Welcome to The Month End CPG community chat, The Month End will provide emerging CPG brands real life knowledge into the accounting, finance and operational world. Our guests will be key stakeholders from those same brands as well as other key contributors to the industry. Alright, welcome to episode 35. The Month End podcast today we have Tom Burgess from snip interactive. How're you doing today, Tom?
Hey, Brad, I'm doing very well. Thanks for having me.
Good excited to chat a little more on the kind of marketing advertising spend today as it relates to emerging CPG brands, who is our target audience. So before we get started, let's get a background of yourself as well as Snipp Interactive and what you do for them and what you do for your customers.
Yeah, so I'm excited about being here, because I'm also a founding entrepreneur, for companies myself over the last 25 years and all those companies have been focused on advertising and data and loyalty. And I've even secured some patents along the way, but basically, on the innovative products that we've developed to support CPGs, and retailers in the digital marketing and like consumer acquisition efforts. I'm president of Snipp PMN. So this is a division of Snipp interactive, where Snipp payments Media Network, and I'm also an active board member and advisor to early stage companies. I focus primarily in my background on product development, guerilla marketing, culture, management, corporate development all that stuff that you do as an entrepreneur, right, that's, that's what I've done. Snipp PMN man, if you want me to keep going, I can. Yep, kick off. Yeah. So Snipp PMN is a performance based advertising marketplace. And it reaches more than 70 million shoppers, meaning that if you're a brand trying to drive sales, then we have eyeballs. And we are able to target those eyeballs based on shopping history, and geography and by retailer. So we have about 30 retailers where we work directly with their data. And we are able to reach those consumers in a way that we see them making purchases. So if a offer or an ad is in play is placed in front of those consumers, then we know when they bought the product, and the unique piece of Snipp PMN is, and this goes along with payments media network is that we do this through banks. So we reach consumers. And this is unique. And this is new. Through two of the top five banks currently, so Bank of America and PNC Bank, and hundreds of small banks. And we'll be launching in 24, 2024 with other top five banks. So and what do I mean by that we reach consumers when they're in their banking application, we all do it, right. We're all banking app users. And in the banks place these CPG levels or SKU level offers in front of their consumers, in their app users and their card holders, so that the consumer will use their card right? So Bank of America putting an offer up for a product to be purchased via that card at say Albertsons or Kroger or Stop and Shop, depending on geographically where you are. So anyway, that's, that's Snipp PMN. And, and, and we work with all different types of brands on making sure that we're reaching the audience they want to reach. So I'll pull up there is that good?
That's a that's a great, great start and a great background to kind of start the conversation. So from an aspect of a CPG brand, like I guess let's kind of go through the different phases right of an emerging brand versus a midsize to like an enterprise level brand. You guys have different offerings or solutions for those different company and entity sizes?
Yeah, so you know, when I look at any brand, when our team works with the brands, we assess what their goals are, what their budget is, who they want to reach geography, etc, etc. Right? You have shopper marketing dollars, you have national marketing dollars. Some smaller brands just simply say "I need to drive more sales". Medium sized brands will have a marketing team internally, and those enterprise brands will have maybe multiple agencies involved. So everybody's slightly different. And we try to package it up, like you said, you know, to fit the need. The biggest need is making sure that they're getting the best bang for the buck, especially with the economy the way it is. So when a brand is saying, "Man, I gotta spend marketing dollars, but I need that ROI. I need to be able to track is it working for me". So that was over the 30 years in my career. I've always been involved in this advertising, as I mentioned a moment ago, but the hardest thing to do is know if your advertising is working. So in our Snipp PMN model, we are tapping into the purchase data. So we know when a consumer makes a purchase. So for the smaller brands, we put together packages that allow them to pay us only when somebody makes the purchase. So we know that the consumer in our network saw the ad. And we know when that consumer went to that particular store, if they want to target a particular store, and we know how much they paid. So you get all kinds of data, you know, taking Snipp PMN out of it for a minute, and just thinking about a startup or a early stage business that's trying to use their money, the most efficient way possible. If you can use that money and a model that guarantees you an ROI, then you're in the best possible spend model, right? So you know, I mean, you guys advise your clients, on how to spend your money, where what money you're spending is getting the best return on that spend. That's what we focus on, we focus on giving back that data. And there's a whole bunch of other data that we get back.
Gotcha, gotcha. But all makes sense. And, you know, if we look at a lot of our kind of folks in the CPG network that we collaborate or work with, or our clients that they're selling, you know, via omni channel, let's say, in the retail stores, on their website typically via Shopify and Amazon, Faire, Mabel, all these different resellers that exist, right? And in the past, let's say, three, four years ago, when I think funding and cash was more prevalent in terms of a small business raising money. A lot of times you'd see growth companies just grow top line very quickly. But then you look at basically their, their Google ad spend their you know, that Facebook ad spend, and it's just dollars and dollars and dollars. And there's really no direct correlation in terms of, you know, like, did that dollars actually go to a sale, right, um, clearly, you can do a calculation and metric costs to acquire a customer and those types of things that you can do with that. But really having that spent happening when a purchase happens, to me is more key and and much more efficient and leveraging that cash model, especially, you know, in today's day and age, like you said, with the academy where it's at. So from a from an aspect of a, again, a small brand, leveraging somebody like a technology and a product like yourself, how does that fit in with the traditional kind of, I guess, digital ad ad tech models and workflows that have existed?
Yeah, so I'll take off my, my Snipp hat for a minute, right? I'm talking to another fellow entrepreneur that's launching something or is in the midst of branding something, and and I'm a big believer, this is my view, you need to spend marketing dollars to position your brand, right, you need those digital media, traditional Facebook, Google type of spend to just put your brand in front of the right eyeballs. So you get that corporate positioning, and you get that product positioning, key key key, right, you also then need to add in that model that drives the consumer to make those purchases, right, that's so I think it's a blend personally. And when I'm talking to people, I don't just sit in there. And of course, it would help me greatly if I just said, Oh, spend all your money on performance. And come on over, we got 70 million people. And by the way, you can go to Ibotta. And you can go to Fetch those. They have, you know, audiences that are similar to ours, except you want to spread your spend, right? So you spend on your positioning. And yeah, that ROI is tough, man, it's, it's not that kind of ROI that's directly tracked to your sales, it's tracked to the growth, like you said, drive in that top line, right. And if you're getting your brand out there, just getting picked up and people are starting to get familiar with it, then they'll recognize it on shelf or online, when they see it pass by them, that's key, got to do it. Then you spend in the performance channels to actually drive sales. And now you can look at all of that together. When you're looking at your BI or your your dashboard. If you will have metrics you're learning, okay, my media mix, my spend of my marketing dollars is driving X overall, you got to mix them all together. And and when you're going after, say that particular retailer, maybe it's Albertsons or Kroger, as we were saying earlier, you know, it might be whatever retailer that you want to push your product through. You need to look at what kind of marketing they're doing too, and you have retail media networks now. And so there's all this stuff that you can do, but it needs to be a mix. That's that's what I say all the time and, and it's proven out time and time again, when you do a mix, you feel better. You see your numbers you can optimize maybe your marketing is, you're coming into the end of a quarter, maybe you have an investor a board meeting coming up, right? And, and you need to drive up your numbers a bit. So go spend a little more money on the performance side, drive some sales up, because that'll help your branding side, maybe it drops down a little bit, and you put a little more dollars towards your spent your, your performance side so you can drive more sales. You know, these are things that you got to do to mix it in.
What are some of your favorite kind of KPIs? You look at, you know, to track the performance of you know, what we're just talking about there?
Yeah, so it's different for every brand, of course, depending on the audience that you want to reach, but KPIs the key one that everybody wants to know is ROAS or return on ad spend. All right, that's kind of the mother of all e-metrics. And you need the data in order to get that. So you need to know how much you're spending, of course, you need to know the audience you're reaching, how big is it, you need to then know, are they interacting, and that's kind of the first level. And then if you can get your true ROAS or return on adspend, you know, how many sales or what volume of sales did we drive? So you take your dollars that you spent, you compare it to the dollars that you made through the tail or through sales? And then you come up with your return on ad spend metric? There are other key performance indicators that people want to have. Where it says, "okay, if I'm selling in this geographic region, is it going well at but I've got to break into this geographic region. And how is that going well", or "how am I doing with this retailer, because a brand will want to go–and this is one of these key metrics that becomes important as a brand is trying to secure a better relationship with a particular retailer. You want to drive sales through that retailer, so you get more prominent placement in their stores or on their website. So those are metrics that you want to maybe influence, right? So you say, "Okay, I'm going to part I'm going to particularly target the Albertsons, and I'm just picking a retailer here in the Albertsons audience, and I want to drive some sales there, so that Albertsons look favorably on me, so that I, as the brand can go get better placement and have better negotiating capability with that with that retailer". So these are all the things I mean, and then you know, KPIs go, you know, they start off with what are your top KPIs? And then they can, you know, there's a long list of other things that you want to track course. But typically, they're driven by what your overall goals are, right? If your goals are to drive sales, you're going to you're going to be driving a more heavy on the metrics of how many people am I reaching? How many sales have I actually transacted? What's my conversion rate, those types of things?
Gotcha. That all make sense. What, uh, you know, since you're on the kind of the frontlines of this data, like, what is what do you stand for about trend trends in the CPG space? from a consumer standpoint?
Yeah, great question. Perfect question. So, you know, we saw that, obviously, everybody knows that COVID changed the behavior of people that the key metric that happened there was loyalty kind of went out the window, right? People weren't so loyal to their specific brands, because they were just looking to get product, right? So consumers, like you and I, we all are, we might have drifted off of a brand that we would normally have bought. And we started to try other things, because maybe that store was an easier store to go to. And they didn't have the brand that I was used to buying. So there's this current trend of brands trying to reinvent the loyalty metric trying to get back to maybe win lapsed buyers, or acquire new buyers that they wouldn't have been able to acquire this easily before because they were so loyal to a competitive brand. So these are metrics, or they should say these are trends that we see right now, where we have retailers and brands partnering together to promote offers to do more of a an acquisition style advertising as opposed to what they used to do, which was let's sell more to the existing customers. Right? So there's a big big trend and recovering or taking advantage of that. That complete almost wiped out loyalty program. So I think that's the key thing. It's this is an opportunity, right? It's chaos, and chaos is opportunity. And so and by the way, there's also So a lot of new metrics that are available because of the data that's out there, retailers didn't typically offer their data out, it was a golden goose, it was the treasure trove, they held on to it very tightly. But the trend of retail media networks that's growing incredibly fast, has allowed CPGs, or just any consumer brand fast moving consumer brands to access or allows them access to new data data they hadn't had before. And it can be used for targeting it can be used, because there's data is used. And I'm sorry, if I'm on a rant here, but this is kind of a unique position, if you're thinking of what's available to me as a CPG. Data really falls into three categories: (1) free marketing, so I can build an audience based on the kind of audience I want to reach. And guess what the brands and and the retailers are working together now to build audiences, then you use data during a campaign. So (2) in-flight management, or in-flight optimization, that's what it would be called right? So now you're getting data in there, and you're starting to see what's working and you optimize your campaign, maybe you change the copy in an ad or you move your ad to a different audience that's operating or performing better than the audiences that you picked when you were setting it up pre-campaigns. So that's, that's mid-campaign. And the third area is (3) post-campaign analysis. And you're now taking all the data of all the stuff that happened, and you're looking at it so you can understand what you might do next, you're also building out your ROI, you're building out your ROAS and you're figuring out what we "did we spend well,?" "Did we do a good job here?" And that is like a flywheel. And that just keeps going. And the brands that are doing it well, are spending time on those different data points and recognizing how each one's different. You can you can't do just one you got to you got to really focus on it.
It's fascinating. Are we seeing more customers or consumers like going back to physical retail stores? Since COVID? Because clearly, like I know, you said that habits have changed and you know, my my household my wife and I'm and we hardly ever go out, you know, physically anymore just because of the just the convenience of everything right. But I'm I'm wondering just as a as a general, like whole aspect of society. Is there any data that you've seen, or trends that you've seen just on how consumers shop these days?
Yeah so, I, you're right, we all do that. I mean, I'm, I walked downstairs the other day, and, you know, sitting out in front porch was a Walmart bag. I don't even see the person drop it off, right? You know, my wife was like, and I come in with the bag. And I say to my wife, you know, did you do this? What's this? Is this right? And it's funny. And she's like, I just wanted to test the Walmart delivery program, right. And it worked well. But there's, there's an interesting thing that the trends show and I don't have specific but I do have data I could bring I'm sorry, I don't have it right here. Maybe we can post it later. But it is, you know, there was a complete spike of ordering and delivery. And that whole category exploded. We all know it right? That's come way way off. Partly due to the fact that people like to shop, they like to get out of the house, we like to walk the halls or the aisles of a store and see the products and pick what they want. People really enjoy grocery shopping. I mean, it's an interesting trend when you look at different categories of retail. And what's happened grocery is obviously doing very very well right now. Part of it's due to the fact that people are back on the street and getting out and doing things but there's a there's a trend in grocery also towards self checkout self management as a consumer and and so it's making shopping in store easier that retailers are honestly I'm struggling a little bit with it because there's a little bit of fraud that's associated with this change and everybody's trying to figure it out. But but it's a lot easier now to walk into a store, walk through the aisles, pick up what you want walk basically right out. You self checkout and you walk out the door. So all of these things combined, where the retailers are reacting as well to "come on back to the store will make it easy for you". So this is a trend that is interesting to watch. I will add one more thing and say that the trend of lower cost retail chains and the growth we see larger called them stalwarts of the retail industry having struggles we all know Rite Aid right now going through a struggle we I see something like Dollar General growing like crazy, right. So you see this trend too. And and I think there's still data to be found on why that is. It's it's not that those retailers are appealing to an existing market that they've always appealed to, it's obviously spend shift or share of wallet shift, where consumers are saying, "I can get the same products, because of what happened in COVID, I get the same products I was getting at the fancy store, I can get it at the other store". So there's that type of change that's happening as well.
It's interesting in terms of your prior kind of statement a couple of minutes ago, related to kind of like people just wanting to self checkout, and just kind of walk the halls in the aisles of the grocery store, but not be bugged and just handle everything themselves, basically kind of like they are literally checking out on your computer. So it's very fascinating how that's working.
That's a really cool point you make right it, the easier the checkout, the the more comfortable the consumer is and where they're shopping, right?
Correct. Correct. Because when they're on their computer, it's an easy checkout aspect or their phone. Right. So like, they want to have that mirror the same experience as that when they go to, you know, physically to to the retail store. So this is all great information, we're gonna be wrapping up the podcast here, we typically end with one, you know, CPG industry do and one CPG industry don't, you know, for the listeners out there, but I don't want to target kind of the CPG space here, like just because of your background. And as an entrepreneur and multiple companies that just, you know, considering, let's say, a brand new zero to $10 million startup company, right? What is just kind of one general do or recommendation that you'd say to a founder out there?
Yeah. So this is a good one, because I, I have the benefit of having a CMO as a wife who works with these sized companies, right. So her and I obviously talk about everything that goes on in our lives. And, you know, the biggest and probably most impactful things that a smaller, a smaller company, an emerging company can do today is leverage the data that's available. This was harder 10 years ago, right. But today, the data that's available is amazing. And people tend to be "Oh, I don't understand it. I don't know it, I don't I don't you know, it can't get into that I can't learn because I'm so darn busy, right?" It's worth it. If I had anything to say to any company at that stage, I'd say spend the time, whether you do it, you have staff that does it, you work with an agency or a fractional service provider, which is outstanding, which is the trend. And if you're not working with fractional service providers, you're crazy, because you get all the benefits with the lower cost, but you need to access that data. It will tell you, it's like a coach, right. And that in itself, it's a it's telling you what you're doing well, and what's not working for you. So I think, take the time to look at the data that's available and set off campaigns and/or marketing or other strategies doesn't have to be all in sales and marketing, right? It can be coming out of your own efficiencies, it can be your operational data, and, and believe that data like look at it collect it, spend the time upfront, to make sure that whatever you're doing is being analyzed by the performance and the data, the data that you can get in through the transactional process. Right. So once your now and that then lead you to making the right decisions going forward.
But on the flip side, what is one don't?
Yeah, there's so many things on the don't too, right. So this is a tough one, I would say primarily if I had to speak towards the marketing, because that's been our theme on the discussion. I would say don't spend money on a whim, don't spend money on things that come up, and they look like the next shiny cool thing to do. Stand by your budget. Take your budget, analyze it, if you do it annually first and then you check in quarterly as you're as you're moving along and adjust, but stick to a plan. There's this thing of entrepreneurs it's our addiction, right? We want we want to get it done, man and I'm on I'm addicted. Yeah, you know, right. Yeah. And that that shiny new thing comes along and you're like, that's it man. That's gonna change. And you gotta you gotta just pull yourself. We'll reel yourself back in, look at it. Analyze the opportunity. Do you maybe put it in in two quarters, if you can work the next year? It but stick to your guns, it's that's probably the hardest thing to do is to stick to a budget stick to a plan.
I would agree with you as an entrepreneur and from a from an accounting standpoint, where we're Accountfully is I've learned a ton, just on the marketing side and the brand equity and kind of the consistency of content and moving forward. And you see, it doesn't just happen overnight, or within a week where you that's where you want it to be now it's like, hey, overtime, it'll get there and stick to a plan and implement that plan and assess it over a specific time period. Really helps. So I've learned a lot just from that perspective, and as well as this chat with you, Tom. Well, I really appreciate the time, Tom, it was awesome. I hope that listeners get a lot of information. As we wrap up here. Where can people find you and Snipp and just kind of give them some other information on where to go.
Yeah, Brad has been awesome and a great conversation so I'm easy to find at firstname.lastname@example.org So that's my email Tom.Burgess@snipp.com and Snipp.com is is our website, obviously. So those are the places you can find me obviously LinkedIn too, feel free to chase me down there. But yeah, I'm an addicted entrepreneur addicted to all of this stuff. So I'm an easy guy to find.
Awesome. Well, Episode 35 In The Month End podcast, Tom Burgess from Snipp Interactive. Thanks again, Tom.
Thanks, Brad. It's great talking to you. Great to have with you.