campaigns.  

Paid campaigns can drastically improve CPG brands reach and conversions, helping brands stand out against rivals in a high-competitive, saturated market.  

By not testing, experimenting, and tracking your campaigns you can be losing out to the competition, wasting money, or even worse, losing customers and revenue if not executed successfully.  

If you want to stay top of mind and ahead of your competitors than testing your ads can significantly increase your campaign success and help you reach your business goals.  

Are you wondering how you can start optimizing your campaign performance? Check out dragonflyai.co to learn how you can create and test high quality creatives that convert.