I’ve always admired Jim Stengel, former Global Marketing Officer from Procter & Gamble. His focus on connecting with consumers is central to just about every message he shares with CPG marketers and agencies. It’s a consistent and powerful statement for sure.
Jim recently gave a great interview with Brandweek and not surprisingly he remains busy consulting, keeping healthy, and working on a new book titled “Packaged Good”. This should be a great read when it hits the press next year.
My first guest blog entry comes to us from Mark Ahrens, VP of Product Management at The Nielsen Company. Mark is a career marketer with a strong CPG industry orientation. He shares a very interesting perspective on the tools CPG brand managers ultimately want (and need) to mine data and develop informed business decisions. Thanks for the entry, Mark!
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Given Amazon’s recent stellar financial performance, few people remember the collective mocking of CEO Jeff Bezos when he proclaimed, during the Internet boom of the 90s, that “Wall Street (read: profits) is largely one huge distraction.” At the time, many thought him to be another naïve webbie who couldn’t, as they say, monetize his business model if it bit him on the you-know-what.
Well, the real genius of Bezos was not that he was able to amass a wonderfully efficient network of distribution centers. His genius wasn’t in the clever deployment of a data mining algorithm-collaborative filtering–into the buying process nor was it in being an early pioneer of shopping cart technology and e-commerce breakthroughs (e.g. One-click Shopping). His real genius was that he assembled all of this technology as a means to an end. Bezos’ end game, so prescient when viewed over a decade later, was to enable a consumer to purchase almost anything they could think of, have it delivered to their house overnight, and do so at a low price point – become the Wal*Mart of ecommerce.
Now, let’s take Google. Millions of people have specified Google as their default when they launch their web browser. Is it because they really like its creative interface? Hardly. Is it because Google has one of the world’s most powerful and sophisticated search engines? Sort of… The real reason people set their web browser to Google is because they know that if they need to find something on the web, launching Google will help them find it very quickly, reliably, and easily. Google accomplishes this simple-sounding task so well that to “Google-it” has become part of our vernacular.
The two examples above share a common thread. Both Amazon and Google solve a first-order need state for users in a way that is faster, simpler, and better than was previously possible. At this point, you might be asking “What do Amazon and Google have to do with the CPG industry?” They serve as reminders that technology, by itself, doesn’t solve the day-to-day tasks of CPG knowledge workers.
No Assistant Brand Manager wakes up in the morning thinking their job is to run the latest report or produce mind-numbing rows and columns of numbers. They don’t wake up thinking how great their BI reporting tool or data warehouse is. Rather, they wake up (or at times, are kept awake) wondering “Where’s the next big product idea?”, “How am I doing versus plan?”, or “How’s my shelf price gapping to Private Label?”
CPG knowledge workers want, literally, to be able to “Google” for high-value, business insights. They don’t want to have to track down arcane DB names, memorize multiple passwords, or master complex navigational paradigms across multiple systems both within and beyond their corporate firewall. Rather, they want systems that “talk to one another”…not exact look and feel, but a shared context when moving from one system to another. They want help in interpreting what caused what to happen and what should they do next. They want the proactive answers to questions they didn’t even enough know to ask.
Solving the needs states above for CPG knowledge workers will certainly involve a broad array of technologies. For instance, intelligent, scaleable DB design, including both physical and federated integration, business-issue data marts, and a robust meta-data management system will certainly play a large part of any such solution. Other technologies such as data visualization, expert systems, embedded data mining, modeling and simulation, and social media-based collaboration will play an important role as well.
However, as we have learned from Amazon and Google, it will not be the brute-force assembly of technological piece parts that separates winners from losers in the CPG vendor marketplace. The winners will have focused its technology laser-like against the highest value tasks of a CPG person’s day-to-day job. The blueprint for winners will include a solution that tells someone What happened?, Why it happened?, and What they should do about it? With the same simple elegance as the search answers they currently receive from Google or the purchase experience of Amazon.
Upon reflection, Bezos’ vision is really only a present-day derivation of Ralph Waldo Emerson’s old adage-build a better mousetrap and the world will beat a path to your door. Those vendors who provide the better mousetraps to the CPG industry’s business problems and provide them in a way that is faster and simpler for users to consume and collaborate will capture the marketplace.
At an industry conference last year I saw a fantastic live keynote presentation on buzz marketing from Steve Knox, CEO of P&G’s Tremor division. Steve’s keynote highlighted the emergence (and critical importance) of word-of-mouth marketing in the CPG sector, and how brand franchises are benefiting from a groundswell of loyal consumers who behave as self-appointed ambassadors.
These “connectors”, as Steve calls them, form the fabric of word-of-mouth and social media in general. These are the folks that tend to be early adopters (but not always), have distributed groups of friends and acquaintances, and just generally like to be heard. The key message that Tremor has for brand marketers is to identify these connectors and nurture real relationships with them. From there, good things will happen. Sounds easy to do, but there is clearly a lot more to it than that.
But once you do identify the right group of connectors, how do you forge meaningful relationships? Bring them into the product development process. Let them have a real say on which line extensions, flavors, colors, varieties and form-factors are on the roadmap. Let them be the first on their blocks (and in their social networks) to try a product pre-launch. Allow them to critique advertising. Communicate with these folks often and early, and they will pay you back many times over.
One of the key take aways that Steve shared with the audience has stuck with me. It was something to the effect of: “Don’t confuse word-of-mouth marketing with the internet. The internet can be an enabler to this discipline, but is not a requirement.” Great advice from someone who is clearly deep in the trenches.
On an interesting side note, it’s important to recognize that Tremor serves not just P&G’s portfolio brands, but also brands from non-competitive CPG organizations. The Tremor business website highlights customers from Hershey’s, Del Monte, Ford, Kellogg’s and more. Good news travels fast.
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.
I’ve become a fan of David Armano, author of the Logic + Emotion blog and VP, Creative / Design Evangelist at Critical Mass. He has an uncanny ability to distill complex thoughts into really simple, informative visuals.
David recently posted a presentation (embedded above) on the social movement of personal brand builders who can influence large spheres of followers. Think Guy Kawasaki and Seth Godin as two prime examples. This introduces some real opportunities in the CPG marketing community, as outspoken individuals who have achieved “micro-celebrity” status online have the power to quickly and efficiently influence a defined market.
Perhaps the strategy for CPG folks is to cultivate relationships with the right micro-celebrities to help proliferate market test opportunities and evangelize new item intros to their vast networks. I’m thinking Phil Lempert can play that role quite well.
A very interesting topic delivered through an easy-to-digest presentation.
CPG Industry News
