Saturday, April 18, 2015

Influencer Marketing and Your Brand

Is YouTube a collection of funny videos, tutorials and children singing in cars? Does Instagram only consist of #ootd pictures, #tbt images and snap shots of mouthwatering meals?  Well, yes, but these platforms have evolved into so much more. Interesting content and open dialogue leads to more followers, more followers lead to more followers and before you know it, a teen with videos about DIY projects and quick hair fixes has more than 8 million followers on YouTube. Is this real life? Yes, yes it is.
Bethany Mota started speaking to the camera about life, her favorite headbands and her picks for makeup and fashion in 2009. Now, she has her own fashion line at Aeropostale, has partnered with JCPenney and Forever 21, has gone on multiple speaking tours, was a competitor on Dancing With the Stars and recently interviewed President Obama in the White House after his State of the Union Address. Her latest “Morning Routine” video recommends brands such as Colgate, Target, Bath & Body Works, Chobani, Trader Joe’s, Tarte, Almay, Hard Candy, American Apparel, H&M and over 9.6 Million views.
Why is this important to your brand?
“According to Nielsen, 84% of consumers say they trust peer recommendations above all other sources of advertising. According to McKinsey and Deloitte, marketing-inspired word-of-mouth generates more than twice the sales of paid advertising, while people referred by local consumers have a 37% higher retention rate.”
Word-of-moth generates more than twice the sales of paid advertising. Well, what if that word-of-mouth had a mega phone, a mega phone that reached over 8 million people with one click of a button. “For example, Activision, a major video game publisher, decided to lean in to YouTube Influencers and gained outstanding results. Influencers’ videos about “Call of Duty” have been viewed 9.7 billion times to date, which is nearly 20 times the number of views for videos on the brand’s own media platforms.” Welcome to the world of Influencer Marketing.
“Influencer” can be defined as Audience Reach (# of followers) x Brand Affinity (expertise and credibility) x Strength of Relationship with Followers. According to Polina Haryacha of TechCrunch, “The most challenging element […] is to correctly identify the talent that best suits your brand and campaign goals.” An influencer that aligns with your brand can leverage existing relationships with consumers that already trust and value the opinion of the influencer.
So, why are influencers so important to brands? Social media has altered the balance of power between consumers and brands. If you don’t believe me, ask Bethany Mota.
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Friday, April 17, 2015

Facing the Challenges and Opportunities of Online Grocery

It has been estimated that in the U.S. 10% of grocery sales will be online by 2025. The reality is online is a growing marketplace. 
But there are challenges and opportunities. Both are inherently tied to the online program’s design and its ability to meet both what shoppers want and what retailers need to make it an effective part of their growth and loyalty strategy.  

A fundamental challenge is the retailer’s operational structure: how do you revamp management and backend systems that span a vast array of business-critical logistics; do you have the same price online and in-store?; how do you manage inventory and the supply chain to minimize out of stocks; how do you manage images and product information; how do you manage the picking/delivery workforce; where do you do the picking (in current stores during slow hours; at “dark” stores or at warehouses?); how do you manage the delivery fleet and plan delivery routes.  These are critical operational decisions that must be well thought through and effectively managed.

This of course requires considerable IT investment. Notwithstanding the user interface, operations must also take into account the ability to fulfill the orders accurately and based on the desired retailer positioning, which may be anchored in a service that is grounded in flexibility (“We deliver within a window that works for you”) or based on speed (“We get it there the fastest.”).  For example, a new service in downtown Toronto, Canada (which has yet to partner with any one retailer) is now piloting a service that promises to have groceries to your doorstep in 3 hours.  

Beyond the IT, supply chain, marketing and CRM integration on the back end, you have to put considerable time and effort into the user experience. Shoppers want an easy to use service that can be accessed by a mobile device, so they can shop on the go, as well as tablet or desktop.  So out of the gate it’s critical you make sure you have platforms for all devices: navigation is also key.  Are specials easily featured?  This is an important consideration for manufacturers when it comes to the allocation of trade dollars.  Will your platform greet you by name?  Will it remember items you have ordered in the past and might be inclined to order again? Designing the service must take into account all facets of the transaction so you can present an environment where the customer feels inclined to shop and add to their basket size – largely driven by experience on what is often a 10 x 7 inch screen or smaller.

Once you’ve taken care of the user experience from end to end, you then need to consider what you need to track on the backend so you can assess the sites’ effectiveness in capturing basket size and building loyalty. What are customers browsing? What made it into the basket vs. what did not?  Is the shopper inclined to come back and how would they rank their experience? Online gives a unique data set in terms of what a consumer considered, whether they clicked past an item or clicked on. You can also get a sense of how you did, and offer perks for the data.

As grocery spend migrates online, there will also be a big uptick in the unstructured social data. Another challenge is having the right filters to be able to discern what social data is of value and what is not. You must also plan for opportunities around engagement such as sharing recipes and products in their circles. Online offers tremendous opportunity for two-way dialogue and learning for an industry that’s historically been driven by push marketing and reliant on spend data, focus groups, and surveys. The challenge will be to resource accordingly so that you are nimble enough to be in a position to capitalize on a highly engaged audience that clearly values time and convenience.

Last but not least, let’s not forget the delivery experience. Were items grouped in a seemingly logical fashion? For example, meat 
with meat, household with household and bread with bread, and eggs in a stand-alone package, seemingly packed with due care. Consumers will have an expectation that you are paying attention to this level of detail and that they can count on you to not only get them what they need with the push of a button, but that it will land at their door packed as though they packed it themselves. The challenge on that front is on the ability to knit online with delivery.

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Thursday, April 16, 2015

Grocery Shoppers Remain Loyal to Favorite Stores: PLMA Study

Consumers in the all-important 25 to 45-year-old age group are increasingly demonstrating loyalty to only two stores they use for household grocery purchases, says a new national study from the Private Label Manufacturers Association (PLMA).
   
The study, entitled “The Rise of Loyal Shoppers,” challenges the conventional wisdom that consumers regularly shop at anywhere from 3 to 5 stores, while chasing after promotions and the lowest prices.

“This latest study indicates that many long-held assumptions – shaped by years of market dominance by the Baby Boom generation – are no longer true,” says Brian Sharoff, President of PLMA. “Buffeted by a severe recession, a revolution in communications, media and advertising, and a retail landscape that bears little resemblance to what existed less than a decade ago, today’s consumer is not the same shopper we used to know.” 

The study focused on 1,059 men and women ages 25-45, a segment which makes up more than one-third of the U.S. adult population. The 81 million Americans in this key age group are critically important to retailers. Their spending on household grocery products is considered to be the highest among all age groups because they are forming families and building careers.
  
According to the study, these consumers shop often, but most do their regular grocery shopping at only two stores. The rate of shopping trips is high: more than eight in ten of consumers ages 25-45 shop at least weekly. But patronizing just two stores for their regular household grocery needs is by far their most popular shopping regimen and it has been increasing as a habit overall during the past decade. This runs counter to the conventional wisdom that consumers are increasingly shopping across a growing number of stores for different products. In a 2006 PLMA study, a third of all consumers said they shop in two stores, but in the new study the figure has risen to 48%.

While they shop around, they are in fact very loyal to their favorite stores. The study refutes another piece of conventional wisdom: the image of the fickle American grocery shopper. Some observers contend that every time a new or revamped retail format debuts, consumers forsake their favorite store and rush to the new shop on the block. The survey casts doubt on that scenario. Rather, it reveals that these younger consumers have been loyal to their favorite stores for years. Six in ten have regularly shopped at their grocery store as well as their mass merchandiser for more than five years. Half have shopped at their drug store for that long.

They are buying store brands more often than shoppers in previous studies. About half of the respondents ages 25-45 buy store brands “always/almost always/frequently” in their supermarkets, drug stores and mass merchandisers. This is a dramatic increase in the top rates of purchase when compared to PLMA studies over the past decade. In 2002, the corresponding figures for all consumers were: 36% in supermarkets, 22% in drug stores and 28% in large discount chains/mass merchandisers. In 1991, the figure in supermarkets was only 12%.
  
Store brands may be the retailer’s best friend, says PLMA. Consumers 25-45, in increasing numbers, are trying store brands for the first time in product categories where they had previously only bought a national brand. Moreover, in overwhelming numbers they report the trial produced a satisfactory experience. In one of the most significant findings in the survey, more than 49% of respondents recently choose a store brand for the first time instead of a favorite national brand in a particular category. When later asked how they compare the store brand with their previous choice of a national brand, 28% reported “very favorably” and another 62% said “favorably.”

A trend widely observed during the recession, such store brand trial is increasing: In the 2009 survey, 35% of all consumers said they engaged in the practice and a year later the figure had grown to 43%; the post- purchase satisfaction rates expressed by consumers were as high in both earlier studies as it is in the new one.

“The baton has passed to a new generation of consumers,” adds PLMA’s Sharoff: “There has been a major shift of purchasing power in the marketplace. After decades of dominance by boomers, a new generation of Americans – those ages 25-45 – has taken over as the heaviest purchasers of consumables. What’s more, they behave differently from other generations when they shop.”

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Wednesday, April 15, 2015

Kellogg’s Offers Tips on Measuring Digital Media Performance

Kevin Sidell, senior manager of digital strategy at The Kellogg Co., believes recent studies that show 24% of consumer product purchases are influenced by digital contact points. He also believes industry experts who say 50% of digital advertising is wasted.

With those statistics in mind, the marketer has actively used digital media for about two years to market its products via Facebook, Twitter, YouTube, Pinterest, Flickr and its Social K website. 

“We don’t grade on a curve with company investments. We want to get impressions,” he said while discussing how Kellogg’s measures digital media strategy and performance in a recent presentation at the Path to Purchase Institute’s Shopper Marketing Summit in Schaumburg, Ill. 

He listed Kellogg’s three guiding principles for its digital creative agency:

  • Keep it simple.
  • Keep the message straightforward.
  • Bring branding in early.

“We know that works for us and lets us get the most out of our creative,” Sidell said.

As an example, he pointed to a near year-long promotion that ended in December on Pinterest and Facebook for Rice Krispies cereal. Consumers were asked to use at least four pins from the "Rice Krispies Treats are easy!" Pinterest board, including Rice Krispies cereal, butter and marshmallows, to create an easy recipe for a Rice Krispies Treat the whole family can prepare. Then they were invited to take a photo of their kids making the recipe, pin it to their board, and link it to Kellogg’s board. Selected entries were posted on Facebook. One of the digital ads promoting the contest was linked to a coupon via Kroger, the country’s largest traditional grocer. 

When setting up the digital marketing mix, Sidell suggested partnering with the insights and planning teams.  Create a learning agenda, and establish a budget, plans and testing partners. After obtaining the data, refine the media plans based on the new knowledge.

Sidell said digital shopper marketing is a collaboration between retailers and manufacturers. Kellogg uses Key Performance Indicators (KPIs) to narrow parameters to hit the right number of people the right number of times with the right retail performance.

His advice for measuring digital ad performance includes:

  • Count “in-views” to make sure ads appear when people are viewing the page. 
  • Monitor frequency on impression-based media. “Repetition can aid recall,” he said. 
  • Watch media plans that have disproportionate numbers at either end. 
  • Look for sites that deliver more impressions to your non-shopper.

Although the industry average is 46% in-view, Kellogg’s considers 70% in-view to be a “great” number. If you can hit 70% frequently, he advised marketers in the audience, sell it as a strong value you are delivering.

A post-program performance review examines flow-through rates, identifies where the impressions were delivered, and measures in-market performance.

Sidell recommended measuring the impact of digital media by working with research partners. Learn how to measure results and apply this to organizational campaigns. Which size ad units performed better? What lift was achieved from exposure to the ad?  

Sales lift studies are the “Holy Grail of digital media,” Sidell said, because they can track buy exposures via pixel. They can reveal what subsequent action was taken by the person who viewed your ad.

Third-party validation of digital media will confirm that the message was delivered as anticipated, he said. Also, web analytics can confirm that an actual person viewed an ad (not non-human traffic) and will indicate how often the ad was viewed.

“The percentage of impressions to your target audience is a precursor to success,” Sidell said. “Enough people have to see your ads at the right time to set you up for success.”

He offered an example of a digital ad campaign that was designed to create 10 million impressions for $70,000, or $7,000 cost per thousand (CPM). He noted that when you remove the 50% of impressions that were out of view (subtract 5 million), remove another 10% that did not hit the right target audience (subtract 1 million), and then remove 5% excess frequency (subtract 500,000), then the effective CPM becomes $20.

For maximum effectiveness in media performance, Sidell suggested these action steps:

  • Consult with agency partners or in-house specialists in media to learn how they perceive media buys and help implement measurement technology.
  • Understand best media practices in the organization, including average costs for media buys and standards for frequency. 
  • Leverage for scale.
  • Communicate standards to partners, providing them with advance notice so they can configure the media buy around KPIs.
  • Monitor and optimize KPIs.
  • Future investments follow performance.

He advised media partners to embrace KPIs and help their clients optimize against them.

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Tuesday, April 14, 2015

Focus on ‘Moments That Matter’ to Influence Shoppers: Study

There is a new call to action in shopping marketing, says a national study. When deploying these programs, CPG companies should seize the “moments that matter” because consumers focus on them. In-home media such as TV and web sites or in-aisle programs like flyers and signage typically create these moments, says Cadent Consulting Group, which surveyed 1,000 manufacturers, retailers and shoppers.

Meanwhile, the study reported that spending on shopper marketing programs since 2012 has increased by $17.2 billion. It more than doubled from 6 percent to 13.5 percent of the total marketing budget of $225 billion, which represents 20.6% of sales.

“We believe, however, that this may be the high water mark as costs begin to outweigh benefits,” said Don Stuart, managing partner of Cadent. 

While shopper marketing has grown in concert with the path-to-purchase construct, the study indicates that the term “path to purchase” is a misnomer. Typically there is only a point or moment along the cycle that stimulates primary awareness and/or influence to buy. The concept of a complete path-to-purchase cycle for an individual product purchase, while intriguing, rarely meshes with reality. 

Also, shopper marketing spending is increasingly going into price, Stuart reported. “It’s not supposed to, as a rule. It’s supposed to go into equity-building activities. There is a lot of trade money going into everyday price management. But some of the money has shifted over from shopper marketing and moved into the more traditional trade budget.”

Here is Cadent’s thinking: In its simplest state, path to purchase incorporates the genesis of demand and the evaluation of options including outlet, navigation of the store and purchase decision. It has served as a useful model for understanding shoppers and guiding marketing investments.

“But too many people are chasing the whole path to purchase. They are checking off all the boxes, literally treating all of them as equal,” said Stuart.

Recent path-to-purchase models have increased in complexity by incorporating a more complete    purchase cycle and multiple feedback loops through digital. According to the study, shoppers are more likely to focus on key moments that matter, which integrates consumers, shoppers and customers

“Our analysis of discrete points of influence during the purchase process indicates a ‘barbell effect,’” says Stuart. Over half of purchase awareness and influence is generated at home before going to the store and approximately 30% is generated in the aisle or section. While there are core differences by category and product, he said the actual moments that matter typically occur at either end of the shopping trip: at home or in the aisle.

Over the past two decades, Cadent contends that individual silos have been created between traditional marketing and sales that have added cost and complexity. These include shopper marketing, shopper insights, category management, trade marketing, sales planning, customer marketing, trade promotion, digital, etc.  However, it is all one marketing dollar that is being spent to influence both awareness and purchase.

Organizing to capitalize on the moments that matter requires a structure with a strong digital head and the consumer/shopper at the heart, according to Cadent officials, who advise manufacturers and retailers to identify, segment, target and organize against these moments to convert shoppers into buyers in their category or store. 

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