Digital CPG Blog

PricewaterhouseCoopers released a study in June predicting that digital ad spending in the U.S. will top print spending for the first time this year.

But “CPG companies on average spend six percent of their marketing budgets on online media, half of what other companies in other industries are spending,” Douglas Brooks reports.  “Clearly, there is an enormous untapped opportunity for the CPG marketer who gets it right. And that means having a clear, holistic view of your digital marketing spend across your entire organization.”

Brooks urges that marketers start with the following basic questions to get it right:

• Over the short term, what are the goals of the digital campaign and how do they tie with those of the broader advertising and marketing program?
• Over the longer term, how does this campaign contribute to brand goals such as share of shelf, sales and market share uplift?
• What specific consumer actions does the company want to drive—do you want them to visit a Web site, print a coupon, buy online, go to the store?
• How will the team track information disseminated and measure the success of the campaign, both in terms of direct consumer response as well as the effect on offline activity

Brooks later suggests that what’s great about digital is that it allows for – and requires constant experimentation and refinement. Indeed, the area is still so new it is ripe for innovation, particularly by the CPG industry, where consumers are pleading for products and conversations that respond to their modern lifestyles.

Jack Neff at AdAge recently reported that the CMO of Unilever Keith Weed stated the company will increase digital investment significantly:

Mr. Weed acknowledged there’s a risk in “getting ahead of consumers,” as he describes some of Unilever’s efforts. But he likens investments in emerging media to those in upstream product development — a necessary outlay to ensure long-term growth.

Ad Age: You’ve said you’re going to double digital spending this year, which is really very ambitious. Why?

Mr. Weed: At the end of the day we are a mass marketer. Every day, 2 billion people use our products. So what dictates what we do is those consumers, and I want to be where consumers are. The truth of the matter is we’re seeing this huge migration across the world to digital. We need to be ahead of the consumer, so when the consumer arrives, we’re already there.

We’ve talked a lot this week about being where the customer is, and it looks like Unilever understands that well.

SCENTED BANNER NATURA KAIAK from Black Mamba on Vimeo.

There are a lot of initiatives in the social media world, but not a lot of them catch attention like this one. Digital Buzz Blog reports:

Created by TBWA Brazil for a the re-launch of a men’s fragrance, the agency created a scented web banner that was… real.

To make the idea come to life, they sponsored 15 lan houses across Brazil and installed a small scent strip distributor on the back of each screen so when people click the special Kaiak banner, it instantly delivers a real life sample into the hands of the banner clicker!

The results show a massive 17.2% click through rate which is 43x the global average.

Great ROI, not to mention that the above video has been played more than 40,000 times increasing word of mouth for the brand. Not surprising. Wouldn’t you feel compelled to click on a scented web banner?

Method has evolved its “Just Say No to Jugs” campaign for its concentrated Method Laundry Detergent with a video of an attractive couple futzing with a big jug of liquid detergent. Never has laundry detergent been so sexy…

With almost a quarter of a million hits on YouTube, the video states, “It’s a well-known fact that big jugs are bad for your back. Method smartclean technology is smarter, easier, greener… and a whole lot less sticky.”

What do you think? Is this the way to catch people’s attention about laundry? It’s certainly different than most laundry commercials which may be enough for consumers to sit up and take notice.

Via BrandFreak.

“Let’s face it – when large companies enter the digital space, they are not always met with the warmest reception. (Translation: they tend to blunder in, mess it up, and get torn a new one.)”

Such honesty isn’t from the latest in the blogosphere, but GE itself who is crowdsourcing their next digital / social media ad blitz. To succeed, GE isn’t turning to the typical expert, but instead the everyday consumer. Tech Crunch’s Robin Wauters reports:

In the spirit of disruption, GE is bypassing the traditional agency model for marketing campaigns. The company has set up both a basic Google Moderator tool and a dedicated email inbox (ad.ideas@ge.com) in order to solicit ideas from anyone (including industry pros).

Got a great idea for an ad campaign? A creative concept for a killer contest? A truly innovative social media program? With your help, we can avoid the lame and embrace the awesome.

The idea is for people like you, our readers, to submit what you think are the best ideas on how to engage online audiences, being the monster company GE is.

Crowdsourcing advertising is certainly the hottest new trend and while it remains to be seen if such campaigns are really that more effective than traditional campaigns, simply stating that they care about what their customers think will likely prop GE up and above other companies. Not to mention that by engaging consumers in not only creating the content, but voting and deciding on the campaign, they will likely increase consumer loyalty, particularly around influencers.

It’s tough for large companies to admit that they don’t know it all, but it’s impressive that while that may be the case, they also trust you as their customer to be great.

I couldn’t agree more with a new report out from Forrester Research that announces a shift from basic push Internet marketing towards a new era of “adaptive marketing” defined by greater one on one marketing to each individual and the use of real time customer insights (study coverage here). 

Here’s one recent example of the opportunities presented by this new era: Adding a “become a fan” of your brand option to online advertising drives signficiant additional purchase intent.  That according to a new study by allrecipes.com and Psychster, which ranked how users responded to various forms on online advertising. 

Pretty simple concept: Give consumers a reason to interact and form a relationship with your brand (in this case through a “become a fan” option) and they are much more likely to back that up with an actual purchase. 

The full report (here) is worth the read, but Catharine Taylor over at MediaPost highlighted the “become a fan” option as the key part of the study and I agree.  In her words, “Shouldn’t a ‘Become a Fan’ badge on online advertising become as de rigeur as a URL in offline advertising?” 

The exciting takeaway: Injecting a bit of direct response into all of your advertising (whether it is to buy something now, become a fan, or take some other action) is now possible in the digital world.  The best marketers will start to take advantage of these possibilities.

Consumer Packaged Goods marketers have a big challenge:  how do you create engaging content to effectively support your  digital marketing?  The digital consumer isn’t passive; you need to provide them a quality reason to pay attention to you.

Rob Go summarized this challenge nicely in a post yesterday in which he predicted a massive shift in CPG ad $’s to the web:

Auto companies can get a lot of engagement in their ads because people love looking at pretty pictures of cars.  But not a lot of people really want to watch a great online video about paper towels. 

Exactly. 

That’s why I found it so interesting to read in AdAge this week that some big CPG marketers are experimenting with the latest darling of the SXSW crowd—Foursquare.  I haven’t spent a lot of time on Foursquare, but I’ve really enjoyed watching their growth and speculating about all of the advertising opportunities that evolve from their location-based mobile platform. 

The Mayor of Pampers?

The AdAge piece, entitled “Would You Check in to Box of Tampax? For Charity?”, summarizes the efforts to P&G and Kraft to jump into this new location based world.  Using an app from start up CauseWorld, these CPG heavy weights allow consumers to “check into” their actual products on the store shelves (scanning the bar code) to accumulate points that can be donated to charity.

Will this work?  Are consumers willing to engage in this behavior?  If CPG can make this work on a location based mobile platform like Foursquare, getting consumers to engage in more mainstream web formats like Facebook should be a cakewalk.    

My opinion is that this kind of app will have an extremely small appeal, although I’d love to see it succeed. 

Commerce is the Key to Engagement with CPG

I think charitable efforts have a lot of potential for digital CPG advertising, but the mainstream consumer isn’t going to engage with CPG brands online without some tie in to actual commerce. 

Without the opportunity to buy or save money on my paper towels, I’m not going to pay any attention to them in the digital environment.     

Want proof?  Look at some of the data coming out of Facebook, which is clearly taking over the world.  Following a brand on Twitter or Facebook will make you more likely to buy a product from that company, according to a recent study by market research firm Chadwik Martin Bailey (results here and here).  But the study also revealed that the top reason people friend a brand on Facebook was to receive discounts and special promotions. Commerce is king. 

Want more evidence of the important of commerce to digital advertising?  Consider a recent experiment by P&G on Facebook.  P&G ran a special promotion to its Facebook fans last month that allowed fans to buy a new Pampers Cruisers product before the product hit the store shelves.  The promotion was a huge success, selling out the 1,000 packs it allotted for the effort in less than an hour (coverage here).  I think there is amazing potential here.   

I salute the creativity of P&G and Kraft in experimenting with Foursquare, but the real payoff involves tying digital marketing to some form of actual commerce.

 Agree or disagree?  I’d love to hear your thoughts.

We’ve talked before on this blog about the need for CPG brands to shift more of their marketing spend online to “go where the consumer is.”  And even though the industry is forecasting big increases in digital spending this year (see here, for example), digital CPG marketing budgets are still small as a percentage.  I think this is due in part to the challenge of finding good digital opportunities, and in part to the “inertia of advertising budget allocation.”

So just how will CPG brands ramp up digital spending in 2010?  We got a glimpse into P&G’s strategy this week, when venture capitalist David Hornik recounted a meeting in which P&G execs indicated that they are “bullish” on Facebook.  So bullish in fact that “P&G’s explicit goal for 2010 is to assure that each of its brands has a meaningful presence on Facebook.”

It will be very interesting to see what a “meaningful presence” means.  I wonder just how much “engagement” P&G can achieve for CPG goods on Facebook in 2010 and beyond.

At least one P&G exec has expressed skepticism that Facebook users will respond to interruptive commercial messages when “breaking up with their girlfriend.”  Are there enough permission-based marketing opportunities for P&G to leverage on Facebook?  Or will this digital spending simply be viewed by users as more interruptive advertising?  A user comment on the AdAge article covering this news lays out P&G’s challenge nicely “Great. I became a fan of Febreze, but the page *still* smells like advertising.”

It looks like 2010 is shaping up to be a banner year (bad pun, sorry) for digital ad spending by the Consumer Packaged Goods industry. 

According to an Adversiting Age article this week (article here), digital CPG spending has seen a big upswing in the back half of 2009, with at least one agency claiming “a hockey stick of growth in CPG.”  Interestingly, most of this growth isn’t coming in measured media like online display ads.  Instead, the growth is happening in things like social media projects, digital POP, mobile, and eCommerce initiatives. 

And herein lies the huge question for 2010 and beyond: As CPG tries to scale its digital advertising, will the industry find enough high quality places to put those ad dollars? 

In my view, eCommerce will be a lynchpin to these efforts.  If CPG brands use eCommerce as a tool to energize their websites with real consumers, those sites can serve as a centralized collection point for a host of diverse online campaigns.  As always, I’d love to hear your thoughts as well.

The move towards two-way advertising has been much heralded.  The digital world has allowed advertising to become more participatory, and consumers are starting to demand the ability to interact directly with their brands (great study here).

That is why it is so exciting to see the giant $65 billion television advertising market start to give two-way advertising a spin.  The Wall Street Journal had a great article this week (Talking Back to the TV) about how major players in the television advertising industry are enabling interactive features in tv ads.  

Both Unilever and P&G were featured in the article for their early success with the new features.  Unilever’s Axe brand, for example, had more than 3.5 million users spend an average of 5 minutes playing with their interactive advertisement. 

Even more interesting, P&G’s Charmin advertisement married in a direct response component, allowing tv viewers to request a Charmin coupon through the mail.

I find this tie-in to direct response pretty exciting.  Think about the possibilities of a CPG brand being able to capture an actual sale directly through a tv ad. 

The Charmin advertisement featured in the WSJ piece delivered a traditional paper coupon to the user, but this is just the start of the possibilities.  For example, what if the user could link the coupon directly to a store loyalty card?  Or submit an e-mail address and have a digital coupon e-mailed to them for use at the CPG’s own online store (or a shared storefront like Alice.com).  In these advancements, the CPG company not only captures a sale, it is able to assign an ROI directly to the tv advertisement, and gain rich insights into the actual customer segment responding to the ad.  Accountable television advertising may (finally) be coming.     

The lack of a uniform technology platform will certainly slow adoption, but the possibilities are exciting and the development of this new digital, interactive environment will be fun to watch.