Why Digital Advertising is Different for Food Brands
Having started Chicory, I have had the unique opportunity to brainstorm and talk with leaders from a variety of different companies. I get to work with publishers, retailers, advertisers and ad-technology companies. It has helped us to fully understand this landscape, get a sense of how it has changed over the past few years and, most importantly, understand how Chicory fits at the center of a few industries.
It is undeniable that digital is now the norm. People spend between 20 and 27 hours a week online, according to a report in The Telegraph which summarized the findings in Ofcom’s Media Use and Attitudes 2015 report. And not only are they surfing the web, but they are buying online too--85% of US grocery shoppers have bought electronics, books and music online, and 77% have bought clothing or shoes, according to this report by Catapult Marketing.
But take a look at food. That same report says only 4% of U.S. grocery shoppers bought fresh food and produce online (granted this was back in 20, so things have started to change here). That's a staggering difference in adoption.
Following this trend, online advertising technology has largely skewed towards catering to those former categories (electronics, books, music, clothing, shoes) because more money is spent online by consumers making purchases in those categories. Applying the same digital marketing and advertising tactics to food, however, is pretty much impossible. What do I mean by that? Let's break it down:
Search Marketing: if someone is searching for "where to buy glasses" in NYC, Warby Parker can easily identify those consumers. This doesn't work for food brands because no one is searching for "where to buy Chicken in NYC."
Retargeting: if someone visits WarbyParker.com and adds an item to his or her cart, Warby Parker can follow that person around the internet, serving ads on the sites they visit, luring that person back to their site. This doesn't work for food brands because food companies rely on retailers to move their product and rarely have their own eCommerce storefronts.
ROI Optimization: during a campaign, targeting can be catered towards consumers that are actually converting, creating a reliable cost of customer acquisition. This doesn't work for food brands because, again, there is a disconnect between engaging with an online ad and buying a product in-store while online grocery remains a quite small part of the industry.
Because these types of targeting and optimizations haven't worked, brands are now complacent with using simple demographic and geo-targeting in order to reach online food customers through brand awareness campaigns. When we talk with brand managers they tell us that every "25 to 45-year-old woman living in the Midwest" is in the market for cheese all the time.
Really? All the time? There has to be a better way to reach the right consumers at the right time. We're not sure what that solution looks like, exactly, but we're having a lot of fun testing out our ideas for creative solutions.