In the introduction to this book, we commented: ‘It has become fashionable in some quarters to regard the FMCG category as old hat: yesterday’s manufacturers of humdrum products populating the boring centre aisles of yesterday’s bricks-and-mortar retail outlets’. We went further, and accused a few of the perpetrators of this ridiculous idea face to face: ‘MBA course attendees,’ we observed, showing no compunction at all in identifying the principal culprits and their modish preoccupations, ‘want new and they want exciting: Apple, Facebook, Google. Yet the biggest four companies in this book – Nestlé, Proctor & Gamble, Unilever and Pepsico – each have combined revenues larger than Facebook and Google combined, and by some distance’.
With the benefit of hindsight, which the concluding chapter of any book of hard fact often confers, especially a book so well furnished with the commodity as this one, we didn’t go far enough by a long way. Given the histories of the big eighteen we chose, and the less detailed tales of another six – for sure the tip of the ice-berg – already moving onto the global stage, what perhaps we should have said was something much more definitive: that FMCGs were now as entrenched in the story of humanity as the drive to procreate, as fixed as government, and as bound to evolve into fitter states as life itself. Come to think of it, that last point is probably why we discussed their DNA.
But didn’t some of the giants we’ve just examined come close to failure? Didn’t Coca-cola almost never start at all? Didn’t it almost fall of the edge of the world twice more? Wasn’t Kimberly-Clark on its uppers before the unlikely white knight of menstruation saved its bacon? Didn’t Pepsi go bust on a regular basis? Didn’t ‘the world’s best FMCG’ (Unilever) get almost fatally lost twice? Or possibly three times? Wasn’t Kraft rather finely sliced?
Admittedly, these were threats brought about by relatively sudden and deeply radical shifts in what looked like a status quo built on granite. Or fabulously bad decisions, gross miscalculations or terminal complacency. So are we saying that such things don’t happen anymore? We are not. Because they do. And one of those relatively sudden and deeply radical shifts is happening right now.
But before we examine more closely what is certainly the 21st Century’s watershed, two themes stand out from the welter of entrepreneurial drive, genius, failure, hubris, nerve, stamina and extremely hard work that have gone into the making of our chosen companies. Those two themes are firstly what everybody does and secondly what everybody is looking at. Marketing is what everybody does, and the spends easily reach into the billions, with the spend online permanently on the increase. Bart Becht, Rekitt Benckiser’s no-nonsense supremo until his wholly unexpected and wholly no-nonsense departure, summed it up: you get yourself a product, you get it on the market and then you ‘market the hell out of it’. Which brings us to the second theme: what is everybody looking at? The emerging markets are what everybody is looking at; and it is this combination of marketing and emergence that is driving the watershed.
Why? Let’s look at the mature markets: Europe, America, Canada, and Australasia. Here, even if more and more mistakenly, it is still perfectly possible to pursue consumers through what have become known as the traditional media: the push media. Companies can still take out newspaper ads, put expertly designed and expensively produced bill-boards on busy street corners, run even more expensively produced TV commercials on a variety of national networks and broadcast their cheaper cousins on the radio.
However, how does this mature market approach fare in the emerging markets? Not well, and sometimes not at all. Lake Tanganyika, for example, has no TV, radio, billboards or newspapers. But it’s a wi-fi zone, and its fishermen use their internet-enabled mobiles not only to see who’s paying the best fish prices but whose consumer goods do they want, or need, to spend their fish-money on. In emerging markets – FMCG’s next gigantic honey-pot – marketing is mobile-based and digital, because it has to be: there is effectively no over-arching media infrastructure to exploit. So one way of looking at the shape of the FMCG future is to look at how well the world’s best-known brands are keeping pace with this new, and immensely powerful, sales and marketing technique? How are they responding to the revolution in consumer expectations, interests and behaviour? And is digital marketing not simply the emerging markets’ future, but everyone’s?
One: Coca-Cola
Coca-Cola’s range of innovative sales and brand-awareness campaigns gives the company a leading position in the Modern Marketing landscape
It may not surprise you to learn that one of the world’s most iconic brands is also one of the world’s virtuoso exploiters of Modern Marketing. Coke’s early entry onto the digital landscape and its rapid implementation of best-practice Modern Marketing tactics has resulted in a catalogue of impressive achievements and ROI right across the product range. This case-study will look at three imaginative and highly successful campaigns that show how very effectively Coca-Cola has picked up the digital baton and run with it.
Before we look at specific campaigns, however, it is worth analyzing how and why Coca-Cola has embraced Modern Marketing, in particular one of its absolutely key elements: Social Media.
Coca Cola and the Social Media
Coca-Cola employs 150,000 employees in more than 200 countries, who together help to promote and sell over 500 branded beverages. And one thing it has come to understand very clearly is that not only are its employees talking to each other online every hour of every day, they’re also talking to their friends, who are talking to their friends, who are talking to . . . well, you get the picture. The world’s largest beverage company wants to be a part of that global conversation, to share its values and, of course, to promulgate its own, ‘to inspire moments of optimism and happiness’ as it builds its brand image.
To this end, Coca-Cola has invested heavily in building global communities. To date, its achievements include:
· Some of the largest online communities in the world, ranking in the Top 10 global brands, across all social media platforms and across all industries
· 63 million fans on its main Facebook page, which is focused on maintaining the brand image and raising awareness of its ad campaigns
· Facebook pages for other products, such as Diet Coke and Coke Zero. Such brands have far fewer fans than the Real Thing, but they effectively advance a key supporting strategy: niche platforms for niche products with niche consumers.
· One of the most active brands in the Twittersphere, a main-product Twitter feed with more than 700,000 followers and a 75,000 Tweet history
· The maintenance, like Facebook, of separate Twitter feeds for each of its local markets
The Campaigns
Coca Cola’s understanding of the power of social marketing is impressive. Even more impressive is the apparent ease with which it has been able to integrate that insight into the bigger picture, an integration which has been the key to its success. The Share A Coke campaign is a perfect example, showcasing how an FMCG brand can best use social media – Facebook in this case – to drive consumer engagement and thus achieve a real and clearly attributable improvement in global product sales.
The Share A Coke campaign offers consumers the chance to order personalized Coke cans via a Facebook app. Once people receive their bespoke Coca-Cola product, they are then encouraged to share their enjoyment of their very own Coke product online via the Coke Facebook page. This 2011 campaign increased global sales by a full 7 per cent. It created worldwide attention for Coca-Cola, amassing18 million online media events and fuelling a huge, 870 per cent rise in traffic on the Coca-Cola Facebook page, with page likes increasing by 39 percent.
Now let’s look at a second Coca Cola online success story, the Coca-Cola Happiness Machine. Here, Coca-Cola actually customized its popular vending machines; not only did they dispense the drink, but offered consumers extra treats like free drinks, pizza, sandwiches and even flowers. In Singapore, for example, physically hugging the machine itself would get you a free drink. In Belgium, you had to dance with it. Coca-Cola then videoed people’s reactions and put the footage on their specially branded YouTube channel, amassing millions of views and tons of brand goodwill. This highly imaginative campaign required relatively low investment, yet made brilliant use of the social media at a point-of-sale level to communicate the key brand values of fun and sociability.
A third campaign, this time exploiting Coke’s long-term sponsorship of global sports and music events, centred on the 2012 London Olympics. The campaign, Move to the Beat, is arguably one of the company’s very best, using both music and sport to help the company communicate with its thirsty teenage market. Coke recruited London-based producer Mark Ronson and singer Katie B, then took five Olympic hopefuls, recorded the sounds of their respective sports and combined the results to create a song. The campaign involved five key elements: a feature length documentary, the song itself, TV commercials, Beat TV, and a series of digital/mobile apps called The Global Beat. Move to the Beat was a master class in integration, and it achieved impressive results:
· More than 25 million video views in total across desktop and mobile
· 1,220 subscribers
· It made Coke the Games’ second most talked-about brand
· It prompted 242 million social web responses, 39 million on Facebook and 546,000 on YouTube and Beat TV
· Move To The Beat itself was mentioned 246,000 times on Facebook
Coca-Cola attracted an additional 1.5 million Facebook fans and 21,000 Twitter followers.
The campaign prompted 245 million searches, 461,000 clicks and a CTR of 0.2%.
Share a Coke, The Happiness Machine and Move to the Beat show perfectly how well Coca-Cola understands the power of social media and how well it is able to integrate that understanding into broader campaigns in both digital and traditional worlds, with the digital dimension now an indispensable part of its marketing strategies. The company understands exactly what its values are and with whom it needs to communicate them. Digital analyst John Furrier writing for Forbes.com said: ‘Successful brand marketers like Coca-Cola understand that traditional marketing disciplines must be supplemented with new models rich with content, engagement, conversation, and analytics – the essence of social commerce. As big brands need to create an even better brand experience and empower their marketers with tools that will allow them to do so simply and effectively, more and more companies are turning to social software solutions to provide them the advantage they need to stay ahead of the curve.’
Coca-Cola has shown the world how revolutionary the company can still be, how creative, and how the imaginative deployment of Modern Marketing techniques forges fresh, long-lasting and essentially emotional ties between consumer, company and brand.
Two: Colgate-Palmolive
In the last few years, Colgate has been criticized for its lack of ‘bite’ in responding to the growth of Modern Marketing. This may be about to change.
In 2012 Jack Haber, Colgate’s vice-president for advertising and digital, admitted his company was ‘not where it should be’ given consumer appetite for mobile phone marketing. Speaking at the GroupM What’s Next conference, Haber said: ‘It will take some time to get mobile fully woven into the fabric of the company’s marketing activities.’ The reasons for the omission are common enough: resistance to change both within companies and within the larger advertising and marketing community. Colgate-Palmolive was a typical case in point, still spending 80 percent of its ad budget on TV. But Haber saw the problem: ‘We’re all behind. The industry is not as focused as it should be, especially among the creative ranks. People talk about integration, but it’s still TV first at many ad shops. We need to change that.’
And it’s true that consumers have embraced mobile devices far faster than the FMCG industry anticipated; many brands are still trying to catch up. Colgate, however, has now made the development of a coherent, integrated and global mobile strategy one of its top international marketing priorities.
The company began its marketing makeover with There’s Something in Your Tweet, a pro-active entry into the social media launched via Twitter in 2013. The Canada-based campaign encouraged Tweeters to send Twitter alerts to Colgate’s Twitter account giving details of friends, family or colleagues who had food stuck in their teeth, with Colgate thoughtfully providing a menu – ranging from pop-corn to ‘super-healthy’ kale – to help distinguish precisely what was stuck. This social media-led campaign was designed to raise the consumer profile of Colgate’s Slim Softy/MC toothbrush’s 17x slimmer tips tapered bristles – ideal for removing foodstuffs from teeth – and played on the embarrassment of a social faux pas to do so. Both sender and ‘shamed’ associate were rewarded with a $1-off coupon for – yes - a new Colgate’s Slim SoftTM/MC 17x slimmer food-removing toothbrush.
Colgate has also turned to Facebook . The Smile Facebook campaign, supported by a Facebook mobile app, asked users to upload photographs of themselves smiling. The brand was now learning fast. By creating both a positive sense of community and a sense of fun, it has learned the lesson that positive impressions made on a second social medium lead to positive effects on purchasing decisions.
Much more dramatically, Colgate proved conclusively how big an impact online campaigning can make. In the summer of 2013, the company launched Brushswap, a promotion that encouraged existing consumers to trade their old electric toothbrushes for the new Colgate ProClinical A1500 toothbrush worth £170. A promotional stall first set up at London Waterloo station was swamped; too swamped, in fact: organisers were forced to close it. Colgate promptly moved the campaign online, asking all interested consumers to register at ColgateProClinical.co.uk and from there begin the full promotional journey via the internet: a clear case of the virtual world managing consumer demand, promotional delivery and campaign metrics from the more logistically manageable dimension of the web and thus achieving an outcome that no-one could swamp.
Unlike the agile Coca Cola, Colgate-Palmolive is one FMCG still in the process, if not the early stages, of making its transition from the old style of marketing to the new. But campaigns like Brushswap, and the company’s somewhat tentative move to mobile, are teaching them the hard way that consumers have changed both in how they get their information and how they interact with new products.
Three: Danone
Danone shows how data collected via Modern Marketing can drive people to engage online and buy offline.
Like Colgate-Palmolive, Danone is another brand slow to adopt Modern Marketing techniques but keen to pick up the pace. The French food-products multinational has launched a number of online campaigns to help boost its marketing success and move with the times. One such initiative was a sponsorship deal in early 2012 with the food-related FMCG website Foodie.com, whose tag-line For the Love of Food suited Danone perfectly. The aim was the vertical promotion of Danone’s Activia yogurt brand. But where online or offline display advertising might once have been the natural choice, using the foodie.com website gave the company the ability to tailor much more precisely both its ad content and its on-page placement, thus creating a far more consumer-friendly means of reaching its target audiences.
Modern Marketing ‘ . . . is new for us,’ said Michael Neuwirth, senior director of communications at Danone. ‘We were not really an early adopter in terms of the shift to digital and, in particular, vertical. As the opportunities like Foodie.com shape up with very focused consumer interest areas, we now see a much clearer opportunity than previously.’
Danone have also begun to understand and exploit digital’s ability to gather high-value consumer information. The company was one of a number of FMCG market leaders to use a new data service from Dunnhumby to connect their consumers’ online engagement and in-store shopping habits with their brand. Dunnhumby are able to track the effectiveness of a Modern Marketing campaign by comparing the behaviour of Tesco Clubcard customers who respond to Danone’s online loyalty campaigns and those who do not. By doing so, Dunnhumby can measure the effect of online loyalty campaigns on brand trials, loyalty, sales uplifts and ROI, an information set which allows Danone to improve the relationship between its online and offline activities.What is clear is that Danone, like Colgate Palmolive, is also learning fast, as other recent digital campaigns for Evian, Volvic and Activia yoghurt have successfully demonstrated: the company is moving with the times.
Four: Estée Lauder
How cosmetics giant Estee Lauder leverages social media on a global scale by understanding how consumer word-of-mouth sells products in the beauty sector.
If conversation is king with online communities, then Estee Lauder has surely made the connection: ‘women buy what their friends and family recommend’. And the company that owns Clinique, MAC, Bobbi Brown, Aveda and Estee Lauder proper is justifiably proud to be one of the most digitally forward in its sector, where consumers typically seek quality content and quality information before they commit to buying quality cosmetics. As Estée Lauder’s online president Dennis McEniry confirms: ‘Social plays a huge role. The number one influence on beauty consumers in every market around the world is advice from friends. With social media, not only are they able to get timely brand information directly from brands, but also all of the validation from authorities and friends. In addition to Facebook and Twitter, we also have country-specific networks that are important, local players like Orkut in Brazil and RenRen in China. And because social media allows for two-way communication, it's also valuable for getting great feedback. We can use it find out what consumers like and don't like, how we can get them the latest information, how we can improve our products.’
Whilst the key metrics of success for Estée Lauder are customer engagement and consumer loyalty, the company takes great care to monitor traffic and sales conversions, showing a truly Modern Marketing perspective in developing online business and recognizing then exploiting the current trends that help reach their audience. And once again, one such trend is social media. As McEniry observes, ‘Right now social media are delivering in the top five traffic sources for every one of our brands, and . . . consistently over index in terms of conversions.’
A leading factor in social’s success is that it reaches Estée’s ‘influencers’, whose value to a business reliant on word of mouth recommendation, online or offline, is immense. In McEniry’s words, Estee is constantly looking at ‘what [influencers] do in terms of education and influencing people in their network, how they interact with each other and their overall impact on the business.’
One thing influencers are certainly doing is using their mobile phones. And, whilst most of the FMCG producers are but slowly realizing the power of the medium, this FMCG super-brand is watching this growing trend like no other, as McEniry confirms: ‘The biggest trend we're watching is mobile. For some of our brands in bigger markets like Japan half of our sales are on mobile devices, and generally speaking we're seeing unbelievable growth rates around the world. We're also researching how mobile is affecting real-world retail, [particularly] how consumers are using mobile phones for interacting with and getting product knowledge at the point of sale, both at counters and in salons. We want to know how to make that mobile-enabled experience as good as possible and how to market to consumers in mobile. After all, no one leaves home without their mobile phones anymore.’
Estée Lauder now vies with Coke as one of the best Modern Marketers in the whole FMCG marketplace.
Estée Lauder and China
Whilst the company’s success has been global, perhaps no territory on earth has been a bigger surprise than China. In the 2012 Digital IQ Index on China (released by L2 Think Tank), the luxury beauty brand was ranked as Genius in four key areas: site, digital marketing, social media and mobile. The brand earned its rating by inspired brand specialization, targeting its products specifically at young, affluent Chinese consumers and thus utilizing the key digital platforms the upwardly mobile visit. Additionally, and also crucially, the company implemented highly effective online search strategies across the major Chinese engines. But perhaps most importantly, Estée Lauder saw the worth, the effectiveness and the beauty of Modern Marketing and invested very significantly. In the meantime, China is just one example of a territory where Estée Lauder enjoys digital dominance. The brand’s future looks bright indeed.
Five: Heinz
When asked to name a brand, any brand, 17 percent of the UK public choose Heinz. For a brand that is such a household word, this major FMCG producer had never enjoyed a unified view of all its customers, across all its numerous varieties, until it embraced Modern Marketing. Finally, if belatedly, Heinz created a new website to host a community of loyal but previously dispersed consumers: a good example of how digital can be integrated into existing marketing strategies to bring consumers together.
Heinz Offers was launched in 2013, and the site now sits at the core of the company’s UK Modern Marketing strategy. Heinz Offers asks consumers to provide data on themselves, rewarding their commitment with a quarterly email newsletter containing money-off vouchers and product news. ‘We set out to integrate all consumer touch-points,’ said Peter Ebsworth, marketing manager at Heinz. ‘What excites me is that we can start to build a picture of our consumers across our entire product range, from baby food to soups to frozen meals,’ he adds. ‘If we can identify consumers who are loyal to Heinz in certain areas, but not in others, we can persuade them to buy into other areas of our portfolio.’
Immediately after the site launch, the first money-back coupons were sent out to registered consumers for new the brand variant Top Down Tomato Ketchup. While Heinz was still tracking redemption rates, some two-thirds of email recipients printed off the coupon, indicating at least the intention to use it. The July newsletter also contained hyperlinks to various Heinz sites so that the company could track who had clicked on what. A second newsletter went out in October and included a coupon for 20p off Heinz Microwaveable Soup Cups, another new launch. ‘As a result of the success of the first coupon, we decided to repeat the idea,’ says Ebsworth. ‘It's only a trial at present, but the results look very promising.’
It’s now policy at Heinz to consider the role of digital with every new marketing campaign it launches. Through supporting websites, the company believes every product can be marketed actively online, even when there is no activity offline. And it doesn’t stop within the brand’s own sites. Heinz has forged content partnerships with other relevant high traffic websites, whether or not they feature Heinz products. All that matters is the relevance of the link and the act of communication with Heinz. Ebsworth sums up: ‘Digital is all about turning a monologue into a dialogue.’
Six: Henkel AG
Although e-commerce changed the way people buy books, clothes and electronics, shopping for household items such as detergent still largely takes place offline. Discover how Henkel now uses social media to stimulate sales for its domestic goods.
For the German FMCG maker of such household brands as Dial soap and Purex detergent, the first key realization was not that the internet affected direct product sales positively or negatively, but that it transformed how consumers interacted with their brands. As Henkel chief executive Kasper Rorsted observes: ‘Digital and social media have an enormous impact on how people are viewing fast-moving consumer goods, from the way they are being talked about to the way they are being perceived. Consumers also are giving feedback on what is working and what isn't. You've now got to create a community online in the digital environment that you didn't have before, and that has a big impact on how people actually go shopping. We are very much focused on engaging online with consumers.’
Yes despite the fact that e-commerce is changing the FMCG consumer industry, Henkel have not quite moved their full advertising spend to digital, since consumers in its sector still use traditional media for product information. Rorsted explains: ‘People are spending more time online, but they are continuing to spend, in absolute terms, more time watching television. As digital use has gone up, TV use hasn't really been going down. TV advertising still is the predominant vehicle for advertising. The consumer is still fairly traditional in the way he or she is exposed to most of our products. But if you take some of our youth-oriented styling brands, such as the hair-care got2b, that's largely digital, because that's the only way you can engage with that group.’
However, as more FMCG brands target the younger consumer, the future points definitely to an online approach. Rorsted and Henkel, optimistic but cautious about their own advertising spend, are still moving inexorably in the direction of Modern Marketing. Says Rorsted: ‘Our media spend is growing in digital, but at a slower rate than I would say we thought five years ago. Digital a couple of years ago was a high single-digit percentage of our budget, and now it is low double-digit.’
Seven: Kellogg’s
Another FMCG brand focusing on mobile as part of its Modern Marketing mix is Kellogg’s. The company has launched a number of landmark campaigns.
In 2010, Kellogg’s launched its first-ever mobile virtual store app. Consumers could use their phone to choose Kellogg’s brands - Special K or Crunchy Nut, for example - and then add them to the cart of their favourite retailer for their next online shop, all without leaving the portal. Results were encouraging: Kellogg’s reported 20,000 actively-engaged consumers since the launch, with early figures showing that 3 percent of site visitors had added products to their carts. But sales were not the only bottom-line. Insights on online consumer purchasing behaviour enabled the development of new e-commerce opportunities for all Kellogg’s brands, providing vital information for future campaigns As Kellogg’s digital manager Leanda Falcon said in 2010: ‘The e-commerce activity we’re developing at the moment is about giving our consumers choice in how they interact with us. Online grocery sales are set to double in the next five years and we want to be able to capitalise on this by setting up a framework across all digital channels for our customers now.’
In 2012, Kellogg’s remained true to the strategy, releasing an updated app for its Special K product that allowed users to manage their weight loss personally via mobile and desktop. The app is supported by a website, where personal weight loss accounts can sync with mobile or computer devices, with promotion via social media, print and TV/radio campaigns. Yuvraj Arora, senior director of Special K at Kellogg’s in the US, provides an example of how this works: ‘The Special K brand is asking women to think about their New Year’s resolutions differently. Rather than focusing on numbers on the scales, the Special K brand is challenging women to reshape their thinking by answering, ‘What will I gain when I lose?’ such as confidence, moxie, pride or energy.’
Kellogg’s is another FMCG brand that is responding to the meteoric rise in smart-phone ownership; as a result the FMCG giant is branching into mobile. Add this to cross-platform social media support from such sources as Facebook, Twitter, Google Plus and Pinterest and it is evident that Kellogg’s are among the leaders in the creation of interactive, consumer-convenient campaign planning.
Eight: Kimberly-Clark
The classic consumer goods company is using social media to target its diverse range of audiences and is looking into e-commerce to direct-sell its products.
Kimberly Clark may be over 140 years old, but the company has been by no means 19th Century in recognizing the advantages of digital, nor been shy at investing in a Modern Marketing strategy. The makers of Kleenex, Huggies, Scott and Cottonelle have been involved with online marketing and digital outreach for a number of years, continually evolving the effective use of these channels to reach consumers. Consequently, Kimberly-Clark invests in most areas of digital marketing, understanding that this is where consumers now tend to connect both with peers and their favourite brands. The company favours social media as a core means to communicate, build relationships and drive participation and has shown itself adept at tailoring the right social media platforms to its products and its consumer demographic.
As Jeff Jarret, vice-president of global digital marketing explains: ‘We facilitate conversations between consumers and give them interesting content to share with each other. This is especially true among our baby-care brands like Huggies. We see high engagement from moms. They are very willing to share ideas and help each other. With our other brands, especially the adult brands (Depends, GoodNites), we have different strategies because social in these areas requires a lot more discretion.’
The FMCG producer has also noted the supremacy of video over written content in driving sales. ‘Videos - online video product recommendations - are key for driving commerce sales. We’ve even done some testing on this and found it leads to much stronger conversion rates. Our YouTube channels are really important to us,’ said Jarret. Another strand of the company’s multidimensional approach is the practically omnipresent social media. Jarret says, ‘Social is core to our digital marketing strategy. For many of our brands, it is a cornerstone. We use it as a means to communicate to fans but also as a platform to build relationships and drive participation. We facilitate conversations between consumers and give them interesting content to share with each other. This is especially true among our baby-care brands like Huggies. We see high engagement from moms. They are very willing to share ideas and help each other. With our other brands, especially the adult brands (Depends, GoodNites), we have different strategies because social in these areas requires a lot more discretion. We use Facebook, Twitter, Tumblr and YouTube.’ Once again, the central planks of effective digital marketing mean relevant, shareable content, the initiating and then leading of online conversations and the use of the right technical platforms for the right brand audience.
Kimberley-Clark has also joined the growing group of FMCG companies - GSK, P&G, Kellogg’s and Diageo, for example - who have invested in direct-sell e-commerce websites. The trial launch of the virtual Kleenex Shop in the UK allowed the company not only to sell the full Kleenex range, including products not available elsewhere in the UK, but to gain useful insights into consumer preferences, which went on to inform future product, packaging design, and online and retail strategy as well as marketing. As Adrian Percival, senior manager of ecommerce at Kimberly-Clark UK, confirms: ‘We’re seeing significant growth in the online channel through our retail partners and we’re determined to win in this channel so we need to know what influences their behaviour, that’s the goal of this shop.’
Yet whilst online selling can certainly be a money-spinner for FMCG producers, it may well be even more important for brands to manage their presence in the marketplace and reputation online than to sell products directly. What Kimberly-Clark UK has shown through trialing and testing the marketplace is that they can almost certainly do both.
Nine: Kraft Foods
The FMCG global leader recommends the ingredients needed for effective digital marketing.
Kraft was an early adopter of Modern Marketing tactics and today understands better than most brands just what the parameters of digital are and what it can offer its practitioners. The company believes the focus lies on engagement, user experience and customers’ completion of high-value tasks to measure these processes. Such tasks could be opting into an email newsletter, entering personal information to customize the user experience on the KraftFoods.com website, or interacting with particular parts of the site. ‘If you know what you want [users] to do and you can track it, then you can quantify it and show the value of the interaction,’ said Kathleen Olvany Riordan, VP of global digital marketing strategy at Kraft Foods.
At KraftFoods.com, the strategy is to empower online consumers with information or content relevant to them, such as recipes and nutrition information, as well as demonstrating the values and attributes of Kraft's brands in interactive ways that cannot be achieved offline. Such interaction involves consumers in each brand and encourages them integrate the brands that particularly suit them into their everyday lives. A good example of such a tactic was Kraft’s targeting of ‘millenials’, young adults born between 1979 and 1994. Since many of the millenials had not learned to cook at home, Kraft created the Kraft Cooking School, featuring on-demand video content that explained basic cookery tasks and preparation methods. It proved an ideal way to reach this web-savvy target audience and involve them in the Kraft brand.
To guide it towards achieving the best online consumer experience, Kraft builds into every campaign three ‘marketing imperatives’: Insights, Ideas and Integration. It also makes sure that it co-ordinates the wide variety of multi-media marketing platforms and tools available by optimising its Modern Marketing consumer experience across multiple touch points by the tailored support of its own stable of product websites via Facebook Pages, Twitter, and Tumblr. Kraft has learned to curate the ‘voice’ or message of its content to particular consumer groups’ particular needs.
Yet it’s not only niche products or the youth market that benefit from Modern Marketing. Kraft claims that 80 percent of its new brands benefit from online consumer interaction. But perhaps the key takeaway message is less the actual content than the Modern Marketing strategy. Julie Fleischer, director of Content Strategy & Integration at Kraft Foods sums up the vital issue: ‘We don’t chase every bleeding edge technology, but we do pay close attention to the technologies and platforms our consumers are using and, when the time is right, then we look to introduce our content.’
Knowing where the next effective online ‘space’ is to catch your consumers is a big part of getting it right for the future. But beyond getting the right space for your message, Kraft, like other successful FMCG brands, well understands that it may not be a purchase that online consumers first have in mind but simply an interaction. ‘We're not designing a banner ad, or rich media, or a Web site,’ Riordan says, ‘we're designing consumer experience.’ And in Kraft’s view, it all flows from there.
Ten: Nestle
Looking after your brand reputation is vital in today’s busy marketplace. Nestle show how Modern Marketing helped combat negative PR from web users.
No brand in the world is exempt from damaging online PR. But when the $200 billion food giant Nestle faced a wave of negative online publicity, it fought back with its own ethical customer involvement program: online.
Although many FMCG brands outsource their social media management to third-party agencies, Nestle has set up, at its US nerve centre in California, an internal social media global response centre to deal internally with the problem of negative consumer coverage. This is what Nestle calls the Digital Acceleration team. ‘With 1.5 billion searches on the Internet, food products are in a quite different category from computers and technology products. Especially in this area, people are looking for transparency and integrity,’ says Dr. Alexander Decker, Head of Consumer Relations at Nestlé Germany.
The Digital Acceleration team is responsible for the daily monitoring of, and rapid reaction to, potential PR crises. So, instead of viewing the internet public as a potential threat, the brand views it as the world’s greatest focus group. ‘When there is a high number of comments, it alerts you that you need to engage,’ explains Pete Blackshaw, head of digital marketing and global media at Nestle. ‘This can mean a real-time response from a member of staff or the issue may be escalated.’
In 2010, as a first step, Nestlé began by rewriting its social media engagement principles, developing a code of ethics promoting open, honest engagement and distributing it to all staff. Backing up this ethical stance, the Digital Accelerators team is ready to post positive reactions and an ethical defence of their brands and company whenever the need arises . Such responses might explain why Nestlé has been accused of purchasing social media followers and celebrity endorsements, or paying bloggers for pro-Nestlé posts, charges it strenuously denies. And the results have certainly been highly beneficial, creating a new and positive ethical framework, using data and online insights to guide social media activity in the future and helping to generate successful campaigns.
There is nothing particularly revolutionary at work here. Nestlé’s transformation is simply one further example of how social media have changed the online marketing landscape, providing new pathways for connections between brands and consumers. Nestlé’s catalysts here were confidence, vision and humility: to drive forward innovative new strategies, among them the Digital Acceleration Team, and to learn from past mistakes the company undoubtedly made in protecting its reputation online. Consumer communication and open collaboration are now the way ahead.
Eleven: Pepsico
Even a global giant can target local consumers with current Modern Marketing tactics. Discover how Pepsi Beverages hopped on the newest trend in social: SoLoMo.
SoLoMo, or Social, Local, Mobile is one of the newest trends in social marketing and Pepsico are just one FMCG producer who are embracing it. SoLoMo allowed brand Pepsi to integrate social media with location-based mobile marketing to establish a geo-local reach-out to a key consumer audience, 18-25 year olds. The company used content taken from their Live For Now campaign on Pepsi.com, targeting consumers in specific geographical locations and following through on the company’s firm belief that cyberspace, rather than traditional television, print, radio or billboard advertising, was the best way to achieve its goals.
Local customer data came from platforms like Facebook, where Pepsi has a more than 8 million strong community. George Smith, senior manager for social strategy and execution for Pepsi Beverages, says: ‘With digital, you end up with a lot of extra data, and you end up with a lot more understanding of who your consumer is. By comparison, marketers can't deduce nearly as much about customer behavior through other forms of advertising, such as TV and billboards. Like many companies . . . Pepsi monitors what people say online about its products and sometimes steps in to refer disgruntled consumers to its customer-service team.’
Pepsi is a good role model for anyone interested in using the social media to get demographic information, engagement and brand opinion from an audience. Techniques like newsletter submissions, contest entries and other supporting or relevant promotions automatically amass data invaluable to a marketer, a tech-enabled power shift that has effectively neutralized many traditional forms of outbound, or push, marketing. Today’s savvy consumers want to be listened to and courted, with channels of communication that go directly to the brands. Finding and targeting consumers in their own locations, as Pepsico has, keeps these customers focused on the brand like never before.
Skilfully deployed, Modern Marketing is a win-win for both brands and consumers. Smith recognizes the mutual benefit of this direct consumer interaction: ‘It's nice to be able to have that direct conversation with [consumers], and not have to rely on a specific media channel to push this, or buy TV constantly to push that message.’
Twelve: Procter & Gamble
As many FMCG producers move into the digital space, the two key questions are Where and How Much? What have Proctor and Gamble’s answers been? How much does the FMCG giant spend on digital and is it paying off?
At the end of 2012, Procter & Gamble estimated an allocation to digital of 35% of its massive marketing budget in the US. The company recently cut $10 million from their traditional marketing budget to re-focus on digital and mobile advertising. All this from a FMCG conglomerate which once leaned heavily on TV and magazine advertising in the past, but has now long been behind the broader market in digital.
A variety of estimates by industry analysts put P&G’s current digital spend at somewhere between $1.2 and $4.8 billion, with The Interactive Advertising Bureau estimating a total US digital of $36.6 billion, to which the entire US FMCG industry contributes 7% or $2.5 billion. Plainly, exact amounts remain unclear. But whatever they are, P&G has certainly emerged as an extremely heavyweight digital investor. But the bottom-line is that Modern Marketing is working for P&G. Figures suggest the company is ahead of its competition. Even the conservative estimate of $1.2 billion in digital spending amounts to 3.8% to 5.6% of total US sales, compared to an average 2.8% spent on digital marketing by other manufacturers in the survey. Nor does P&G show any sign of retrenchment in either spend or digital commitment. When questioned on the future of digital marketing, P&G’s Roisin Donnelly was quick to defend her employer’s strategy and its more intangible advantages: ‘Fundamental from a marketing standpoint, though, is the opportunity that digital provides you to truly connect people to your brand. The age of one-way, push-only communications is over as digital gives us the chance to build real, emotional and long-lasting connections with people in the spaces they choose. Our ultimate vision is to be able have 1:1 conversations between our brands and all our consumers, tailored to them and their needs and preferences. We're not there yet, but the pace of developments in digital makes it a real possibility in the future.’
P&G clearly recognizes that consumers are spending more time in digital media. ‘They are getting entertainment, news and views, and doing shopping online.’ Donnelly adds. ‘People have access to information anytime and anywhere they want it, and it's not just what you say about your brands that they can find.’
With consumer access to brand information better today than ever before, and likely to do nothing but grow, the issue of brand trust is at the forefront. However, Donnelly realizes that traditional and Modern Marketing can work together to build that relationship: ‘Brands need to find the right mix of digital and traditional media for their consumers. But not every brand needs to have presence in every media. You need to make choices driven by your consumers. They key is to be present and effective with the right message, at the right time and in the right place-based on where your consumers want and expect you to be.’
Thirteen: Reckitt Benckiser
Find out how the company used an online social media platform only to launch a new consumer product.
As 2012 marketing campaigns went, it surely ranked as bold: offering consumers the chance to buy the Reckitt Benckiser (RB) Cillit Bang All in 1 Dish & Surface Cleaner exclusively via Facebook. The washing up liquid product that comes with an automatic dispenser was made available to RB’s Facebook Fans only and preceded its rollout in shops. Dubbed f-commerce, FMCG brands like Reckitt Benckiser, plus others Heinz and Asos, have been curious to test the marketing and e-commerce potential of the world’s largest social network.
Reckitt Benckiser’s UK marketing director Stefan Gaa was quick to defend his company’s campaign at a time when social commerce had and still has its critics. Gaa said: ‘RB prides itself on trying new stuff and this Facebook activity is another example of the company trying to push boundaries and try things out. In the end a business is about sales so to make it viable, you need to make sales but the beauty of social commerce is you’re putting commerce into people’s homes and bringing products to an environment consumers are already spending a lot of time.’
As our case-studies have already indicated, FMCG companies and consumers already have high levels of online engagement. But many see the next stage as social commerce. This is certainly true of RB, who want to join the likes of Heinz and Asos and encourage customers buy directly through Facebook. For now, however, return on investment is unclear. A study last year by Havas Media Social and Lightspeed Research found that 44% of people remain unconvinced and only 11% have actually bought anything at all.
Nonetheless, Reckitt Benckiser believes that because so many of its customers are spending so much time on social media sites it is important to target marketing energies in the same place. Gaa is optimistic: ‘You never know before you do something how it will turn out. The world doesn’t stand still - no one expected mobile phones or text messages to be the mass communication that they are. Our responsibility is to experiment because often in marketing you don’t know, so you just do something and then the next time around you know a bit more.’
Another Reckitt Benckiser campaign, which may just indicate a company tip towards Modern Marketing, was Lysol Power & Free. The household bleach cleaner was marketed in 2013 via Facebook in the US, predominantly to reach female consumers aged between 24-54 years old, and promoted especially to appeal to ethical shoppers because of the product’s positioning as a kinder alternative over harsher chemicals. The results were impressive. The Facebook campaign achieved 310 million page impressions - three-quarters of which were generated via earned rather than paid media. And although the company did use TV advertising in support, Laurent Faracci, US chief strategy and marketing officer for RB, confirmed both that the Facebook marketing results were similar to those RB typically achieves on TV in a similar time frame, and, given Facebook’s low cost-per-thousand rates and the campaign’s emphasis on earned social media impressions during the campaign, that the investment was almost certainly less.
In many ways, Lysol Power & Free campaign was an ideal online campaign, able to tap into the ecological concerns of the kind of culture-driven customer base that social media sites make it relatively easy to locate and then speak to. The resultant 30 percent boost to brand seems to clinch the argument.
Fourteen: Unilever
Modern Marketing means 1:1 marketing. The results Unilever has seen – and the FMCG industry as a whole - suggest the company is betting digital as the key to brand building.
Digital and mobile are the key components of Unilever’s communications strategy. Jay Altschuler, Unilever’s director of global media innovation, put the point bullishly to attendees at the Internet Advertising Bureau’s annual Engage conference in 2013: ‘For brand marketers, technology has made a 1:1 relationship with customers a reality. The most important value for brands to pursue is trust, because if you don’t have that, then customers won’t let you use their data.’
Unilever trusts its consumers so much that it puts company money where Altschuler’s mouth is, as its Knorr brand launches an online portal to recruit food enthusiasts to act as advocates in a wider £12m marketing push to raise its profile in the UK. The campaign will unashamedly promote both the quality and taste of its products, as well as continuing to highlight convenience as a key selling point. The move aims to tap into the popularity of TV cookery shows such as Masterchef and Come Dine With Me.
The launch entails the effective creation of an online community to spearhead the charge and introduce new shoppers to the full Knorr product range. The portal will further serve as a hub for the brand’s digital activity, providing an opportunity for consumers to interact with the brand’s 230-strong team of Knorr Chefs who are responsible for making every single Knorr product. Visitors will be able to share recipes both from the experts and the celebrity chef Marco Pierre White as well as using a Buy It Now feature to purchase products such as stock cubes and gravy pots. Alongside print advertising, sampling and PR supporting the hub, the company will use Facebook to recruit fans for the brand’s Kitchen Academy, which will offers members’ recipes tailored to their preferences. A TV campaign will launch later this year to extend the push.
Earlier in 2013 Unilever launched its own social network with the aim of increasing trust and fostering collaboration between its in-house international marketing staff and external agencies. The move allowed marketers to share campaign knowledge and best-practice insight using Salesforce’s Chatter technology. With the launch imminent, Marc Mathieu, Unilever’s senior vice president of marketing gave details: ‘The platform provides our team with the tools they need to develop and build our brands in local markets. It also frees up time for our team to create more magic - that is, to engage with consumers and create more effective marketing, which will be key to delivering our ambition to double the size of our business.’
So, if brand trust is the key universal that Unilever believe lies at the heart of Modern Marketing, the future of marketing is changing for all FMCG producers, with versatility also illuminating the way forward in the Unilever scheme of things. As Unilever’s Paul Polman concludes: ‘We are looking at more dynamic ways of involving the consumer and, no doubt, social networks are part of that. However, I don't think you want to make big statements. Otherwise, all of a sudden, everything is about Facebook. . . . TV [still] has a role to play and it will for a long time, but you first need to really talk about the brand, what it stands for and the message.’
Managing the Digital Marketplace
At the beginning of this chapter, we asked whether Modern Marketing was simply the emerging markets’ future or everyone’s. The answer must now be clear: everyone’s. This heralds another interesting change. When the marketing media were traditional – the so-called push media – managing them was a simple matter: you had some agency think of fancy ideas, you booked the space or the slot, chose when and where it would be seen and heard. If your product could be written about, you had some journalist plug it. If it just looked good, you got a friendly film director to leave a pack of it in Sean Connery’s Aston or Brigitte Bardot’s bath (vary car, bath, actor as appropriate. Or product, or course: where was Lurpak in Last Tango in Paris?). This was simple stuff: you could make a list of it all. You knew where it was, and what it was, and what it said, and what you hoped it would do. But digital is different. Out there in digital there is a tsunami of information that is growing larger every second. We genuinely are at a threshold moment; over the next few years, the world and everyone in it will be digital and be connected. To the companies we have highlighted in this book, this will throw out both massive challenges and massive opportunities.
But this is not merely because digital is a new medium. It is not simply a case of local radio taking over from local papers in late 50s America, or TV taking over from them both. We have just pointed out the essential controllability, and in a sense predictability, of the traditional media: the simple stuff you could jot down in a cheap notebook. The digital media are both far more subtle, but far more powerful, than anything that has gone before. It’s as if you’d put a couple of billboards in a town, and the billboards had suddenly started talking to each other, and then one or two more billboards joined in, some of which, as prominently displayed at the first two you’d commissioned, violently disagreed: rogue billboards, bigger than your own. Suddenly your company has a billboard footprint that can walk anywhere it wants to, and leave its grubby footprints all over that pristine brand image you’ve been striving for. That’s digital. And a campaign on digital works in exactly the same way, but on a scale of billions and billions of conversations about you and your product. That is neither essential controllability nor in any sense predictability, but a digital footprint– and almost everyone has a DF these days - that can be a law unto itself. It’s not a couple of actors with the ad agency’s lines to read, it’s a gigantic auditorium of interested parties with an axe to grind, all talking at once, and without a script. And your Facebook page – you chose Facebook instead of the billboards – set the whole thing going.
The Threshold Moment
Near-saturated mature markets groaning with infrastructure are going digital as fast as a technology that operates at light speed can allow. Very much bigger and very much hungrier markets – the emerging markets – are probably going even faster. And because they are infrastructure-light, there is, for example, no nostalgia for the printed word that slows them down. Digital is in a sense what mature markets must learn to understand: its powers of communication, its social influence, its links to everywhere and everyone and the fact that it fits in your pocket, whereas it’s a reality that emerging markets – everybody’s target – takes absolutely for granted. The consumers of the emerging markets – every operator’s brightest future – grew up with digital – every future consumer’s link to the markets, the market-places and the products. Remember, current growth rates predict that by 2020 – six short years away as we go to press - China will the world’s number one, India number three and Russia number six by PPP. In marketing terms, the consumer has become an individual. Unhappy consumers now have the opportunity via viral interaction to damage brands and thus companies. But such bad news has an equal and opposite potential for good news: benefits, new products, new trends, new fashions, consumer approval and consumer brand enthusiasm, all will travel faster and grow faster than ever.
The Future
There is nothing so foolish or (future) scorn-provoking an activity as predicting the future. Nonetheless, we’re going to try. We predict:
· That global FMCG companies are here to stay
· That their relative positions in the world league tables will reflect to a very large extent their relationships between the digital world and their continued success in the world’s emerging markets
· That seven of the world’s top twenty consumer goods manufactures are already retailers, who themselves are looking to develop prime relationships with the consumer
· That these league tables will change substantially – not quite beyond recognition – in the years to come as companies from emerging markets begin to make their presences felt: by huge acquisitions, for example
· That the takeover and major acquisition process will continue, because size improves not only buying power but also strength of negotiation with the retail trade
· And, finally, that the biggest and the best, using principally new digital technology, will be the personal marketers par excellence
And now, since we have to end the book somewhere, this seems as good a place as any, although, as endings go, it is not really final. This book’s website will be updated at least twice a year, with all the latest figures and the latest, most relevant changes. We will almost certainly be adding new in-depth analyses of more companies. And later this year we will be publishing E-Retail. But that is another story.
To be continued, then.
Greg Thain and John Bradley