A recent Advertising Age article made me sit up and take notice. The article opens in this manner: “What’s the hottest category in digital marketing? Package goods. Yes, you read that right. Staid old supermarket staples, once scoffed at as laggards in digital media, are charging online at an unprecedented pace–and their efforts are being rewarded: Traffic to industry websites in the past year has grown twice as fast as the U.S. internet population.”
What’s that all about, I wondered, so I read the article and thought it well worth sharing. The important points the article made:
1. CPG (Consumer Packaged Goods) companies were slow to get into digital marketing, but they are committing to it more now and making a concerted effort to increase their online traffic.
2. According to data compiled by ComScore, the chief reason for the increased traffic on these sites: targeted banner ads on other heavily visited sites, including Oprah.com and FoodNetwork.com. Doing this generated millions of visits to specific CPG sites.
3. According to ComScore, much of the increase in traffic results from online display. The study cited food companies that are advertising on the home pages of portals like Yahoo.com, for example.
4. Food marketers account for much of the growth among CPG companies. In fact, that top 10 cited by ComScore and seen in the table below, are food marketing sites.
5. Note that some of the fastest growing sites market candy, snacks and soft drinks. Is this the way food manufacturers intend to market to children since so many have agreed to remove or cut back on TV advertising around children’s programming. Children are very Internet oriented and highly impressionable. This may lead to problems with parents.
The trend: manufacturers of personal care and household products are beginning to invest more in digital media and digital advertising, as well. However, the article concludes by noting that CPG giants like P&G and Unilever, while ramping up their digital marketing spends to unprecedented levels, still lag behind the 7.6% average of total advertising spends by marketers among all sectors. P&G’s Internet spending was 2.1% in the first half of the year; and Unilever’s was 5% for the same period. This information courtesy of TNS Media Intelligence.
So what’s the point of all this? I see a few important points that we can glean from this.
* First, even the most staid companies with product offerings in the most basic categories are learning that they need to have more of an online presence.
* Secondly, these companies understand that they have to do more digital advertising to drive traffic to their sites.
* Thirdly, if they build more of an online presence, they (the consumers) will come.
* Lastly, the Internet is increasingly becoming the place consumers turn to for information, and to shop. It’s easy, convenient, fast.
Maybe it’s time for all product companies and service providers to make better use of online media and online advertising to drive traffic to their own sites.
What do you think? Are there companies you know of that do a good job driving traffic to their sites? I’d love to hear from you.
Ted, this isn’t my space, so I might ask an ignorant question, but what are consumers finding “of value” on these CPG sites? Coupons I can see, but what else? Traffic is one thing, how about repeat visits?
My gut reaction to this: Banner ads driving traffic? Investing in a larger web presence? Is this 1997 or 2007? Not trying to be snarky — but seriously — haven’t even the largest companies figured out their web strategy… yet?
Whoops. I meant… 2008!
Paul,
Thanks for a good observation. I’m not sure whether consumers are looking for more food facts in this era of confusing dietary information, and the pros and cons of various ingredients, as well as money-saving coupons. It’s a good question and one that the article didn’t delve into. Maybe some of our Daily Fix readers have insights to share on this topic. Thanks for your question, Paul. It’s an excellent one.
Hi Ann,
I’m not so sure some companies do have an overall web strategy. . .even though, as you point out, it’s 2008 and we’d like to think businesses have a mature approach to utilizing the Internet. After all, it’s been around for some time now. Yet,some companies seemingly continue to think they just need a web presence without considering strategy too much. Witness the number of sites that seem static, unchanging, and unexciting. Look at how many sites are still hard to navigate or unappealing. . .how many still offer limited customer interface. How many are doing a good job driving traffic to their sites?
It takes commitment, work, focus and consistency to drive business in every marketing endeavor, including the use of the Internet, as a potentially powerful tool. Thanks, Ann, for making such a great point. . .I always appreciate your questions and insights.
It’s isn’t difficult to create a simple interactive brochure for any CPG. To take it beyond that with added value could be quite difficult though, depending on the product category. I really don’t think most CPG sites are worth revisiting; it’s not in shoppers’ nature to pay continual attention to a brand. The strategy is to provide the best value to a visitor while they happen to be there. This could include nutritional facts, recipes, tips, links, perhaps a game…???
Thanks for the heads up! I didn’t think that food companies would really be able to eliminate television ads without replacing them somewhere else.
You’re right. This WILL lead to problems with parents.
Mario,
Thanks for your input. I agree with you that for CPG companies, especially food ones, there has to be a reason to visit web sites. Recipes, tips, games are all good ways to entice visitors and repeat visitors. Games are especially attractive to kids. Overall, though, it’s probably best to enable consumers to access updated nutritional information, and to be able to reach the company with questions or concerns they might have. That would offer real value, in my view. Thanks for opining, Mario.
Hi Lisa,
Food companies might begin to slice up their advertising pies a bit differently, but don’t expect them to significantly decrease TV or print advertising. They will make adjustments as they experiment with other media, however.
A few major companies have made a commitment to reduce snack advertising that used to air during kids’ TV programs and on kids’ major TV media outlets due to public pressure, but that’s about it. Parents’ vigilance extends beyond TV advertising to the Internet and that may lead to some push back if these same snack companies become too enticing to kids with online games, special offers, etc.
Thanks for weighing in, Lisa.
I am not surprised by this at all. Many of our customers are selling packaged goods (e.g., gourmet food) online.
We even have a customer who started by selling Artisan Sweets (www.artisansweets.com) successfully and now is expanding into Natural Candy (www.naturalcandystore.com).
I saw them start out from the very beginning and it has been fascinating and exciting to watch them grow. I love it when I see a customer start a business and then have it grow and succeed. That is a good feeling.
Hi Neil,
Just reading your comments, I was wondering whether you could share some things your clients did to drive traffic to their websites and generate interest among consumers. Just curious about any techniques they may have used that were effective. . .
Thanks for commenting, Neil. I appreciate it.
CPG companies focus their marketing strategies, primarily at the brand or category level. You know P& G more for their brands, Tide, Crest, etc than their corporate name. Even Coke focuses at the brand level most of the time even for brand Coke. These companies were the originators of the whole marketing function, branding and brand/product management and have systems that have worked well for 50+ years in most cases. Because of that history, it has been a challenge for the industry to think in terms of horizontal strategies that cut across brand lines and to change their marketing approach. P & G made a specific effort to focus on the web as a medium at the corporate level via a strategic initiative and to test various appraoaches…sort of like testing cable tv back when that was new. the companies are inherently conservative and pretty short term results oriented so it has taken them awhile to really focus on so called new media like the web and to try to use it to their advantage. This is especially true when looking at the web as a replacement for TV or short term promotional efforts….the companies have been pushed that way as much due to the declining impact of traditional methods as because of belief they need to be there. There have been some notable successes but this is an exception vs the rule. We are seeing changes but they are slow. We are seeing more as younger managers are able to effect change and their bosses are still young enough to be open to trying new approaches. Approaches that show volume impact are what is mostly important to many brand managers…ultimately we are evaluated on making tangible numbers of cases of X sell. Thats very different than many other industries where marketing metrics are much more keyed on things like awareness, positive perceptions etc.Brand managers may use the web to deliver a coupon or to reinforce a brands identity. I am a former CPG marketer and that change has been the hardest thing to adjust to since leaving my former industry.
Thank you, W.A., for making great observations based on your own experiences as a former CPG marketer. I quite agree with you that many companies like P&G have had to refocus on their web sites in order to get more marketing benefit from them. While major CPG companies jumped in early with Internet marketing, they found out that it would take time, effort and focus to reorient them in an effective manner. Some companies still lag in this area, and change is slow in coming with others.
It’s interesting to note that you use P&G as an example of a company that excels at brand development, vis-a-vis many marketing channels. They do experiment and test ideas in many areas of their business, and I continue to monitor their efforts. Let’s not forget: this takes commitment and direction from the very top of the company. Many companies could take a page or two from P&G’s playbook to become more successful marketers. Period. Thanks for sharing your thoughts so articulately, W.A. I appreciate it.
Ted, I called my contact at the firm and she said they use email marketing for repeat business and referrals.
For example, they have a nice looking newsletter they send to their customers with a coupon code with which the customer can use to get a discount not available to those not on the list or referred to (forward to a friend feature in email marketing).
To help my friend, I want to post clickable links. She noted that the ones I posted previously were not clickable:
http://www.naturalcandystore.com
and
http://www.artisansweets.com
Ted, I re-read your question, and I now think you mean how did they get started not what do they do now.
Well, they used Google Adwords and Search Engine Optimization. Referrals have been a good source of business.
And, because they have interesting products, they gotten some good publicity. They have been in the WSJ and several of those food and lifestyle magazines that I cannot think of the name of right now. They have a good PR consultant and probably will do more of it in the future so I am interested to see what happens next. The story continues.
Thanks, Neil, for sharing this information with us. After generating traffic to their sites, your clients have grown their businesses for other reasons. As you state, they have “interesting products” and they’ve gotten good PR. Beyond that, I suspect that they’ve probably engaged their customers and they’ve been responsive to them. Generating traffic to web sites is one thing; retaining customer interest and satisfaction is another. It sounds like you’re doing some smart things to help market these entrepreneurs’ companies. Good for you and for your customers. Thanks for writing, Neil.
Well, I cannot take any credit for their progress other than us providing them with email marketing service. They have and are now working very hard to make a family business work. Quite impressive.
A mom and three daughters. One of the daughters (the oldest) is the head of the company.
If all the traffic-driving effort and expense delivers consumers to a site heavy with one-way marketing brand messages, I say the CPG industry is better off sticking to traditional methods.
The brand sites I have seen in the personal care business are nothing more than bulleted features and benefits, tag lines, and competitive claims. No community building or consumer engaging strategies at all. Just brand marketers ‘telling’ the consumer what they want the consumer to know. Very little two-way conversations and virtually no personalization.
To be online in this Web 2.0 world I recommend that CPG companies first figure out what their target audience wants to know.
High traffic numbers don’t reveal the nature of the consumer experience. It means a lot of people responded to an ad, but may have found nothing at the other end worth seeking in the first place.
bThomas,
Thanks for adding very valid points to this conversation. I think a lot of us have been saying that CPG Internet sites are a very mixed bag. Some sites are well done and help augment the brand to consumers, and many unfortunately, don’t. Traditional marketing continues to work and CPG companies should not put all of their expenditures behind digital marketing only. And, as you point out, if they don’t put focus, time and effort behind building web sites to help augment their brands, it’s really not worth doing. Thanks for writing. I appreciate it, bThomas.
bThomas, I assume you are recommending *useful* content rich sites and blogs, etc.?
I’m wondering if any other CPG site is having problems with grocers not accepting their coupons. We offer coupons on our website but are constantly getting emails that grocers won’t accept internet coupons. Thanks for the help!