Marketing CPG Brands at the Algorithmic Crossroads
For decades, consumer packaged goods (CPG) brands have mastered the art of marketing, making everyday moments special by understanding two fundamental principles: brands must be easy to recall and find, and advertising is most effective when it reaches large audiences who know that others have seen it too. But in today’s media landscape, the rules for achieving that reach have changed.
We’re now at a crossroads. Algorithms are rewriting the marketing playbook. Nearly 60% of global advertising investments are already influenced by algorithms, and that figure is set to reach 79% by 2027. CPG brands must adapt quickly to thrive in this new Algorithmic Era—an era in which AI-driven algorithms dictate who sees what, when, and how often.
The Evolution of Shared Scale
Not long ago, shared scale was built through traditional broadcast channels—think prime-time TV ads, newspaper spreads, and live event sponsorships. These moments brought people together and made brands famous overnight. Then came the Precision Era, where social media and digital platforms shifted the focus toward mass personalization, performance marketing, and return on ad spend (ROAS). But in chasing hyper-targeted efficiency, something critical was lost: brands became too niche, sacrificing the collective awareness that fuels long-term brand growth.
Today, consumers interact with media differently. Social platforms are more about entertainment than connection. Retail media networks blur the lines between brand and shopper marketing. AI is reshaping purchase decisions, with smart assistants and algorithms determining which brands get seen and which are ignored. Simply put, brands must rethink how they achieve shared scale.
How CPG Brands Can Win in the Algorithmic Era
Carat’s latest thought leadership report, CPG Marketing at the Algorithmic Crossroads, outlines six key strategies for brands navigating this new landscape:
Win the Battle for Algorithmic Availability
To influence consumer decisions in an AI-driven world, brands must ensure they are algorithmically visible. This means getting the fundamentals right—SEO, taxonomy, naming conventions, and data tagging—so that search engines, retail algorithms, and social platforms recognize and prioritize your brand. Investing in predictive AI modeling and collaborating with IT teams on data transparency will also be critical to success.
Pioneer a New Way to Find Growth Audiences
Mass personalization alone no longer delivers scale. Instead, brands should focus on identifying high-value communities—people who form tight groups around shared passions. Using proprietary audience mapping, Carat’s growth mapping approach enables brands to pinpoint and activate these communities more effectively, balancing broad reach with relevance.
Create Equal Opportunity Across All Touchpoints
Retail media networks have transformed shopping experiences, with AI-driven recommendations appearing everywhere from search results to TikTok feeds. To make smart investments, brands need a holistic view of their marketing mix, ensuring cultural and commercial moments are optimized together. Carat’s research shows that reallocating just 8% of a brand’s budget from shopper to brand marketing can boost reach by 1.6% and frequency by over 5%.
Fuel the Rise of Experience Planning
Traditional media planning is no longer enough. Instead, brands must adopt experience planning, integrating communications and content strategies to win in an algorithmic-driven media landscape. This means designing dynamic marketing systems that evolve in real time, ensuring each audience sees the right creative, in the right moment, at the right touchpoint.
Anticipate Outcomes, Don't Just Measure KPIs
CPG brands must shift from backward-looking measurement to predictive analytics. Instead of just tracking historical performance, the best marketers will forecast cultural shifts, sentiment changes, and emerging trends—adjusting strategies in real time to maximize impact. Carat’s adaptive forecasting approach helps brands beat expectations rather than simply meeting static KPIs.
Reimagine the Retail Media Value Exchange
Retail media is one of the fastest-growing advertising sectors, but it’s often an irrational market, with retailers maximizing their returns at the expense of brands. To build true retail partnerships, CPG brands should leverage data collaboration, incremental customer insights, and enhanced shopper experiences. Those who do will gain a competitive edge in an environment increasingly governed by AI-driven purchase decisions.
What This Means for CPG Marketers
The Algorithmic Era is filled with challenges, but it also presents unprecedented opportunities. AI and algorithms will streamline operations, accelerate content production, and unlock new efficiencies—but the real advantage will come from enhancing marketing effectiveness. The CPG brands that win will be those that use algorithms not just to optimize but to create breakthrough moments of brand fame.
The six strategies outlined in this report can unlock:
✔ +15% increase in attentive reach and frequency
✔ +10 to 30% improvement in marketing effectiveness
✔ +50% faster speed to market
Are You Ready for the Algorithmic Era?
The future of CPG marketing will be shaped by those who embrace this shift, leveraging data, AI, and creative strategy to build brands that win in an AI-driven world.
Download Carat’s full report, CPG Marketing at the Algorithmic Crossroads, to discover the actionable strategies and insights that will position your brand for success in 2025 and beyond.