According to MEI Trade Insight, 87% of CPG brand marketers intend to increase or maintain their spend on trade activities in the year ahead. This stems from a belief that, in these recessionary times, moving more money closer to the shopper is a better way to get more bang for the buck. We have no argument with the “closer-to-the-shopper” philosophy. But in order to make this approach actually work, you have to know what closer to the shopper actually means —and “in the store” ain’t necessarily the whole story.
Tag Archives: consumer packaged goods
Archives for Tag: consumer packaged goods
It’s often been said that innovation is the lifeblood of any CPG manufacturer. Without a deep pipeline of new product SKUs, it can be hard to garner the excitement of retailers and consumers and fight off the inevitable encroachment of private label.
But regularly rolling out new product forms and flavors can be costly and a risk that most brands don’t have the stomach for.
I’ve recently noticed a few brands have been able to innovate, without changing their product at all.
In an eMarketer interview late last fall, Pete Blackshaw, Global Head of Digital Marketing & Social Media for Nestle, had a quote that I latched onto. He said, “Social media is less of a stand-alone appetizer than a basic food ingredient for all marketing.” I think the food analogy coming from a forward-looking head of digital marketing at one of the world’s largest food manufacturers is more than a play on words. It is extremely sound advice delivered in a clever, succinct sound bite.
We have a similar philosophy permeating our agency: “Technology is not an idea… but ideas can no longer survive without technology.”
The first reaction when asked to write a blog post for the Production function at The Smith Brothers Agency was one of mild reluctance. I mean, who would really give a hoot about our agency’s internal process? But then it occurred to me how I myself read project management blogs in my Google Reader every morning, trying to glean a modicum of affirmation or wisdom or maybe just to enjoy a little wise humor (read: The Tao of Project Management and you’ll see what I mean). Suddenly I realized it actually might be quite helpful for folks working in the CPG space to see how we go about creating what we here at SBA call “a culture of flawless execution.”
As an agency focused on CPG marketing, we’re growing more troubled by retailers’ aggressive private label marketing efforts. Retailers are doing it well. And it’s working. Most alarming, though, is that CPG brands seem to be bankrolling retailers’ private label marketing with the investments in trade and shopper marketing that they are obligated to devote to their retail partners. How do CPG marketers change direction and regain control?
Background
CPG marketers know that retailers have realized tremendous success in developing private label brands and that it is a real threat. Among the facts illustrating private label success, Mintel reports:
- Since 2008, the number of premium-positioned private label product introductions has outpaced new premium-positioned products introduced by brand marketers.
- Seven of ten shoppers say they perceive the store-brand food products they buy to be the same or better quality than name brands.
- Over half of shoppers say they will shop a specific retailer because it has good store brands.
What CPG marketers may not wish to acknowledge is the hostile nature of many private label marketing campaigns and their own role in funding them.
I recently went to Ad:Tech NYC with a fresh stat in my head. According to TNS The Digital Life, 60% of people do not want to engage with brands via social media. As my colleague @peteschnupp states so eloquently, “Yikes!” Pretty scary stuff for a guy who makes his living in digital marketing! As I sat there in our Ad:Tech sessions listening to the different speakers on social media, it hit me – brands and marketers become obsessed with “the Like.”
Recently, one of our CPG clients asked us straight up why they should continue to do digital banner advertising. This was not an unexpected question given an almost universal client frustration with the medium due to low click-through rates. But click-through rates are hardly the sole measure by which brand managers should judge their digital display campaigns. Below are five reasons why CPG marketers should maintain – if not increase – their digital display advertising efforts.
Coming to the end of summer, I can’t help take notice of Google’s push to influence what shopper marketing professionals call the “path-to-purchase”. The path-to-purchase is the route that shoppers take from discovery of a product to the actual purchase of a product. This may include several steps such as consulting research or product reviews on the internet, discussing products with friends, being exposed to media advertising, traveling to a store, and examining the product on shelf or display before buying. Google recently published and is heavily promoting an eBook titled Zero Moment of Truth that boldly marks their proprietary spot on the path-to-purchase.
Earlier this year, I made note of an interesting statistic from one of Simon Dimenco’s Trendrr Chart of the Week Ad Age articles that tackles the latest talk on TV and its future:
Netflix comprises 20% of download traffic during peak times in North America, as Slate technology columnist Farhad Manjoo reported in November, citing data from network management company Sandvine. “That’s an amazing share — it beats that of YouTube, iTunes, Hulu, and, perhaps most tellingly, the peer-to-peer file-sharing protocol BitTorrent, which accounts for a mere 8 percent of bandwidth during peak hours,” Manjoo wrote.
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