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.”