The Relevance of TV Advertising for FMCG/CPG Marketers in 2018: Insights from a Startup Perspective

In 2018, television advertising played a crucial role in the marketing strategies of consumer packaged goods (CPG) and fast-moving consumer goods (FMCG) brands. However, its relevance varied significantly based on the size and goals of the brand. Whether TV advertising remains a valuable channel for startups in this digital age will depend on how effectively one can leverage it to achieve desired outcomes.

Understanding the Context

For startups in the consumer product space, the landscape is largely different from that of large brands. Without a significant budget or brand recognition, finding the right advertising medium is a strategic challenge. This article explores the relevance of traditional TV advertising and how startups can optimize their campaigns to maximize ROI.

The Challenges

TV advertising, when approached correctly, can provide startups with significant advantages. However, the initial challenge lies in identifying the right product to market. A “WOW” product that captures attention is essential. Unlike brand advertising, which relies on building long-term brand awareness, direct response advertising focuses on immediate customer action.

Direct Response vs. Brand Advertising

Direct Response Advertising: Direct response advertising includes a call to action in the ad, encouraging viewers to respond immediately. This is particularly useful for startups as it allows for quick and measurable results. Metrics such as conversion rates and sales can be monitored more closely to gauge the effectiveness of the ad.

Brand advertising aims to build brand recognition and trust over time. While it is a luxury often reserved for large brands, it can take months to show any positive impact on sales. This makes it less viable for startups with limited budgets and time.

Optimizing Campaigns for Success

The key to successful TV advertising, especially for startups, is to optimize campaigns for the best return on ad spend (ROAS). ROAS is calculated as gross sales divided by advertising spend. To achieve this, startups should not rush into analog advertising (such as national and pay TV) right away. Instead, they should start with digital advertising to test and refine their messaging.

Digital advertising is cheaper and faster to test, allowing startups to experiment with various messages, keywords, headlines, taglines, and landing pages. As successful strategies are identified, the budget can be gradually increased across both digital and analog channels. This strategic approach ensures that analog advertising is only penetrated when there is a proven track record of success from digital advertising.

Key Considerations for TV Advertising

When considering TV advertising, startups should ensure that the ROAS is at least 7 for digital campaigns. This benchmark helps in validating the effectiveness of the campaign and provides a strong foundation for allocating budget to analog advertising. Here are some tips for optimizing TV advertising:

Prioritize direct response ads that include a clear call to action. Use measurable metrics to evaluate the success of each ad campaign. Invest in digital advertising to test and refine messaging before stepping into the more expensive analog channels. Ensure that any investment in analog advertising yields a positive ROAS, typically around 4 or higher to justify the increased cost.

Conclusion

While traditional TV advertising can be highly relevant for startups with a “WOW” product and a direct response orientation, it is crucial to approach it strategically. By leveraging digital advertising to test and optimize campaigns, startups can build a strong foundation and then transition to analog channels more effectively. This dual-channel strategy allows startups to maximize their impact and achieve sustainable growth in the competitive market of FMCG and CPG.

Key Takeaways: Direct response advertising is more effective for startups. Optimize campaigns for ROI before investing in analog advertising. Use digital advertising to test and refine messaging before transitioning to TV.

Ultimately, TV advertising can be a powerful tool for startups, but it requires careful planning and execution to achieve the best results.