From Static Shelves to Mobile Marketing1 Sep, 2011 By: Jackie Jones Response
Mobile advertising gives consumer package goods marketers the ability to enhance existing brand values and circumvent the retail middleman when connecting with customers.
Communicating directly with consumers – an advertising tactic those in the direct response world can testify to the importance of firsthand – hasn’t always been the easiest of achievements for the consumer package goods industry. In a world where your product first goes to a third-party seller (who can control shelf display, pricing and outside promotions) before reaching your target customer, it may be more challenging than most things.
This is where DR strategies, converged with increasing smartphone adoption and mobile technology, offers marketers a solution relatively unheard of in this space, according to many in industry experts.
“Consumer package goods marketers find themselves in a unique place, because it’s not just about who the consumers are and what media they utilize, but where they shop. While the relationship between product and consumer in this space is direct, it’s not necessarily a direct-buying relationship – the relationship is also very much with the retailer or store the consumer buys the CPG product in. That’s the difference with this vertical, and it adds to the complexity,” says Curtis Tingle, senior vice president of strategic demand and development at Livonia, Mich.-based Valassis.
With Change Comes Challenge
The consumer package goods space is a tremendously fast growing vertical, with the industry expected to spend $640 million more to advertise online this year than last and to continue to grow spending by 14 percent to 29 percent each year through 2015, according to the most recent data from eMarketer Inc.
With this continued growth comes distinct challenges, according to Tingle, including the need to balance adequate ROI with consumers’ hunger for value, integrating emerging media into existing marketing campaigns and how to properly optimize the path to purchase for customers.
“Consumers are still managing their budgets, they’re still trying to get through day-to-day and find new ways to save, and that continues to be a trend that CPG marketers in particular are trying to keep pace with,” Tingle says. “CPG is struggling to handle higher costs of distributing products while remaining sensitive on how to increase prices to their customers.”
Tingle notes that often CPG marketers may increase prices to the retailers, but those grocery shops or convenience stores might not pass along the price adjustment to customers picking up their favorite box of cereal or laundry detergent, creating a disconnect in ROI and in transparency between consumer and brand. Navigating the threefold relationship between consumer, brand and retailer becomes a new sort of challenge, something familiar to those in the direct response world as “As Seen On TV” products become more and more of in-store staple throughout the industry.
“Online spending will skyrocket then for CPG because it offers one of the first real opportunities for marketers in this space to be reactive and engage one-on-one with their consumers,” Tingle says. “Brands can be much more agile in the marketplace in a real-time environment and make adjustments on the fly through social media and mobile.”
Consumer package goods brands are still testing the waters on how to best utilize and fully integrate new media platforms into their existing advertising strategies, says Tingle. He adds that the expansive reach of digital in targeting a variety of demographics at a variety of times has far-reaching implications for brands looking to build on existing success.
“For years, consumer package goods has had the opportunity to create an image for their brand through traditional media, primarily with television,” he says. “Brands can expand on that through digital integration. Online is a great way to evolve the way you go to market and influence a consumer before, during or after they purchase their products. CPG can now market across an explosive media environment. It’s more complex than ever before, and it’s going to be intricate and challenging for CPG marketers to navigate through.”
Brands Branching Out
Some of the biggest and most familiar names in consumer package goods – including Clorox Co., Kellogg Co., Unilever’s Ben & Jerry’s and Tone Skin Care, a division of Dial – are leading the industry with their latest campaign launches. Though the brand names might not be new to the game, their use of mobile – and their tendency to channel DR strategies to communicate more directly with the customers themselves – is.
“The strength of these campaigns really lies in the ability to enhance all the static media and promotion that is already out there for CPG advertisers,” says Charlie Brignac, executive vice president for consumer package goods at Augme Technologies, which worked on a recent Crunchy Nut promotion for Kellogg. “If you look at the Kellogg promotion, all the classics were still there: They had a coupon on the side panel, a rebate on the inside, and they stayed true to what’s familiar and recognizable about their brand. What the use of mobile did was enhance the value of the campaign and allow the consumer to communicate in real time.”
Kellogg used 2D QR bar codes and SMS text as part of its Crunchy Nut cereal promotion for the “It’s Morning Somewhere” campaign. Whether in-store before purchase, or at home while eating breakfast, consumers could scan a code on the cereal box with their smartphones, which would then direct them to mobile site that featured one of 13 short videos.
“A large part of the campaign came down to Kellogg being able to deliver an immense value statement to consumers while providing a level of entertainment by simply adding a new element to their existing packaging,” Brignac says. “It’s a great example of a CPG brand learning to take a traditional marketing and enhance it with mobile communication to start building a more direct relationship to market to consumers on a one-on-one basis.”
By the end of June, the Kellogg mobile campaign had garnered: 40,000 QR scans; 6,000 text message responses; 38,000 video plays; and 50,000 page views. It was also the first campaign in which a CPG brand used its packaging as part of the initiative so effectively, according to Brignac.
“That’s going to take off in the coming year or so as brands start to recognize the advantage of using their packages,” he says. “With mobile, you’re not violating the clean-store space, and it gives brands the right to now communicate directly with their customers outside of any retail chain’s influence.”
Clorox is another big consumer package goods name using mobile to connect better with its customers and eliminate any barriers in communication that might arise from not being able to sell direct to consumers. The CPG company is planning to launch a mobile app and website as part of its “Ingredients Inside” communication program that gives users immediate access to product ingredient information wherever and whenever they need it.
“The whole point is transparency. At this point, what we’re addressing is consumers’ interest in the products they are brining into their home. We want to demonstrate that products are safe when used correctly and that we stand by them, so that’s why we’re willing to tell people what’ specifically in them,” says Aileen Zerrudo, director of corporate communications at Clorox. “It’s all about earning consumer trust, making sure they know what the products have to offer, and if they want more information, now we’ve given them the ability to do so.”
The Clorox mobile website will allow on-the-go access to the brand’s Ingredients Inside information by offering a plethora of content and functionality optimized for mobile use, while the app – which will first be offered to iPhone users but will expand to other platforms after the initial launch – will enable consumers to scan a product UPC code and be taken to that item’s ingredient listing on their smartphones.
Mobile and digital campaigns provide more advanced ways for CPG brands that may have been limited by static packaging and communication in the past to access consumers wherever they may be, a key factor in driving purchases, Zerrudo says.
“We are pursuing mobile because we recognize it as a growing platform and important to our overall marketing,” she says. “It’s about making sure that we’re aware and pursuing the right digital platforms depending on how our consumers interact.”
As consumer package goods marketers become more familiar with mobile and digital technology, the opportunities they have to expand their advertising campaigns will only grow. New York-based LocalResponse, which aggregates check-ins from multiple location-based services, says it is ready to help CPG brands do just that before they miss out on the trend.
What the company offers to marketers is the ability to take the concept of a check-in and turn it into an impression a brand can target in real time, says Kathy Leake, president and founding partner of LocalResponse. For example, say a consumer checks-in to the local grocery store via Foursquare or Twitter. A CPG marketer whose product is available at that store could send a marketing message or electronic coupon using LocalResponse’s platform to that person at the very point of sale. In that way, mobile is almost unparalleled in the ability it gives CPG advertisers to connect with potential and existing customers.
“More and more consumers have smartphones, and more are broadcasting where they are, so mobile is really creating a special opportunity for brands to create a value exchange with their consumer at that point of decision,” Leake says. “Mobile is unique in that way. A printed coupon is one thing, but if you check-in to Safeway and a brand immediately speaks back to you, that’s a value exchange that’s never been possible before this technology.”
LocalResponse may be onto something. A case study the company ran with a consumer package goods brand focused on consumers who checked-in at major grocery stores and retailers nationwide during the holiday season. Those consumers were then sent a recipe and coupon offer for ingredients from the CPG brand via mobile. More than half of the targeted clickers – 60 percent – redeemed the offer, Leake says.
“When a consumer is broadcasting where they are, there’s a distinct intent to purchase that marketers can and should capitalize on,” Leake says. “With mobile, we’re able to capture that data for them prior to purchase. That’s increasingly important to CPG when store shelves are crowded and brands are competing for consumer attention in such tight quarters. Speaking to someone in real time gives you a great chance of coming out on top.”
Tingle of Valassis agrees that such mobile and digital strategies are increasingly important in helping CPG marketers target and reach consumers effectively. Consumer package goods marketers have been striving for innovation that is driven by relevance, but the challenge remains in best utilizing available data as well, he adds.
“CPG has a world of data and knowledge available to it through consumer relationships and sales. Since the innovation of loyalty and frequent shopper cards, CPG marketers can look to see what consumers are buying and target them more specifically, but the challenge has always been how to maintain scale and efficiency,” Tingle says. “Years ago, you had the data available to pinpoint who you were looking for, but the only way to reach them was after the purchase decision with direct mail. Now, with mobile and social media, you can blend all the data to best understand your consumer and put together an effective marketing program that is more efficient in timing.”
Not only that, mobile allows marketers to be more flexible in their campaigns, so if something isn’t working, it’s easily changed, Brignac notes.
“It’s interesting to know a brand can take advantage of managing the content from the back end. Promotions that were once static and committed to one graphic can now be changed along the way digitally,” he says.
“We now have all the technology in place to do the job right for CPG marketers. We’re going to start to see just how much mobile marketing and shopper marketing will converge,” Brignac adds. “The Zed moment of truth comes as the market begins to recognize how mobile best gives brands the ability to connect with consumers at all key points, starting with the search to while they’re in store to at home while using the product, and beyond.”