Question

Topic: E-Marketing

What Role Does Web Play For Cpg Companies?

Posted by billthomasweb on 8/26/2008 at 9:10 AM ET 500 Points
As traditional marketing methods decline in effectiveness, and where nobody seems interested in building relationships with their toothpaste company, what role does (will) web play for CPG? Social media is great for small B2B and B2C businesses, but what about the companies that make soap and toilet paper, the “Everyday products for everyday people” companies? How should CPG be using web to reach their consumers in this new age of social media? Please offer your best guess.
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  • Posted on 8/26/2008 at 9:24 AM Member
    We work regularly with the largest CPG companies in the world including P&G. There is a very common misconception that no one searches for CPG items online as in your quote: "nobody seems interested in building relationships with their toothpaste company." However, several studies have found this not to the case, and, in fact, people are quite engaged in these purchases using the Internet to find out more and inform their purchase decisions.

    Check out this study done by P&G, ComScore, and Yahoo: https://www.marketingcharts.com/direct/study-search-vital-for-cpg-brand-bui...

    Some findings:

    "Search seems a significant marketing opportunity for CPG brands: The study found that a majority of US consumers visited websites for CPG product categories during the three months ended April 2007.Search drove a significant percentage of visitors in all the examined categories:

    * Food products were the largest search marketing opportunity, with nearly 44 million category site visitors searching.
    * Baby products attracted 15.7 million searchers.
    * Personal care products accounted for 9.8 million searchers.
    * Household products, 1.7 million searchers."

    "The survey revealed that searchers were significantly more involved in obtaining information and demonstrated higher category engagement than non-searchers:

    * 73% of searchers were motivated by product research.
    * 64% were seeking help with the purchase decision.
    * 47% were looking for promotions.
    * Just 29% were specifically looking for the company website.

    Conversely, non-searchers’ top motivation was to obtain information on promotions (59%), to conduct product research (58%) or to obtain help with their purchase decision (44%)."

    Most importantly: "Searchers spent approximately 20% more than non-searchers across the four categories studied"

    What this all tells you is that even for what appear to low-involvement CPG products, there is actually a high degree of engagement as evidenced by all the searching people are doing.

    CPG companies have lead the way in a number of social media initiatives because they've had to. Their ultra-competitive business model has forced them to try new ways to connect with customers. So, CPG brands were the first to try groups on Facebook or MySpace pages or creating brand communities. Several of these communities for companies like P&G have millions of users and go far beyond the individual brands. Check out healthexpressions.com or pgeverydaysolutions.com. You see engaged regular visitors in giant numbers using these sites. They aren't just about toothpaste, but meaningful advice for your life. That's how CPG brands connect with their customers. No one wants a site about their toothpaste, but they do want one about their overall oral health perhaps. Doing this right lets you then sell the brand.

    Its all part of a larger philosophy we have at my company called Marketing with Meaning. Check it out: marketingwithmeaning.com. The idea is that your marketing itself must bring meaning to consumers lives...not just the product, but the marketing and advertising as well.

    JMR
  • Posted by billthomasweb on 8/26/2008 at 9:33 AM Author
    Thank you 'focus fields' for your in-depth insight to my question. I too have experienced increased consumer activity surrounding seeking product information online.

    However, after the initial visit to a brand site, or a quick read of a product review on Amazon, we lose them. Meaning we (CPG) companies can't seem to think of a grand way to follow them all the way through to purchase, (which is our ultimate goal). Unlike retail e-commerce sites that can build lasting relationships and customer profiles, CPG struggles to measure their campaign's ability to drive sales. Beyond search and information, do you have any experience in how CPG of average products can build lasting, loyal relationships with consumers without creating channel conflicts with the retail partners?
  • Posted on 8/26/2008 at 9:40 AM Accepted
    I would also strong disagree with you, billthomasweb. I think there's a larger opportunity for bigger companies in social media; you will have more resources to devote to developing an awesome campaign!

    Look at the success of the salad spritzer campaign (who has celebrities doing voices for an animated web series), or at many company blogs around the web that get huge numbers of comments per day simply because readers like the bloggers. Twitter is starting to become a great way to do giveaways (ie, tweet a question; the first tweeted right answer wins), so if you'd develop some good Twitter content in the meantime (that is, not overt advertising) and do a small giveaway every now and then you should be able to garner a good-sized following.

    Facebook's applications platforms may provide a good opportunity, or at the very least develop an ad campaign there where they have not only the ability for you to target your ads to certain demographics and profile keywords, but also for users to give thumbs-up or thumbs-down to ads (and they have to explain why they gave a thumbs-down), which results in very specific targeting. Building a MySpace page with music or other means of entertainment (games?) could work well, too.

    In short, the ROI a larger company could gain from social media is at least as big as what a smaller business stands to gain. Additionally, note that often B2B business would see far less ROI in social media than B2C.
  • Posted on 8/26/2008 at 10:54 AM Accepted
    billthomasweb, you said: "However, after the initial visit to a brand site, or a quick read of a product review on Amazon, we lose them. Meaning we (CPG) companies can't seem to think of a grand way to follow them all the way through to purchase, (which is our ultimate goal). Unlike retail e-commerce sites that can build lasting relationships and customer profiles, CPG struggles to measure their campaign's ability to drive sales. Beyond search and information, do you have any experience in how CPG of average products can build lasting, loyal relationships with consumers without creating channel conflicts with the retail partners?"

    I disagree with a lot of this. I can assure you that P&G does not "struggle to measure their campaign's ability to drive sales." I can tell you the results to the penny for different marketing channels and initiatives. It does require really solid metrics set up before the program begins and some potentially expensive panel-matching studies to be sure. You might spend $50k on a Nielsen panel-match, but you'll also know if your $1MM program is paying off. There is always a way to measure the effectiveness of a marketing initiative down to the sales level. It just takes a good deal of effort and an investment in solid tracking and analytics.

    Did you check out the URLs of the two P&G sites that I sent you? Those are one way P&G is building lasting relationships without upsetting the retailers. Again, I go back to my Marketing with Meaning soapbox and ask you to look and see if your programs are doing this. It's the only way to form lasting relationships (check out the site https://www.marketingwithmeaning.com to see why, as I don't want to make this too long).

    You need to be driving sales on behalf of the retailers. A quality CRM program will do this and drive people to the stores to complete the transaction. There are a million ways to track this including the most simple being an online coupon for which you track redemption rates.

    Now, if this is true, as you say, "However, after the initial visit to a brand site, or a quick read of a product review on Amazon, we lose them," you might have a different problem. Your site may not be offering anything of enough value to get them to stay or to form a relationship. I'd love to see what your site is and figure out if this might be the case. Happy to give you some free advice here. If you don't want to put out the product and site name over the forum, just look in my profile and send me a quick email.

    JMR
  • Posted by billthomasweb on 8/26/2008 at 4:15 PM Author
    Thank you all for the feedback so far. The company I work for is clearly lacking the investment commitment that some of you have mentioned, especially in the area of metrics. I will check out the examples you have all mentioned. And again, I thank you for your very passionate responses. If you have any additional examples please share them, or at least point the way as to where I should look.
  • Posted on 8/26/2008 at 7:42 PM Accepted
    SFowler above mentions gaming as a way to leverage social media for branding. One company which has been very successful in using this approach is Nabisco:

    https://www.nabiscoworld.com/games/

    Another company using this approach is Stride Gum, although their method is more in tune with addressing the benefits of their brand within a gaming environment. (In addition, they used a unique approach to social media with "Dancing Matt":)

    https://www.stridegum.com/#/home/

    In taking this one step further, some companies set up games involving teams - you invite friends to a team to compete against others. This makes the gaming approach viral and more involving.

    Finally, Red Bull has used an approach that likely addresses one of their target markets - gamers - the ability to fully a develop a game around their brand. Their website also has other ideas featuring ways to leverage their brand (see the "can-art").

    https://www.redbullusa.com/en/ArticlePage.1141362456981-2018501125.2/htmlAr...

    The point is that understanding your target audience and the benefits which they seek in your product can assist you in developing a game or other high-involvment social media technique that can deepen consumer relationships with your brand.


  • Posted by Jay Hamilton-Roth on 8/27/2008 at 8:51 AM Accepted
    I think that once someone has decided on their toothpaste, they have no reason to interact with the toothpaste's company...unless the company gives them a reason.

    What value-added information can you provide to improve my use of the product? New studies? More effective application? Wacky uses of the product for crafts? Is there a new version of the toothpaste coming out, and would you like my input?
  • Posted by billthomasweb on 8/28/2008 at 11:32 AM Author
    Thank you all!
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