Display ads have worked reasonably well for CPG brands to reach an online audience. This ad format loosely emulates traditional TV media, showcases products well and offers great contextual placement. But the online media world has been waiting (somewhat impatiently) for CPG brands to funnel a piece of the ad budget to paid search. It took a few extra years to materialize, but I now see three compelling use cases for CPG brands to invest in the paid search ad format:
1. Generic category search - While display ads, word-of-mouth and in-store are the more common ways for consumers to discover new brands, online search presents its advantages. Here is a search for “frozen pizza”that shows Kashi and Totino’s brands at the top of the paid results.
2. Solution-oriented search - I view this as the killer app for CPG search investment because it’s an opportunity to reach new consumers during a very influential time. Consumers have problems, and brands have answers. For example a search for “quick and easy meals”returns paid results from Campbell Soup, Betty Crocker and Pillsbury. Note that the word “soup”, “brownies” or “cake” weren’t part of the search term, yet the paid results point to brands offering real solutions in those categories. The search results could easily point to a special offer or coupon for that brand to help drive more immediate trial and consumption.
3. Brand name search – There are two real use cases for investing in brand name search. The first is to influence a loyalist to consider trying a competitive brand — pretty much what Catalina is doing through their printed POS offers. In this example, a search for “eggo” returns a single paid search result for Pillsbury Toaster Strudels. The other use case for brand name search is to redirect traffic to a special promotion, event or loyalty program. The best example of this is found in Coca Cola’s successful loyalty program, MyCokeRewards. A search for “coke” returns a paid search listing for the MyCokeRewards program front and center.
Last fall, Brandweek ran a story outlining paid search adoption in the CPG industry. The story drew comments from a few friends and business associates in the space. I really like Kevin Doohan’s comments (note that Kevin recently left ConAgra for Red Bull) about search being akin to “the electricity in your house, it should always be on.” Just a few short years ago that view would have been a tougher sell, but the industry has come a long way fast.
Armen,
These are great points. Based on some recent experiences, I would say there is a fourth, complimentary topic that I believe is going to grow into one of the most significant— Consumer Targeting. Behavioral targeting data, as well as syndicators of consumer attribute data like Experian, provide the ability to segment audiences on the web and get to the point where specific users (or users with specific attributes could be targeted). The impact of this is that advertisers can focus their spend to reach highly targeted audiences. For instance, in your example of searching for “quick and easy meals”, I could target search ads for Stove Top Stuffing to working mothers, and ads for Frozen Burritos to college students. It’s a simple example, but I’m sure you get the idea. I have seen this approach used to place applications for credit cards in front of the right, qualified applicants.
Brian
Great point, Brian. Behavioral targeting got a bad rap due to the likes of Claria and others, but the reality is that BT is really an efficient proposition for consumers, brand advertisers and media companies.
I had the chance to see a little of this in some partner discussions I held with Yahoo back in 2005. The basic premise that Yahoo was trying to address in the CPG industry was to prove that consumers who were exposed to media across Yahoo’s vast network drove incremental product purchases in the grocery store. Yahoo partnered with Nielsen to develop a measurement and tracking model, leverarging Nielsen’s registered panel user base. The product was / is called Yahoo Consumer Direct.
Also of note is that segment-level marketing is really taking off with bricks and mortar retailers. Big grocery retailers are now just starting to leverage their vast warehouses of loyalty data to develop more targeted offers for shoppers. Some big retalers like Kroger (in parternship with dunnhumby) are making these segment-level insights available to the manufacturer community, for a fee, with the objective of developing more targeted trade promotion strategies.