Thursday, April 3, 2014

Digital Marketing Comes of Age for CPG Brands

While most industries long ago acknowledged the declining effectiveness of mass media, consumer packaged goods (CPG) was slow to respond.
Credit for CPG being late to the digital game goes to the industry’s business-to-business-to-consumer model of mass media being the only means to communicate with consumers at scale.  The retailer is a manufacturer’s key “customer,” who relies on brands to create demand in their stores.  And today, many brands view digital through a display or mass media lens, one less costly and maybe more effective than television ads and billboards.
Advertising agencies built on media buying drive this behavior, as opposed to focusing digital on one-to-one direct consumer interactions.  The CPG industry continues to experience growth problems despite many years of the marketing mix shifting to digital display, as well as separate investments to develop brand websites, social media presences, email programs, and mobile capabilities.

Conversations, Not Tactics
It’s these other, separate activities that hold the promise of digital marketing’s value. Popular brands have created permission-based email lists containing millions of consumers, and their websites and social media outposts receive hundreds of thousands, if not millions of visitors a month.  Yet for the most part, the marketing campaigns that employ these channels are limited time in nature and an extension of efforts to support immediate demand at the retail level.
While retail execution is critical, fixating on it inhibits the ability to consider how an individual consumer profile could power ongoing conversations that engender the loyalty necessary to support sales across a complicated purchase path that begins outside the store.  I’m talking about looking at tactics such as television ads, coupons, loyalty programs, free standing inserts (FSIs), and in-store promotion as part of this conversation – not the focus of the conversation.
The challenge for any CPG marketer who touches a budget is to understand the value of content and creative at the heart of successful consumer engagement.  Without this insight, it becomes impossible to demonstrate value and secure greater budget for these efforts — which is a necessity with consumers only responsive to the most relevant and empathetic messaging.
Beyond the Store
Google’s ZMOT, or Zero Moment of Truth, has gained mindshare among marketers in all industries.  ZMOT posits that the influence of the store visit and shopping experience no longer holds given consumer purchase decisions shifting to online channels.
Some argue that impulse purchases and in-store promotion still apply, especially within grocery, but ZMOT raises an interesting challenge for shopper marketers.
Consider that consumers buy the same products repeatedly, choose based on price, as well as the explosion of SKUs in all categories in recent years leading to greater competition.  Attempting to increase purchase frequency profitably, or introduce a new product successfully, is unlikely if you limit your outlook to the store.  Influence is most possible where consumers spend their time – which means on their phones, tablets and computers.
Digital Truths
Brand marketers paying for agency creative and content development can demonstrate quantifiably the way these investments support profitable consumer engagement.  It’s important to first gain company-wide acknowledgement of some “truths” with respect to digital marketing:
  • Brand website visitor quantity and frequency is gold – for the sake of volume and profit.  Research shows these consumers spend more than non-visitors, and are drawn to saving money via coupons but will spend more profitably when engaged with valuable content.
  • Website content quality and visitor engagement are essential to extracting that value – maximizing the segment of visitors who buy based on value versus price.
  • The quantity of opted in email and mobile subscribers, and maintaining their agreeable status is a key measure of potential consumer engagement.  Absent these permission-based relationships, content freshness decays when you can’t reach out and connect with consumers in a timely fashion.
  • Consumer engagement with email, web, social media and mobile channels is indicative of brand affinity and customer value.  Research shows consumers who engage through multiple channels are more profitable than ones who don’t.
  • Regardless of online or offline channels, marketing tactics should all be part of an engagement strategy informed by identified consumer data and focused on telling the brand story on an ongoing basis.
  • Gaining agreement on these points can be challenging in a bottom line business laser focused on sales and retail execution.  It’s for that reason better analytics and ways of communicating marketing content value are necessary.
Many to One
The first step is to reconcile what is known about consumers who have opted into relationships with your brands.  Organizing this data consistently not only allows “apples to apples” metric comparisons across different brands and marketing programs, it develops a data asset reflective of all direct consumer relationships to inform higher performing content.
Think about it like this: instead of each brand developing its own concept of a consumer — which is likely redundant with other brands — all brands relate their activities to a single consumer profile.  In this way, brands have access to a living record of consumers far more valuable than if looking at one brand’s activity in isolation.  These individual consumer records would append data such as the following:
  • Demographics/Lifestyle: Age, gender, children, household size, income, and other lifestyle or life stage information.
  • Consumer Actions: Email response, website activity, contact center records, coupon redemption, promotional interaction, mobile behavior, social account participation and content sharing.
  • Permissions: Opt-in for email or SMS, and subscriptions to email lists, web, mobile or print.
  • Retail Connections: Consumers near a store, aggregate number of consumers related to a banner or region, and consumers aligned with the corporate retail entity to support retailer communication and planning.
  • Geography and Location: Consumers within Designated Market Areas (DMAs), city, state, zip code, and distance to events.
  • Engagement History: Consumers or segments chosen for targeting, response data for email, SMS and online interactions.
  • Contact Preferences: Do not contact flags for email, mail, calls, all potentially self-managed via online consumer preference center.
With information organized like this, it becomes possible to relate the monies paying for content to the creation and maintenance of the profiles.  For example:
  • The quality of digital marketing content can be evaluated based on profile data elements collected from digital channels.  Enhancements to the data tied to the timing and placement of the same content employed in mass or display media shows how offline activity supports consumer relationships.
  • Loyalty or brand affinity can be monitored as a function of content interaction frequency measured in digital channels and in terms of time spent viewing, or the act of sharing, content.
Marketers ultimately need a simplified view into content performance in order to share, communicate and maintain support among peer executives — such as the following:
Engagement Scoring: Indicators of each consumer’s affinity for branded content identify opportunities within or across the brand portfolio to encourage email subscription, website registration, social following or referral.
Engagement Effectiveness: A view into the direct response variables associated with marketing programs, such as email opens, clickthroughs, website visits and registrations, and content sharing.  This shows where opportunities for improvement lie and the type of content that really connects.
Brand and Content Affinities: Identifies the branded content most appealing, to use in developing more relevant and higher response messaging.  This helps understand the value of agency creative.
Acquisition Analysis: Shows the ways initial consumer engagement happens and those which hold the promise of maintaining an opted-in relationship.
Re-engaging the Un-engaged: Identify opportunities among consumers engaging less frequently to reignite their participation by examining like-segments for content that leads to high engagement.
Return on Engagement or ROE: When consumers relate to a store location by geography or store preference, it’s possible to create measurable “content cause/sales effect” programs with retail partners.  This can happen directly when introducing a new product by encouraging trial with coupons, limited time offers or promotional contests at a particular store.  Or, it can be inferred, by observing sales activity in a store or region relative to digital response data, and the timing of supporting mass or display media placements.
Digital marketing’s potential to improve CPG company performance is hampered by a mass media mindset.  Without greater emphasis on engaging consumers as individuals with relevant brand stories, marketers will continue suffering the efficiency of digital without the effectiveness.


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