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Shopper Marketing Actuals - Why Are They So Elusive?

Shopper Marketing Actuals Blog Header

Do you struggle with actualizing your shopper marketing events? You do? Well, you should feel good, at least you are trying. When we engage with CPG clients, we find that actualization is often such a huge pain that some organizations don’t even attempt to do it. The idea of truing up marketing events sounds simple in theory but is extremely hard to implement in practice. Today, I wanted to take a deeper dive into the shopper marketing event-level actualization process and explain why it’s complex and how our clients make this process easier.


Macro vs. Micro Actualization

Before we dive in, I wanted to stress the difference between financial actualization and event-level actualization. The former is often done behind the scenes by the finance departments at the total brand P&L or budget level (macro-actualization). The latter is done by marketers themselves to understand the actual costs incurred for each event (micro-actualization), to enable better forecast accuracy and more precise post-promo analytics. The focus of this post is event-level actualization.


What Types of Actuals Are There?

When we say “Actuals” we mean a few different things. There are at least four types of transactions that shopper marketers deal with:

  1. Third Party Invoices - a large part of shopper marketing spend, both working and non-working, is billed via third-party invoices, such as media vendors, data and technology providers, agency and consulting services. Depending on the process established by the CPG company, the invoices may be billed against previously issued purchase orders, in which case they are sent directly to the Accounts Payable department for processing. In other instances, where purchase orders are not used, invoices may first go to the marketer who contracted the vendor for their services. From there, marketers code them and route them for approval and payment. Whether a PO or non-PO process works best for shopper marketing remains a subject of debate. I wrote a short opinion piece on this subject several years ago.

  2. Customer Deductions - in the shopper marketing world, programs funded by Customer Deductions are becoming very common due to the rapid expansion of Retail Media Networks. Traditionally, deductions are issued by retail customers when they refuse to pay some portion of CPG vendors’ invoices due to damage, returns or pre-negotiated trade allowances. The vast majority of trade allowances are related to promotional price discounts, while others are related to marketing services provided by retailers to CPG brands. For example, when CPG brands agree to participate in a retailer’s sponsorship program, retail media campaign or a retail coupon offer, instead of sending a traditional invoice to the CPG vendors, retailers reduce their accounts payable liabilities by the cost of delivered media or redemption expenses they incurred. Deductions come to the CPG Accounts Receivable department as formal notices, usually as PDF documents containing the reasons for deductions. There they are processed, or “cleared” against relevant cost centers/budgets.

  3. Redemption - The variable part of shopper incentives, a.k.a. redemption is a sizable part of a CPG marketing budget, especially in the food and beverage space where most of our clients operate. Redemption costs are just one part of the total incentive program cost and represent the value of monetary price discount (in case of coupons) or reward (in case of rebates) that shoppers receive when they redeem the offer. Other incentive program costs, such as one-time offer setup fees, distribution fees (click/download fees for digital or printing and postage for direct mail offers) and clearinghouse handling fees are not considered redemption and should be accounted for separately. Tracking the cost of coupon incentives is challenging not only because they are uncertain in nature but also because there is no single source of all coupon spend data. I wrote about it in a recent blog post in detail. Manufacturer coupon incentives are processed and billed against an established escrow fund by the company’s clearinghouse vendor, while retailer offers that CPGs inevitably fund are often billed via customer deductions.

  4. Internal Cross-Charges. CPG enterprise marketing teams frequently procure goods and services from other departments of their own company. These expenses are called internal cross-charges (a.k.a. inter-company changes) and are yet another type of marketing expense you are likely to encounter. Common examples of such cross-charges in Shopper Marketing are internal creative agency fees, custom package design and printing, IRCs, charitable contributions to the company’s foundation, product samples and shipping chargers, internal consulting fees for analytics or other kinds of centralized services. These charges are reconciled each month via journal entries by the marketing finance and accounting team to ensure they are properly reflected on the company’s P&L and paid for from the intended budgets.

Shopper marketing actuals types


Why is Actualization So Complex?

The basic answer is that because shopper marketing as a whole is complex, actualization is just a subset of that complexity that has its unique challenges. Some of them come with the territory, others can be remedied:

  1. There is no centralized depository of event-level data. When shopper marketing planning and forecasting is too high level, haphazard, or inconsistent, the object of actualization does not exist. The unique events with their dates, tactics and vendors, promoted products and costs have to exist in a centralized system of record to tie all the actual expenses back to them. In other words, if you can’t easily tell what exactly must be actualized, you are not set up for success from the get-go. While a simple spreadsheet might be enough to manage a national media spend forecast, it fails to do so for a typical shopper marketing organization.

  2. Granular spend. Unlike national media programs, shopper marketing events are more localized and fragmented. The average cost of a shopper event is about one-tenth of a typical national media event due to its retailer-specific short-term promotional nature. The sheer number of programs and tactics can be mind-boggling to those who are not in the trenches.

  3. Too many vendors. Unlike national media teams where business is done with a handful of large partners or even just one media agency, shopper marketing deals with a much higher number of vendors. On average, close to 50. Each one has different billing cycles and naming conventions, which often don’t align with how CPG clients plan and measure results.

  4. Delayed billing.  While most vendors try to bill you immediately after the program is completed (or even up-front), it is not uncommon to receive quarterly invoices or have delayed billing due to suboptimal processes. This issue seems more prevailing on the customer deductions side, where deductions can come several months after the promotion has been completed. Shopper marketers have to manage this uncertainty by keeping their programs open for a long time, always expecting a “surprise” bill and hoping it won’t put their budgets in red.

  5. Multiple systems where shopper marketing actuals reside are seen as a serious obstacle to seamless actualization. Accounts Payable team owns a dedicated AP portal to process POS and invoices. The Accounts Receivable team clears deductions in a completely different system, which shopper marketers typically don’t have access to. Manufacturer coupon redemptions are tracked in a clearinghouse vendor portal. None of them speak to each other, and all of them have different data structures. Piecing it all together seems like an impossible task for marketers who don’t have a compassionate IT or Finance partner.


How To “Tame” The Actuals

Any organization that wants to excel in budget accountability, forecasting accuracy and post-event analytics must get event-level actuals under control. Best-in-class CPG marketing teams streamline and simplify this process by enabling the following capabilities:

  1. Establish a centralized planning and actualization system. Such systems can be Excel-based for smaller organizations with a manageable scope or a specialized software solution for larger teams and a bigger scope of work.

  2. Come up with a definition of an event. How you define the event will dictate what exactly needs to be actualized and measured. Is it a short-term single-brand tactic, like a digital coupon? Or is it an always-on search campaign? Or is it a multi-brand direct mail event around a season or an occasion? Or is it a multi-tactic push to support new item launches? These basic questions are often never discussed.

  3. Set expectations and deadlines for actualizing all events by a certain date after they end. Timely actualization will lead to agile ROI measurement and more continuous improvement.

  4. Collaborate with vendors to optimize the billing process. Some vendors may send bills that lump actuals for multiple events into one number, lacking important details about cost by retail customer, brand, or tactic. This makes it hard to attribute a bill to a specific event and manual splitting would be required. To avoid this work, ask your vendor if they can accommodate your data structure needs and provide more granularity to make it easier to match expenses to forecasts.

  5. Partner with IT and Finance to map and automate the process. Subject-matter experts in each of the various systems that store actuals should be part of the conversation. They can help you explore how to link your centralized planning system to the systems where actuals are stored. Direct integration is ideal, but it’s not always feasible. However, actualization can be semi-automated by running scheduled reports, combining and transforming data, and bringing it back to match your forecast via bulk uploads or VLOOKUPs.

All these ideas take time to implement, in fact, it can be a full-time job! If you feel your actualization process needs help but you are strapped for time, reach out to Shopperations. We offer a range of software and consulting solutions to enable digital enterprise transformation for busy shopper marketers.


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After more than 15 years in Consumer Packaged Goods industry, I became a software entrepreneur. Today, I design and sell Shopperations, a web-based, collaborative planning software for Marketers on both CPG and Retail sides, to enable transparency, accountability and stronger Shopper Marketing promotional analytics. I am passionate about all things Retail and Shopper Marketing, love reading about Neuroscience progress as it relates to shopper research, and care about process improvement and marketing automation technology.
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