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Test & Learn
Packaged-goods brands must change their culture to capitalize on digital.

Much to the contrary of current belief, there is little connection between shopper influence and “liking” a brand on Facebook. Even when you entice with a coupon, or throw in a branded, exclusive piece of swag to “buy” a like, the consumer experience pretty much stops there. Frankly, it’s unknown whether any of the tactics like Foursquare, Pinterest or QR codes are really moving your business.

If that’s the case, why invest in them without understanding if and how they will enhance purchase behavior? Culturally, packaged-goods brands need to change how they approach digital marketing. Facebook is not a magic bullet for all of your marketing experiences; it’s tougher than that. Chasing a new digital tool just because a competitor is using it doesn’t work either — not without insights, analysis and an understanding of how that tool is used by shoppers.

To fully embrace digital marketing, packaged-goods marketers need to change their organization’s culture to one of test and learn. Secondly, they must position digital tools to be a solution to a program and let the metrics guide them to those marketing approaches that have earned the right to scale up for success.

A Culture Clash

Currently, if you look at digital marketing, it’s most successful in “closed loop” direct-marketing industries — those that are transaction-based and offer transparency and connectedness between marketing and purchase. What’s behind that success? It’s their inherent culture of test and learn.

Packaged-goods companies, on the other hand, aren’t organized around a philosophy of test and learn, and rarely get excited about it. Instead, be it because of time, staff, or money, they tend to employ a simpler philosophy: “Go big or go home” or “fewer, bigger, better.”

Herein lies the big problem with that philosophy in the digital world. Many other sectors, like e-commerce, are growing at a breakneck clip because they have the necessary mentality of test and learn. They’re quickly cycling through failures. I had an old boss say to me once, “If you’re going to fail, fail fast and fail cheap.”

Ten years ago, when I was helping to redesign and grow kraftfoods.com, we employed a lot of test and learn efforts. For example, we set a goal to drive significant levels of traffic to the site — to become one of the top two food sites — not just among packaged-goods manufacturers, but in the entire space. To do so, we started by giving away a Ford Explorer every month. Yes, this attracted attention, but we learned pretty quickly that consumers didn’t come back, except maybe the next month to try to win again.

We then shifted our media strategy to use compelling food visuals and relevant content around food to drive traffic. We attracted similar numbers of consumers as the Ford Explorer giveaway but found that those consumers would stick around and return to the site — they were the qualified traffic we were looking for to fuel our growth.

We then graduated to identifying the return-on-investment for kraftfoods.com and were one of the first companies to link high-value tasks, such as downloading a recipe or coupon, to Nielsen purchase data. In so doing, we learned that we were delivering a compelling return-on-investment. I give that example because today it seems packaged-goods marketers aren’t thinking about driving purchase as much as they’re thinking, “How can I use digital to influence attitudes?”

Take the idea of offering free swag for “liking” your brand on Facebook — that’s pretty much the Ford Explorer model and that’s not going cut it. If you think about it, in the digital world, almost anything can be measured. But you have to plan for it, whether that means knowing that you intend to link to frequent-shopper card data or connect with the Nielsen purchase panel. This can help give you an understanding of whether or not you moved the needle from a purchase standpoint.

From the beginning, digital and how it relates to marketing has been very much a lean-forward, transactional medium. Consumers would use the internet to search and receive product information. They would click on ads of interest or play games on a brand site — these are all instant, emotional transactions.

However, this isn’t necessarily how packaged-goods marketers are organized. Despite all of the talk in the media, most are still organized around the television ad, and the bulk of market research dollars available goes towards proving (or disproving) the influence the ad is having (or could have) on purchase.

This organizing approach has created another cultural roadblock — marketing-mix models. These models are getting in the way of properly measuring how today’s marketing is being executed. These models are based on scanner data that’s organized at the market level — Tampa, Chicago, Los Angeles, for example. It doesn’t organize around the specific groups of consumers towards which digital marketing, relationship marketing, social marketing, and even shopper marketing direct their efforts.

Essentially, with a marketing-mix model, it’s not very clear what’s under the hood. Marketers are putting blind faith in them because they serve as one-stop shops — a false return on all marketing efforts. Digital is executed differently and you have to measure how you execute. In the ’90s, brands ran a lot of controlled-store tests. Marketers compared control stores with matched test stores to understand the very specific roles the marketing approaches played in each. You can’t do that with a marketing-mix model.

Painting with Pixels

The other key to success in digital marketing is using it in the right way — like solving a shopper need. For example, we recently worked with Valspar to help improve how consumers chose paint for their home. Currently, shoppers get little more than a paper swatch to take home, or a sample jar. Valspar started with the insight that choosing a room color is a big decision, that consumers feel overwhelmed and afraid they will make the wrong decision.

Digital efforts emerged as a viable solution to this consumer challenge. Valspar developed an app for Apple’s latest iPad and iPhone that lets the shoppers schedule a live video consultation with a Valspar Color Consultant. Using the device’s front- and rear-facing cameras, consumers get an interior designer in the home for a 30-minute live video chat. Consumers can share their project by holding up color swatches or samples on camera. The consultant can then immediately place recommended colors on the consumer’s iPad in real-time that are personalized to the shopper’s specific room and design style.

This app solves the consumer intimidation factor, and Valspar used digital in the right way. Sure, the brand could have easily directed shoppers to the website, saving money in the process, but that wouldn’t have solved a shopper need and it wouldn’t be as effective at driving shoppers to buy the paint. Consultants recommend colors and shoppers go to the stores — namely Lowe’s — to purchase all of their supplies.

It’s just one example, but it shows how a brand achieved success using digital by focusing it on a shopper need and around a purchase-based task. From there, Valspar can look at metrics around this app and link it to real retail data. They can design the right measurement plan to actually measure their return-on-investment.

Consumer packaged-goods organizations need to look at digital closely and use the medium in the way it’s intended. It’s test, learn, optimize and scale. It’s not “guess, go big” and then try to understand
to no avail.

With that mentality, you’ll only “go home.”


seth diamond

SETH DIAMOND is executive vice-president of insights for Catapult Action-Biased Marketing. Previously, he was a senior director of consumer insights and strategy at Kraft Foods. He can be reached at sdiamond@catapultmarketing.com


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