Digital CPG Blog

Jimmy Dean wanted to solve those traditionally tough coupon problems of distribution and targeting and turned to a shareable coupon campaign. Here’s how it worked:

Basically the coupon campaign, which ran for a month, allowed online users to print off a coupon worth $1 off a 4-count pack of D-lights. However, if they chose to share the offer with three of their friends via email, Facebook Twitter or MySpace, they could score a coupon worth $2.50 off the same merchandise.

Sounds like the Huggies campaign right? So, did it work? Oh yes -

According to metrics provided by SocialTwist, in the 30 days the Jimmy Dean D-lights coupon campaign ran, more than 64% of users who came to the microsite opted to refer the coupon to their friends and get the higher rebate. Of those referrers, more than 70% of the sharing was done via email, while 27% of users shared over Facebook, and 1% each over Twitter and MySpace.

However, when it came to which channels produced the most clickthroughs from those referred friends, Facebook won out at almost 41% of shares, compared to only about 30% for email. And although it had fewer users, Twitter proved almost as effective as email in terms of driving traffic from referred friends: 29.35 of those who saw the referring tweet from someone they followed went on the click through to the microsite.

Word of mouth works best when it comes from those you know and allowing your customers to spread what’s valuable to them to each other is always important. This type of deal is still early enough that it can still be incredibly effective, so don’t wait to get on the bandwagon!

Generation C is here and we’re always connected and want everything at the speed of a click. What does that mean for the stalwarts of CPG? Well, it’s another C word – change!

“Most people are not as good at dealing with change as they think they are,” said P&G’s VP of e-commerce, Alex Tosolini. While he personally has moved about once every three years in his P&G career, he said some employees have essentially been in the same office for 27 years.

“I personally believe one of the skills of the future will be the ability to thrive on the change,” he said.

Blurring of the marketing and sales/distribution functions is one of those changes, Mr. Tosolini said, noting that Facebook is both a marketing and a distribution channel as P&G has worked to develop “f-commerce” capabilities on its fan pages, fulfilled by Amazon, which has become a top 10 retail account for Pampers.

“All of a sudden the traditional model of marketing does this, sales does this is blurred,” he said. “Think about the implication for big companies on their need to adjust their reward system, their skill development, their training of their people to understand how to cooperate and work in this new environment.”

Are you seeing your organizational structure change? Are your marketing and sales departments mesh and merge? How will the new digital economy shape how your company is structured?

With all our talk on digital coupons, you might think we’ve forgotten paper coupons – not so!  Paper coupons are still king –

According to NCH Marketing Services’ Coupon Facts Report, 2011, freestanding inserts in newspapers account for 87.7% of U.S. CPG coupon distribution. The rest consists of in-store handouts (5.2%), direct mail (2.4%), magazines (2.2%), in/on pack and cross-ruff, an on-pack coupon redeemable on a different product (1.1%) — and finally all other, which includes all digital formats, at less than 2%. Most industry sources peg the percentage of digital coupons at 1%.

But digital coupons are where the growth is at –

When it comes to growth, however, digital is where the action is, albeit from a small base. Aided by the tough economy and rising food prices, total CPG coupon redemption grew 3.1% last year, and distribution jumped 6.8% to 332 billion, according to NCH. But the number of coupons available at major online distribution sites increased by 33.6%, and the number of manufacturers offering them (290) grew by 17%, according to Marx, Minneapolis, a division of Kantar Media.

And if my building is any indication, despite the prevalence of freestanding coupons appearing in our mailboxes, those go straight into the recycling bin whereas the Groupon and Living Social deals get emailed and shared.

Forrester tried to claim last week that Facebook will not drive e-commerce.

Uh… have they been awake lately?

Lucky for Facebook, they were able to show exactly how the site is driving commerce earlier this month. After all, where there is community, there is commerce.  Simple as that.

Facebook has long promoted the value of such social ads, saying that word of mouth from friends is more valuable for users and marketers alike than generic marketing messages. The company now says that, similarly, e-commerce sites are increasingly benefiting from tying their services into the Facebook platform. In other words, Facebook says a purchase shared on Facebook generates more purchases from friends.

“We now have a direct link between sharing on Facebook and revenue generation at e-commerce sites,” said Dan Rose, vice president of partnerships and platform marketing at Facebook. Mr. Rose said that 18 of the top 25 e-commerce sites are using Facebook features like Facebook Connect or the “Like” button. Giantnerd.com, a shopping site for outdoor gear, saw a doubling in revenue generate from Facebook within two weeks of adding the Like button, Facebook said. American Eagle saw users referred by Facebook spend 57 percent more than average on the site, Facebook said.

Nothing like some hard numbers showing your relevance and dominance to prove the naysayers wrong.

We talked yesterday how consumers want Facebook and coupons in their online interactions with a brand. But I wouldn’t recommend putting up a Facebook page and littering it with coupons. Because while consumers say that’s what they value most, the real thing that consumers want is an entire brand experience.

In the Brand Keys Customer Loyalty Engagement Index, consumers defined brand value ‘not through the narrow lens of price but in terms of the total experience that consumers have when they interact with a given brand,’ said Robert Passikoff, Brand Keys founder and president.

So make sure the Facebook and coupons are not the end in and of themselves, but pieces of  your larger strategy to show how your product can create a meaningful experience in the consumer’s lives, not just how it can help their pocketbooks.

“This year consumers’ skyrocketing desire for experience and authentic innovation are exerting the strongest impact on customer decision-making and profitable engagement with the brand. Brands able to meet or exceed these expectations become category leaders. ‘This only matters, of course, if you’re keeping score by counting sales and profits,’ Passikoff argues, ‘and not merely tracking awareness levels.’”

“Products that respond with a truly consumer-centric view of their category – delighting the customer – based on predictive loyalty metrics, stand to gain the most and establish themselves as this decade’s brand leaders.”

Mostly, consumers want Facebook.

In a new Ad Age/Ipsos Observer survey of digital-media habits, “41% of respondents said they want to receive communications from marketers on Facebook — more than double any other digital platform. One in three said it was their “preferred” platform.”

“Nearly three-quarters of Facebook users have ‘liked’ at least one brand on the platform and more than a third of users have liked six or more.”

What do they want once they’re on Facebook?

You guessed it – coupons.

“nearly two-thirds of consumers in our survey said they want brands to offer them discounts online,” reports AdAge. “In fact, the first reason they gave for friending a brand was ‘I hoped to get discounts.’ Other reasons included consumers following recommendations from friends: ‘I looked up the brand on Facebook and liked it,’ ‘I saw an ad for the brand that suggested I go the fan page,’ and ‘Suggestion from a friend on Facebook.’”

We’ll talk tomorrow about how putting up a Facebook page and offering a ton of coupons might not be the best strategy, however.

Is Facebook effective or not? That is the question of the moment. Robin Davey, head of music and film development at a company called GROWVision, decided to try and determine the real value of a Facebook post:

The Black Keys have 800,000 fans and they get around 800 likes per post, although they did reach 7,000 when they said ‘Lotsa Grammys”.

Justin Bieber has 22,000,000 fans and gets between 25,000 and 50,000 likes per post.

Mumford and Sons have 1,300,000 fans and have recently pulled an impressive 17,000 likes on one post that simply said, “TOUR!!!”

But how impressive exactly is that?

Well the Black Keys, at 800 for the less popular posts, works out significantly below 1% of their fans choosing to like it, and just under 1% for their most popular post. Bieber’s rampant fans achieve similar numbers. Mumford’s impressive number is actually only just above 1%.

Davey’s believes the results call into question Facebook’s value. If a relatively small portion of fans will even ‘like‘ a status update, how many will click on a link, or take some other more meaningful action?

Probably not, he suggests, meaning that Facebook isn’t a “make or break” platform.

On the other hand, it’s not clear that ‘likes‘ are a good proxy for success here. As one commenter notes, “The problem is that engagement can’t always be measured. Just because someone didn’t ‘like’ a post, doesn’t mean that it wasn’t effective“.

I agree… except then what makes Facebook any different from any other one-way broadcasting platform? If you can’t have a high level of engagement and action, should strategies shift from this being a social platform to a bullhorn platform? Do companies even know how to actually engage fans in a real social campaign? Are companies relying on the status update to heavily and not being creative? Or will there always be a minority of people that are the engaged ones?

No doubt about it that Facebook has the potential to be a powerful platform for CPG brands. Where there is community, there is commerce. But brand pages nor even Facebook itself has seemed to figure out how to make the leap.

It seems we report on private label’s increased market share almost every other week. But today is not entirely dreary for national CPG brands – we’ve got both good and bad news.

First, the bad news: “The global market share of private label food products is expected to double, from its current 25% to 50%, by 2025,” according to a new report from the Food and Agri Research division of Rabobank, an international financial services provider.

But the good news: “The report, however, also concludes that top or “A” brands are expected to retain their market shares. It’s the smaller, often local, “B” brands that will face mounting downward pressure on volumes, as retailers stop carrying them in favor of using their shelf space for their own private label brands.”

So even though the innovative and scrappy local brands are getting knocked off, national brands finally get a break.

The race for who can dominate e-commerce just got heated. Last month saw two significant announcements from major retailers Walmart and Walgreens.

First, Walgreens announced the company was in a deal to acquire Drugstore.com. “Our acquisition of drugstore.com today significantly accelerates our online strategy to leverage the best community store network in America by becoming the most convenient choice for health and daily living needs whether customers shop online or in our stores,” said Gregg Wasson, president and CEO of Walgreens, in a press release.

“This acquisition offers a unique opportunity that will provide us immediate access to more than three million savvy, online loyal customers, and will allow us to move even closer to our existing customers through relationships with new vendors and partners, adding approximately 60,000 products to our already strong online offering,” said Mr. Wasson.

Next, Walmart launched a full-scale, national rollout of Pick Up Today. “The service enables customers to purchase items online and receive free same-day pickup at a local Walmart store, providing even more savings and convenience to customers,” reports CGT.

“Wal-Mart is uniquely positioned to combine the power of e-commerce with our national retail footprint to offer a leading, multichannel experience that delivers the best savings and convenience to our customers,” says Steve Nave, senior vice president and general manager of Walmart.com. “We’ve seen strong customer response from initial tests of ‘Pick Up Today,’ and we’re pleased to expand the program to customers nationwide in the coming months.”

Interesting and different strategies for each retailer. It will be edge-of-your-seat material as to who can win the e-commerce game.

“The US Postal Service began a product sampling initiative this week, targeting more than 250,000 consumers in Chicago, Denver and Austin, Texas, as well as about 75,000 opted-in consumers across the country. Brands including Wisk, Starbucks and Nestle are distributing products through the “Sample Showcase” program at launch,” reports Frank Washkuck.

The first round of samples will be placed into the mailstream this week and should reach consumers within the next three weeks, said Dave Lewin, PR representative at the USPS.

Since sampling is  a $4 billion a year business, I can only imagine how this will make it even larger with the assumption of increased ease of getting into the consumer’s mailbox. I only wonder if the USPS will be able to turn around the data on the samples and let you know their success rate and conversion to a purchase.

What benefits or drawbacks do you see on using the USPS for your sampling program?