Brett Goffin from Google spent some time with Bob Houk, Executive Director of Trade Promotion Management Associates (TPMA), discussing how and when the trade promotion discipline will adapt to the digital world. Some very interesting opportunities for sure.
As Bob and Brett discuss, the trade promotion discipline is deeply rooted around driving value for both trading partners — manufacturers gain more prominent placement for their products, while retailers monetize lucrative in-store marketing vehicles. This fair trade has taken place for at least the last century, and even more recently both parties have doubled down their investments to scale shopper marketing initiatives.
But taking this a step further, how do multi-channel retailers monetize available trade dollars in their online storefronts? Will manufacturers realize the same value from a “virtual” end cap as they do for a physical end cap? The industry consensus points to a resounding “yes”, and this model is starting to take shape. Don’t be surprised to see a case study or two on this subject at an upcoming TPMA event.
For a primer on trade promotion marketing, an overview of Bob Houk and the TPMA, and a quick history lesson on the Robinson-Patman Act, check out Part I of the video series.
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 love this idea and thought it was long overdue: set up an intensive job swapping program for CPG brand marketers (like those from P&G) and a new media organization (like Google). Expose one another to a “month in the life” of the other side to build a better appreciation for how to do business with one another. Sounds great on paper.
This is a fantastic first step, but more of this cross-breeding needs to happen in CPG land, as many of the big brand teams (and their old line agencies) are still focused on traditional media. The needle is slowly moving, and behavior differs by brand and category, but there is still a pretty big gap to close. The last research I saw suggests that, on average, CPG budgets allocate just a few percentage points to interactive with the vast majority still funneling toward television and print. Old habits die hard, I guess.
That all said, kudos to Tim Armstrong from Google and his counterparts at P&G for pulling this off.
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:
I love this idea and thought it was long overdue: set up an intensive job swapping program for CPG brand marketers (like those from P&G) and a new media organization (like Google). Expose one another to a “month in the life” of the other side to build a better appreciation for how to do business with one another. Sounds great on paper.
