Vantage Point: Social Media's Impact in Global Environment of CPG Industry
By: Somjit Amrit, VP & Global Head, CPG Industry Vertical, Wipro Technologies
Growth of Global Marketing Campaigns in CPG
A shift has occurred in the consumer package goods (CPG) industry over the last few years. Earlier, companies invested in countless surveys, consumer reports and dip stick studies to understand consumers' needs. In the past, the focus of CPG companies was on the retailer but now, building closer connections with the consumer is the priority.
Social Media has given these companies the tools to facilitate conversations and collaboration. Social Media tools are critical to building deep and long lasting consumer relationships. Their success can be seen in their increased popularity. For instance, according to a survey conducted by the Grocery Manufacturers Association (GMA) in December 2009, approximately 64 percent of CPG companies are shifting marketing resources from traditional media to social media. Moreover, Forrester predicts that social media, which includes social networking, user reviews, syndicated videos and blogs, will become the third-largest interactive marketing spend category in the next five years.
The benefits of social media are clear. These new technologies have enabled companies to implement better strategies for global campaigns. In many cases, these campaigns represent different brand profiles across various geographies. Given this, it is critical for CPG companies to devise a strategy to create, deliver and measure their global marketing programs.
To illustrate the thought process, consider the global marketing campaign from Unilever, "Dirt is Good," for their leading global laundry brands, which includes Persil, Skip, Via, Omo and Surf Excel. This campaign spans several languages, brands and consumer cultures, yet the core of the campaign is universal: children like to play in dirt all over the world.
What's more, in the Netherlands, the laundry brand Omo was accompanied by a socially-inclusive TV, digital and print advertising campaign encouraging children to form their own outdoor play clubs and register them online. Kids were further engaged through online forums, games, and contests judging the most innovative play clubs.
Emergence of Diverse, Distinct and Complex Social Media Platforms
Despite the success of social media in engaging consumers directly, research has shown that while the internet has a 26 percent share of daily media time, CPG companies spend just 2 percent of their advertising dollars there1. In order to deliver a consistent message in a global program, a CPG company must adopt a multimedia approach since there is no channel or network that has a clear dominance across the globe. Social media marketing has become incredibly diverse, distinct and complex based on a multiplicity of cultural, economic and political variances across nations. From Brazil's Orkut to China's QQ to the Philippines' use of Friendster, each nation has its own social media nuances. Thus, understanding the need to create these varied, unique and integrated customer experiences is extremely important to measure future success.
Need for a Consistent & Integrated View of Marketing Communication
Numerous combinations of brands, media and platforms have resulted in a clear need for an integrated view of global marketing campaigns and in establishing a need for a closed loop communication. More than distributing messages, establishing closed loop communication where the consumer voice is encouraged yet monitored, is essential in order to maintain control over your brand in a context where the consumer has increased power over messaging. This balancing act is one that requires special attention, skills and creativity. In addition to closed-loop communication, quantifying metrics are also a necessity. The growth in the number of social media channels has also made it difficult for global CPG companies to manage, track and compare the performance of each channel. Lack of insight into channel efficiency, customer media preferences and ROI measurements have resulted in ineffective spend for online campaigns. With the CPG digital marketing spend growing at 57 percent over the last two years, there is a pressing need for a strategy to have integrated campaign management that can provide a single view for diverse campaigns across Facebook, QQ, YouTube, MySpace and other social media channels. Integrated campaign management of social media channels would enable clear comparisons of the channel performances vis-a-vis brands across customer engagement, brand loyalty and cost effectiveness parameters.
Platform to Enable Global Control of Influencing Messages
Today, a global CPG company needs social media tools which not only push positive messages but also control the spread of unfavorable content about its brand and products. When Nestle's KIT KAT wrapper came under attack by Greenpeace's "Killer" campaign for being "non-friendly" to the environment, Nestle should have had an active social media counter-campaign in place to rectify its brand image. Yet another advantage to integrating social media into your CPG marketing platform is to gain competitive intelligence. The chart below outlines where and how this integration can take place.
Growth of Global Marketing Campaigns in CPG
A shift has occurred in the consumer package goods (CPG) industry over the last few years. Earlier, companies invested in countless surveys, consumer reports and dip stick studies to understand consumers' needs. In the past, the focus of CPG companies was on the retailer but now, building closer connections with the consumer is the priority.
Social Media has given these companies the tools to facilitate conversations and collaboration. Social Media tools are critical to building deep and long lasting consumer relationships. Their success can be seen in their increased popularity. For instance, according to a survey conducted by the Grocery Manufacturers Association (GMA) in December 2009, approximately 64 percent of CPG companies are shifting marketing resources from traditional media to social media. Moreover, Forrester predicts that social media, which includes social networking, user reviews, syndicated videos and blogs, will become the third-largest interactive marketing spend category in the next five years.
The benefits of social media are clear. These new technologies have enabled companies to implement better strategies for global campaigns. In many cases, these campaigns represent different brand profiles across various geographies. Given this, it is critical for CPG companies to devise a strategy to create, deliver and measure their global marketing programs.
To illustrate the thought process, consider the global marketing campaign from Unilever, "Dirt is Good," for their leading global laundry brands, which includes Persil, Skip, Via, Omo and Surf Excel. This campaign spans several languages, brands and consumer cultures, yet the core of the campaign is universal: children like to play in dirt all over the world.
What's more, in the Netherlands, the laundry brand Omo was accompanied by a socially-inclusive TV, digital and print advertising campaign encouraging children to form their own outdoor play clubs and register them online. Kids were further engaged through online forums, games, and contests judging the most innovative play clubs.
Emergence of Diverse, Distinct and Complex Social Media Platforms
Despite the success of social media in engaging consumers directly, research has shown that while the internet has a 26 percent share of daily media time, CPG companies spend just 2 percent of their advertising dollars there1. In order to deliver a consistent message in a global program, a CPG company must adopt a multimedia approach since there is no channel or network that has a clear dominance across the globe. Social media marketing has become incredibly diverse, distinct and complex based on a multiplicity of cultural, economic and political variances across nations. From Brazil's Orkut to China's QQ to the Philippines' use of Friendster, each nation has its own social media nuances. Thus, understanding the need to create these varied, unique and integrated customer experiences is extremely important to measure future success. Need for a Consistent & Integrated View of Marketing Communication
Numerous combinations of brands, media and platforms have resulted in a clear need for an integrated view of global marketing campaigns and in establishing a need for a closed loop communication. More than distributing messages, establishing closed loop communication where the consumer voice is encouraged yet monitored, is essential in order to maintain control over your brand in a context where the consumer has increased power over messaging. This balancing act is one that requires special attention, skills and creativity. In addition to closed-loop communication, quantifying metrics are also a necessity. The growth in the number of social media channels has also made it difficult for global CPG companies to manage, track and compare the performance of each channel. Lack of insight into channel efficiency, customer media preferences and ROI measurements have resulted in ineffective spend for online campaigns. With the CPG digital marketing spend growing at 57 percent over the last two years, there is a pressing need for a strategy to have integrated campaign management that can provide a single view for diverse campaigns across Facebook, QQ, YouTube, MySpace and other social media channels. Integrated campaign management of social media channels would enable clear comparisons of the channel performances vis-a-vis brands across customer engagement, brand loyalty and cost effectiveness parameters.
Platform to Enable Global Control of Influencing Messages
Today, a global CPG company needs social media tools which not only push positive messages but also control the spread of unfavorable content about its brand and products. When Nestle's KIT KAT wrapper came under attack by Greenpeace's "Killer" campaign for being "non-friendly" to the environment, Nestle should have had an active social media counter-campaign in place to rectify its brand image. Yet another advantage to integrating social media into your CPG marketing platform is to gain competitive intelligence. The chart below outlines where and how this integration can take place.
At Wipro, we have created "SociONE", to analyze the global flow of marketing content. With our social media tools and solutions, we help our customers map their customer mindset. We develop customized social CRM strategies that enable organizations to achieve the next generation of customer engagement.
*Contributions from Kasthuri Rengan, Varun Khandelwal and Vijaya Kumar - Wipro Research Cell for its Consumer Packaged Goods Industry.
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Sources:
-- 1 Knowledge Networks, Inc, May 2009; AdAge Datacenter, 100 Leading National Advertisers Measured Media
-- businessinnovationfactory.com
-- emarketer.com
_________________________________________________________________________
Sources:
-- 1 Knowledge Networks, Inc, May 2009; AdAge Datacenter, 100 Leading National Advertisers Measured Media
-- businessinnovationfactory.com
-- emarketer.com
About the Author:
Somjit Amrit, Vice President and Global Head of CPG at Wipro Technologies (www.wipro.com) is responsible for the CPG Industry Vertical at Wipro Technologies as the P&L Leader. Somjit has played leadership roles in the IT industry, particularly in the retail, CPG, and manufacturing spaces, and his experience spans global markets including North America, Europe and Asia Pacific. Somjit's special areas of interest are in the business process of direct store delivery, trade promotion management, demand planning for perishable foods, and the impact of social media in the CPG industry. Somjit has written and published papers in industry journals like GMA Forum, and he was a contributor to a book on Direct Store Delivery (DSD), which was published by the Springer Publications in February 2009. Somjit is a Post Graduate in Management from Indian Institute of Management (IIM), India and a Bachelor of Technology in Electrical Engineering from National Institute of Technology (NIT), India.
Somjit Amrit, Vice President and Global Head of CPG at Wipro Technologies (www.wipro.com) is responsible for the CPG Industry Vertical at Wipro Technologies as the P&L Leader. Somjit has played leadership roles in the IT industry, particularly in the retail, CPG, and manufacturing spaces, and his experience spans global markets including North America, Europe and Asia Pacific. Somjit's special areas of interest are in the business process of direct store delivery, trade promotion management, demand planning for perishable foods, and the impact of social media in the CPG industry. Somjit has written and published papers in industry journals like GMA Forum, and he was a contributor to a book on Direct Store Delivery (DSD), which was published by the Springer Publications in February 2009. Somjit is a Post Graduate in Management from Indian Institute of Management (IIM), India and a Bachelor of Technology in Electrical Engineering from National Institute of Technology (NIT), India.