Ads Share is strategic for promotional performance in retail

Did you know that a pencil can write a straight line of up to 56 km? That sharks go into a coma if they are upside down? That “anatidaefobia” is the fear that a duck is watching you? Curious? For here is another surprising fact: with intelligent management of Ads Share, it is possible to significantly boost the market share of your brand.

Simply put, Ads Share represents the participation of a brand's promotional offers within the category's total ads. For example, if brand A has 5% Ads Share in the yogurt category in a given period and region, it means that 5% of all offers served in that category were from brand A.

What is the relationship between Ads Share and Market Share? Several factors explain market share variations and one of the main levers is the volume of promotions. This is particularly relevant in the FMCG market or high-turn consumer products such as food, beverages, hygiene, beauty and cleaning products.

In this segment, on average, from 30% to 35% of what is sold in retail (supermarkets, hypermarkets and wholesale) are through offers. That is, practically 1/3 of what is sold in these channels are promoted products. In some chains this percentage can reach 50% and 60%!.

It is known that efficient offers generate greater flow in the store, as well as more additional sales from other categories. It is the so-called “elasticity cross”, where the amount of demand for one item/category reacts to a price change of another item/category.

From a retail perspective, the gain is obvious. Already from the point of view of the manufacturer, this can generate a positive impact especially for those who have multicategories in their portfolio.

Usually the negotiation between retail and supplier in promotional issues occurs from the perspective of category to category (and their respective SKUs). But, what if you looked at the interrelationship between the categories that manufacturer works?

Having the right information, it is possible to promote a certain category, relating it to another of your portfolio. In this case it would not be necessary to sacrifice the margin of both, because most likely when a shopper buys category A, he will also buy category B.

So why lower the price of both? Well, but then you can ask: “who guarantees that the shopper will not take the category B of my competitor and I sell only what I promoted?”.

Here's another concept: “Every promotion is an offer, but not every offer needs to be an” promotion. But, how so?An offer does not necessarily need to deliver a price or quantity advantage (already the promotion, yes). It needs to be communicated effectively.

One of the tools is to use the promotional mechanics intelligently. If I take, for example, only item A, the price is, say, R$ 10. If I also take item B, the price of item A passes to R$ 6. Item B keeps the regular price (but it can not be much more expensive than the average) Obviously both items from the same manufacturer. As it is already known that there is a very strong cross elasticity between items A and B.

With this, this manufacturer leverages the sale of two items, being able to raise the market share and still protect the margin (for the manufacturer and the retailer). All this is possible through the collaboration between retail and industry and also the intensive use of data.

Internal data from retailers (through their CRMs, for example) to understand cross elasticity, market price data (after all, the promotion price of the partner retailer cannot be higher than its direct competitors), meteorology (if your product is affected by the time/temperature variable), clear definition and knowledge of your target audience to tailor the language and media to be used to disseminate the offer/promotion, among other information, are essential.

As Peter Drucker said: “O which is not measured, cannot be managed”. Ads Share, therefore, becomes a strategic indicator of promotional performance.It helps brands understand their relative exposure and adjust actions to gain space against competitors.

In the end, promotion is not just a sales trigger - IT is a brand building and market share conquest tool, when well thought out, executed with intelligence and measured with rigor.