Category Archives: Marketing Strategy

Digital Transformation: What it Is and Why It’s So Important to Marketers

Leah Kinthaert Interviewed for CMS Connect

Hot on the heels of Harvard Business Review trying to answer the question as to why B2B marketers say they’re even less effective at content marketing than they were in 2014, industry analyst and founder of Digital Clarity Scott Liewehr and marketing director Tyler Pyburn – hosts of the CMS Connected show – sat down with me to share ideas about the current state of digital transformation, specifically marketing’s role.

Without undergoing a digital transformation, you simply won’t make it

Daniel Newman wrote for Forbes late last year: “Your business may hang on to a core group of customers for a while, but without undergoing a digital transformation, you simply won’t make it.”

My take is that companies need to transform two major ways – looking outward in how they seek out technologies to utilize to be more productive  – and inward how they adapt to the usage of technology – whether it’s their employees or their customers using that technology. Suddenly we have these amazing technologies that can save millions of dollars for large companies. I’ll give the example of say, a construction worker.  Labor is 40% of construction costs and 29% of a worker’s day is spent idle waiting for permits. You get a mobile app you save the costs of about one day a week for every employee. It’s amazing people are still using paper.

In the case of say marketing it’s looking inward. Our customers are using technology in new ways all the time, and many of us are still marketing like it’s 2005. So we’re losing opportunities and our customers.

The third stage of embracing digital technologies

Some say what’s going on right now it actually a third stage of embracing digital technologies. The first two were: digital competence and digital literacy. Digital is not new, we’ve been using email and websites since the 1990s and 2000s. However, the key here is that now digital is a two-way conversation. With social media the consumer now demands to be part of the conversation. Most of us are still doing “old school” marketing, just using digital means. We’re sending emails and Tweets out, we’re showing consumers ads, just like we used to send brochures and buy newspaper ads. But digital transformation, this is a whole new ball game. It requires new ways of thinking and doing marketing, rather than simply enhancing and supporting the traditional methods.

1% of millennials trust the products in ads. They see them as not authentic. That’s why everywhere you go you hear about content marketing. You have content, and you have marketing. But when you put those two words together it transforms the meaning of both words. Content actually needs to be relevant to your customers (that’s where the marketing strategy comes in), and marketing actually becomes less about marketing and more about providing valuable information for your audience so they can do their jobs and make the right purchasing decisions, whether it’s your product, or someone else’s. It’s also about providing places they can get together and learn from their colleagues. We need to curate and nurture conversations now, be where the action is.

A truly disruptive time in marketing

We can tie back into this being the third stage of embracing digital technologies – it makes the whole idea of what “digital transformation” is fairly confusing. I think a lot of CEOs, companies think we have already done the “digital transformation” because we’re using email, blogs, paid digital media. It goes back to that two-way conversation. People overuse the term disruption but this really is disruptive. It’s not as clear as telling your team – ok we need to phase out flyers and mailings or telemarketing to focus on digital. Now we’re telling them – they need to completely rethink HOW they are Tweeting. The way they Tweeted in 2013, or even 2015 is not going to work. It can be frustrating on both ends, like those who are evangelizing cannot understand those who want to keep things the way they are and the other way around.

There are some positives around these challenges though. In a McKinsey and Company article last month James Bilefield called digital transformation a Trojan horse for a much broader business transformation, “a time to review many aspects of a business’s operations from top to bottom—the talent, the organizational structure, the operating model, even products and services” and this rings true to my experience. Digital transformation is like the ultimate desiloization process for organizations, it gets everyone talking to each other and sharing ideas and resources and that is invaluable.

Technology needs to keep up with the new ways we’re marketing

It’s actually shocking how quickly you can see results of it when you apply best practices such as Joe Pulizzi’s (founder of the Content Marketing Institute) 4-1-1- rule – however the flip side of this is that again we are still trying to figure out how to use technology to measure some of these fairly new practices and prove that they eventually become leads. If you think about it, software that measures marketing KPIs has been completely designed for very traditional “push marketing” such as tracking visits back to product websites. It is not surprising that it is not easy to measure say – the free sharing of third party content or engagement marketing – because those technologies simply weren’t set up to!

Adaptability is key in the current workplace

You need have a lot of humility. What you see as best practices can vary – or certainly needs to bend on occasion – and you need to be open to listening to teams. Even as the expert in content marketing, if you don’t listen to the traditional marketing and product teams you will lose out.

You need to constantly be educating yourself about the newest trends and be agile – again there’s the humility – being aware that things are constantly changing and what you thought you knew about your audience, or certain marketing channels, it’s probably changed radically in the past six months!

James Bilefield talks about “putting a designer on your executive team, like we have at Apple now, or even making a designer your CEO, as Burberry has recently done.” We’re going to see more organizations hire journalists as marketers. Nontraditional skill sets – or a mix of disciplines – are becoming more valuable there’s a kind of a multidisciplinary approach that’s becoming valuable to employers.

McKinsey says that building a culture of constant change – and getting outside your comfort zone –  is key to success. Getting that type of entrepreneurial employee, who has a real desire to make things work and is driven to combat challenges by coming up with original solutions– because right now we’re in such early stages with content marketing you’ve got to be inventive – this is the type of person you want to think about hiring.

A Forrester report last year said that only 5% of organizations feel they have mastered digital to a point of differentiation from their competitors. It’s really a whole new language for marketers to learn. When we transitioned from ads in the newspaper or mailings to email, we used the same methods just with new media. Now we really are turning everything completely on its head. Suddenly, it’s not about putting yourself in front of the competitor, it’s acknowledging your competitor exists, and even, in some cases, providing information about your competitor to educate your audience. This sort of thinking is really a complete 180, but we don’t really have a choice if we want to compete as organizations.

You can watch the entire conversation here.

Is eCommerce Disrupting the Consumer Packaged Goods Market in China?

Global Consumer Goods Brands Disrupted by eCommerce in China

The findings of Kantar’s Worldpanel Brand Footprint Ranking surprised me last year, when I was just starting to learn about Global Consumer Packaged Goods brands. In my blog for Clavis Insight I described my experience learning about the significance of the brand Maggi for the first time. I wrote in June 2013: “The #1 status of Maggi reflects the world economy, where China is the world’s most populous country with the fastest growing economy. China’s ecommerce sales grew 65% between 2011 and 2012 and it is set to overtake America’s according to a recent report by the China Internet Information Center (reported in TechCrunch).”

These were foreboding statements. First of all, China has overtaken the US in eCommerce sales; secondly populations in China and the continent of Asia are indeed growing, and increasing their spending both offline and online – but they’re actually spending more on regional brands than ever before.

Kantar Worldpanel’s Brand Footprint Ranking 2014 report states: “For global food and drink brands…achieving …local domination in Asia is difficult. Local Asian brands in the Brand Footprint ranking grew at 3.1%, faster than the growth for global brands in the region (2.6%) and ahead of Latin America (1.2%). Globally, the world’s most chosen FMCG brands grew their footprint by 1.7%.”

The 10 Most Chosen Brands in Asia revealed by Kantar Worldpanel’s Brand Footprint study, followed by their consumer reach points in millions, are:
1. Colgate 2,111
2 Mi Sedaap 1,902
3 Indomie 1,820
4 Lifebuoy 1,652
5 Nescafé 1,328
6 Pantene 1,022
7 Kapal Api 944
8 Maggi 940
9 Surf 922
10 Lux 913

The Kantar study continues: “In China, foreign brands lost share in 15 out of 26 categories, notably in oral care, cosmetics and juice. As Chinese businesses become more market-oriented they are leveraging their extensive knowledge of consumers’ lives and acting boldly in response to local trends to establish a strong brand affinity.”

What I speculate here is that eCommerce could be a factor in this loss of market share. Kantar briefly discusses digital in its report, predicting that online consumer packaged goods sales will rise to 5.2% of the market by 2016 in the UK, France, US, China, Spain, Taiwan and South Korea. There is simply no research  – or at least egrocers and eCommerce sites have not released it yet – on exactly what percentage of their consumer packaged goods sales are online Globally. (Note: Tesco is an exception, they are one of the first egrocers to have released their online grocery sales.) If Kantar had those numbers they might learn that eCommerce may be disrupting the growth of Global consumer packaged goods brands. Why?

Take a look at my brief report “Online Grocery Shopping in Asia” – on slide 14 in bold print I write “Most eCommerce occurs on digital marketplaces.” Consumers are buying consumer packaged goods at those digital marketplaces, and this is most likely aiding in the 3.1% growth of local Asian brands.  No one has the exact numbers right now, but the evidence is right there. John Fang of the China market research group describes the current scenario: “Worries about pollution may be making consumers shift to online shopping even faster. So brands absolutely need an online presence to reach their customers where they are looking to buy.”

Keeping Your Brand at Top of Mind with Microsites

Last month the digital marketing agency Mediative released a white paper detailing their success with a Mondelez brand microsite that they designed for Walmart.com. The results were promising for the future of CPG brands online. Using display advertising, Mediative drove “highly interested” online grocery shoppers to the microsite which can be seen here.  The microsite’s goal was to create an interactive and visually appealing online destination where customers could get recipes and have a bit of fun – all in order to “engage, educate and inspire” customers and build awareness about the Mondelez brand.

Mediative reports that the top performing search banner showed a click-through-rate of 5.64%, compared with the much lower average Walmart.ca site click though rates of .11%. Additionally, once customers reached the microsite, they spent 450% more time on each page than average.

Mediative’s statistics show that online advertising such as this Walmart.ca microsite can increase brand affinity by up to 60%. Mediative’s goal was to create “a meaningful connection between the customer and Mondelez’s products” to “keep Mondelez top-of-mind with consumers when shopping for snacks at Walmart.”

Keeping your brand at top of mind, whether you are selling at Walmart, Amazon or several other of the top ecommerce sites, is of the utmost importance on the competive new “online shelf”.  “E-commerce seems to be democratizing ‘shelf space’ as top brands do not dominate the e-commerce channel as much as they dominate brick-and-mortar retail,” says a September 2013 report from Sanford C. Bernstein.

Why Are Companies Dragging their Feet When it Comes to the Digital Space?

This fall Kantar Retail released a digital industry benchmarking study which found that retailers and manufacturers have a long way to go in the digital space.  The study ranked companies in three tiers: the top having made significant investments in digital which they called “performing”; the second “progressing” and those only just emerging from a brick-and-mortar approach “participating”. P&G and Unilever were some of the manufacturers rated as “top tier” or “performing”; but many companies were simply not evolving. One retailer respondent said of their experience with manufacturers that: “No one is doing a good job of building their brands via digital. They are using digital as just another form of advertising.”

The mantra is that “the shopper has gone digital and the industry must follow”  – so why the dragging feet on the part of so many consumer packaged goods manufacturers?  A recent Consumer Goods Technology article called “Optimizing Brand Value” gives some good insight as to why. Much of the issue lies in the complexity of CPG data. Executives from Hub Designs and Stibo Systems related the difficulties that CPG manufacturers are having entering the online space in the Consumer Goods Technology article.

The article states: “Consumers today have many new avenues available for finding products; however the information they seek is often on websites that the CPG company doesn’t even control. As a result, these sites often provide inaccurate information copied or scraped from yet another website or third party app.”

They go on to explain that a combination of staff issues with fragmented business units and information systems that are siloed cause major challenges for brand and product information. Issues such as out-of-stocks; missing or inaccurate ingredients or poor translations of product information, they say, can add up to potentially damaging customers’ experiences with the brand – driving consumers to the competition.  “Poor data quality is not just an internal issue anymore; inaccurate data may have damaging consequences for everyone in the value chain and it can lead to bad press and negatively affect your customers’ perception of your brand.”

 

CPGs Customers Are Changing

Hispanic population is fastest-growing and youngest in US

The new landscape of marketing for CPG is a rapidly, and radically changing US population. If you are an English speaker, you may have noticed the fairly new TV commercials that are in both English and Spanish. Not surprising that companies are doing this, because the Hispanic population is the fastest-growing and youngest segment of the US  population. This population is a key target for growth among CPG brand manufacturers.

What do we need to know about the changing population? A recent eMarketer article had some valuable statistics every CPG manufacturer should know about the Hispanic population: Hispanics do more grocery shopping than the average US shopper and they also spend 20% more. Food is very important to Hispanic culture: 75% of Hispanic families sit down for a meal together every day.

American population is getting older

I have to admit I was taken aback this spring when I saw online ads showing Dancing With the Stars and NFL players sporting Depends. No longer fodder for late night talk show humor, products for the “Depends wearing set” are (literally) coming out of the closet and hitting the mainstream. There’s a good reason for this too – the US population approaching is middle age and getting older. According to the US Census the median age of the US is 37.2  –  right now there are the same number of people older than that age as younger.

And what about the growing population of older folks? What do CPG companies need to know about them in order to attract their dollars? RetailWire recently devoted a blog discussion to the new Amazon site devoted to the 50 plus crowd called “50+ Active and Healthy Living Store”. The articles’ many comments are telling – readers called the site anything from “clinical” to a “turnoff” with a too heavy focus on “incontinence”. Hopefully Amazon read that article and is now thinking about ways to improve the way they market to a graying American population.

There will be some growing pains. This is a new challenge for advertisers who have thought of the US population in very different ways up until now. I can give a pretty funny example. I recently witnessed a 65 plus woman watching a commercial at a local restaurant. The commercial showed active, pretty older ladies dancing around in colorful outfits to upbeat music – then at the end it flashed the name of a product briefly up on the screen. I had to smile when I heard the woman comment, “I like the commercial but I am not sure what it was for”. In their attempt to change the way it marketed a traditionally not very hip item, the manufacturer really confused the target audience  – or at least the potential customer I was sitting next to.

Leah Kinthaert

 

Recent Mobile Marketing Trends for CPG Companies

Leah Kinthaert

A new study by Millennial Media and comScore shows that mobile spending for consumer packaged goods went up 235% from 2011 to 2012. They studied a group of mobile users over a three month period and found that 29% of men and 41% of women used their phones to research consumer product details. For in store mobile usage, 40% of women and 47% of men used their phones to find deals or coupons. These consumers also used their phones to check availability, compare prices or consult with friends or family. The study found that beverage companies are the largest advertisers, with 43% of the mobile advertising spend followed by 28% for personal care, 14% for food, 10% for household products, and 5% for pet products.

Just how are CPG companies and retailers using mobile? I took a look at some major players which include retailers and manufacturers in the CPG space. I discovered that CVS, Coca-Cola, and P&G all have instituted noteworthy mobile advertising campaigns this year. Here’s a look at how these companies are starting to engage customers via Mobile:

CVS has developed a Mobile APP, and to promote it they are giving away 1 million smartphones. As of this writing, customers can get a free smartphone on their website at CVS.com/smartphone.

P & G used mobile video for a recent Tide campaign. Tide is the official laundry detergent of the NFL, so in this campaign they asked users to submit their favorite photos of their game-day gear. Using the knowledge they have about NFL fans – the fact that they constantly check scores and read team news, they had a hunch that asking fans to share content about their favorite team would create an enthusiastic response.

For their first all–digital campaign, Coca-Cola – with agency Wieden + Kennedy – is targeting teens using games and other digital content based on their marketing research.

These efforts have literally all just begun, so it will be interesting to see if their results will prove that the spending is justified – and how these mobile advertising campaigns will evolve as consumers access and interact with this new breed of digital content. Pio Schunker, svp of integrated marketing communications at Coca-Cola North America admits that Coca-Cola’s new campaign is experimental, but they are prepared for this challenge with a campaign that will be constantly in test mode. Interviewed in Adweek, he described their strategy: Coca- Cola will analyze the digital content two times a week and switch out mediocre performers to test new ones. Shunker says: “This is meant to be a constantly iterating campaign…We fully expect to end up in a completely different place compared to where we started.”

Do Consumers Want Organic Products?

Leah KinthaertAlthough it seems everywhere you turn around these days organic and all natural products seem to be very popular, with retail chains going so far as to grow produce on their own rooftop greenhouses and almost daily news reports about food and its relation to health and the environment, the bottom line is that consumers are not necessarily reaching for organic products – shown very vividly in a recent poll done by SmartBrief where only 3.88% of respondents said they were willing to pay more for organic grocery products. A new study by Mintel research shows that new product launches are reflecting this “consumer fatigue” for organic – in 2010 natural claims were featured on 14% of new products, while in 2012 that number dipped to 10%. And according to a March 2013 Harris Poll, the majority of consumers (55%) believe that organic products are healthier, however they are wary of the phenomenon of “greenwashing” – which is where jargon is used to confuse consumers and rack up prices. 59% see labeling products as organic as an excuse to charge more.

Other research has viewed recent trends a bit differently. The Organic Trade Association’s recent study says that 81% of households purchase organics “at least sometimes”. When they asked parents specifically, 42% said their trust in organic products has increased, versus 32% who said this a year ago. Organic products have definitely increased in a huge way since the mid 2000s. Research from World Watch Institute shows that the number of products marketed with environmental claims each year in the US grew from around 100 in 2004 to more than 1,500 in 2009.

Consumers are definitely aware of the affect that food has on both their health and the environment than they once were, but they are concerned about cost and don’t want the wool pulled over their eyes when it comes to advertising. A survey done by Cone Communications shows that 71% of consumers “wish companies would do a better job helping them understand environmental terms” and 48% “are overwhelmed by environmental messages”. In 2012 the FTC updated its “Green Guides” for the first time since 1998; they are aggressively taking action on deceptive or otherwise incorrect environmental marketing claims. More than ever before, customers are seeking precise information about products – and this information needs to be consistent on product packaging, in stores and online – wherever the product is represented or sold.

Humor a Win-Win for Marketing

Leah Kinthaert

Photo by Jon Aslund

From the recent Kmart TV ad “Ship My Pants” to a great roundup earlier this month of “7 ways to win laughs in social media” by Drew Hubbard of iMediaConnection, humor – especially the silly, unsophisticated kind a 6 year old will understand – has been shown to be powerful marketing tool.  Drew describes the use of humor in marketing aptly: “humor — when done correctly — increases the likelihood that ads will be remembered and, more importantly, shared with others. And let’s face it: Knowing that you made a person laugh just feels good.”
I myself will never tire of puns, silliness and goofiness – good old fashioned, non-offensive-to-any-group-humor is a creative way to add life to anything from your marketing campaign to your work day. Who doesn’t want to high-five the guy dancing wildly in his Liberty Tax costume  or get a free ice cream cone from a lady dressed in a cow outfit?

Cleaning House in 2013: Email Marketing Right Now

Leah Kinthaert

In today’s Media Post Email Insider article “How Email Marketing Will Change in a Post Recession Economy” Mike May talks about the current fiscal optimism and how it will reflect on email marketing: “Leading the way is email, at about $40 in sales for every $1 spent, according to the DMA. Do not be surprised to see email funds stolen back from social media, where the ROI is only about one-third as much.”

Before we all decide to switch gears to email marketing, however, it’s a good idea to look at worldwide IBR or inbox placement rates. In 2011 they showed a decrease from 81% in the first half of 2011 to 76% in the second half.

This is good for email recipients, and although scary, it’s ultimately good for email marketers. Essentially Google and other ISPs have taken it upon themselves to clean those emails lists we’ve mechanically been sending to. Now unless a recipient is opening, clicking and otherwise engaging with your email – you will be considered a spammer.

We need to take a much closer look at our lists. Rob Willis, in his recent blog article at “Postcode Anywhere” describes the crisis marketers are having with data today. He discusses recent research done by the company Dynamic Markets which says that 29 per cent of companies believed they had lost a customer because of inaccurate data. The most common problem caused is sending mailings to the wrong address, and this includes both email and direct mail. The second most common problem is sending multiple mailings to the same customer.

No one wants to deal with data clean up. If you’re lucky, your email service provider keeps your lists tidy for you. But if your company doesn’t have a large email service provider, then you’re probably stuck with messy lists.  Your sales team doesn’t understand why the list that looks like several thousand people is actually only a handful of engaged people, a handful that gets smaller as you keep sending to those unengaged groups. If you are stuck doing it manually, I advise you just grin and bear it. In fact, it should be the beginning of your relationship with a new client or sales team  – the list cleaning should come before anything else, because that great content won’t be reaching anyone if you don’t attend to the lists first.

Once you’ve got some nice cleaned lists, it’s time to focus on relevance, content and timing. There are tons of articles out there with the most recent best practices, so I won’t go into those. However, I found some noteworthy ideas from Listrak’s White Paper “7 Reasons Your Messages Are Missing the Inbox”.   They advise marketers to  target their best customers to help them rebuild their reputation, something I had never thought of doing.

  •  Here’s how they say to do it:
    •  Entice them to click links
    • Ask them to click the “Not Spam” button with an emotional call-to-action.  Try subject lines such as “We’re in trouble and need your help!” or “Attention Gmail User:  Please Help!”
    • Set up an automated re-engagement campaign to non-openers
    • Perhaps the first email includes your very best offer and uses a subject line such as, “We miss you & want you back”
    • Your second email might ask, “Would you like to continue receiving promotional emails from us?” and includes the option to say Yes or No, as well as the option to change the frequency of messages
    • A third email tells non-openers that it’s their “Last chance to save” or “We hate to see you go.”  Ask them to verify their subscriptions, and tell them that if you don’t receive a response to this email, they will be permanently unsubscribed from the list.  Position a “verify your subscription now” button centrally within the message body
    • The last message is your “Breakup and Goodbye.”  Tell them that you’re  sorry to see them go and that their accounts have been suspended, all while providing a way to re-subscribe.
    • Purge everyone from your list who hasn’t opened within one year—bigger isn’t always better!

 

 

How to Beat the Competition?Just Show Up

Leah KinthaertThe cool thing I have noticed about marketing lately is that many people just aren’t doing the stuff they should be. It pretty much leaves an open playing field for those of us who are ready to roll up our sleeves and get our hands dirty. Woody Allen once said, “80 percent of success is just showing up” and that is more true than ever before for marketers. Whether it’s a high conversion rate for a B2B medical software company using snail mail, or a positive response from telemarketing campaigns for magazine subscription renewals – I have come across incidences where some of the most outdated, uncool methods can actually work very well for certain industries. It makes sense – customers are simply not used to getting things like phone calls and snail mail anymore, making them almost a novelty!

The same holds true for digital marketing. A study I read recently showed high conversions for emails sent on Friday nights of all things.  It makes sense, all of us marketers think we’re so smart sending emails out on Tuesday at 7am – and now Tuesday is the new Friday (Or Friday is the new Tuesday, either way you know what I mean). Plus with mobile more and more people are cleaning out their inbox over the weekend or maybe they’re simply bored and want to check email, so the idea of not being able to reach clients on the weekend doesn’t necessarily fly anymore. Blogging is another place where marketers have been dropping the ball. In his post “Your Corporate Website Needs To Become a Trap” Chris Abraham discusses the current “ghost town” of corporate blogging and mentions that it’s a great time to blog right now:

“Blogs are not dead, though there are way fewer corporate blogs than there had been. This is good for you. It’s sort of like the New Year’s resolution everyone makes to go to the gym, clogging the gym for January and February. Soon, though, people lose their motivation and drive and the gym mostly clears out. The blogosphere might have cleared out some but not because blogging has become passé but because people are lazy and uninspired. The Internet is littered with failed attempts at corporate blogging: it’s a ghost town. Why is this good for you? Well, the environment is less competitive for being read but is a thousand-times more ravenous for interesting and shareable content: your blog! As a result, there are folks all over Facebook, Twitter, Fliboard, Pinterest, Google+, LinkedIn, and Tumblr who are looking for things to share to show how smart they are to their followers but no longer blog themselves. So, they poach and poach and steal and share, hoping that what they share reflects their intelligence, insight, and taste. If you play your cards right, you can be one of the links they share on their own profiles as a way of showing how current, insightful, and modern they are — they’ll use your words and insight to prove their mettle — it’s a brilliant trick and an amazing trap. If you play your cards right, your competitors might very well become your best sales force. That’s enough reason to blog: social media runs on the links of other peoples’ content. Make that content yours.”