Team Position² has put together a wonderful article on social media for the CPG industry. Read more below.
Social Media for the CPG Industry
"The last few years have witnessed manufacturers of Consumer Packaged Goods (CPG) embrace social media with great enthusiasm. When it comes to social media, industry giants like Kraft and P&G have adapted rather impressively, having not just a Twitter or Facebook presence, but also putting immense efforts at being the ‘customer’s brand’. Where there are success stories, there are also instances where many CPG brands continue to face teething troubles with online marketing. The reasons for this could be many; though one of the primary causes could be attempts to fit social media marketing in the company’s traditional marketing strategy. This may not be the wisest approach as social media is a separate, dynamic and growing space, while traditional marketing is a completely different ball game. It is not uncommon to find social media added as an afterthought to a brand’s traditional marketing strategy. According to a new national study from The Shopper Technology Institute, two of three CPG companies said that social media accounts for less than 5% of their marketing budget. These may be worrying statistics; however, the future of the CPG industry in the digital marketing space does look promising.
Let us look at some reasons why CPG brands should give social media marketing its due importance:
- Of the total companies surveyed (The Shopper Technology Institute Study) 76% said that the budget for social media has increased in 2011 compared to the previous year.
- The survey confirms that consumers are willing to connect with brands via social media; although this is mainly influenced by the degree of emotional connection they have with the brand. For manufacturers of consumer packaged goods, this translates into an opportunity waiting to be explored.
- The most commonly used networking channels by CPG brands are Twitter and Facebook. For the 11% that don’t use either one, we recommend they start doing so, considering the fact that Facebook and Twitter are two channels where they are most likely to find their target audiences.
- A joint-study, conducted over a two year period by comScore and dunhumbyUSA, found a median 21% in-store sales increase among shoppers who had been exposed to online ads for CPG brands compared to those who had not seen them. Almost one-quarter of campaigns received a boost of +40%.; a good reason for CPG manufactures to further increase focus on their online promotional strategies.
- According to eMarketer, 2011 is likely to witness 35% increase in online CPG advertising. Although the growth will slow, consumer products are likely to have as much as 10% of the total ad spending by 2015.
P&G’s re-entry into e-commerce via Facebook indicates just how crucial social media is becoming to CPG brands. The company recently added “Shop Now” buttons to the Facebook fan pages for several of its brands including Gillette, Olay and Tide. The global giant is one of the many CPG companies that are exploring the concept ‘e-tailing’ with renewed interest and are talking internet marketing more seriously than ever before. Considering the fact that the modern consumer is willing to make purchases online, the recent upsurge in social media activity by CPG brands isn’t surprising at all."
The article goes on to explain about:
- Overcoming Challenges
- Making Customers feel valued
- Learning by Example: Some Do's and Don'ts
It goes on to conclude the following:
"For the Consumer Packaged Goods industry, social media was a relatively new and unexplored space. However, the entry of brands like Kraft, General Mills and P&G, to name a few, into the online marketing space, has changed that. From creating some memorable YouTube campaigns to setting examples in customer engagement, when it comes to new media, CPG brands are no longer green behind the ears. While the big names in this industry have mastered social media marketing, there are other brands that are rapidly following suit. This is unsurprising, considering the fact that consumers no longer want to queue up at grocery stores and are willing to fill up their shopping carts online. This translates into a great opportunity for CPG brands looking to build a loyal customer base and get those sales charts soaring.
Traditional media will always have its special place for CPG marketers. But relegating social media to a small, insignificant place in a company’s marketing strategy means getting left behind in a very competitive digital environment. With more and more consumers doing their research online before deciding to make a purchase, brands now have the opportunity to entice the smart shopper by featuring detailed product and pricing information.
Online retailing of CPG goods is rapidly growing. Although the challenges for this industry are many, they don’t seem to deter ambitious CPG brands from eyeing a piece of the social media pie."
Read the entire article here.