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The Drum

Kellogg’s believes partnerships not ‘pay for performance buys’ are the future of media strategies

Backed by new agency DigitasLBI, Kellogg’s is working to understand how media strategies can affect actual behaviour change to stand out from those brands trying to buy reach.

Kellogg’s believes partnerships not ‘pay for performance buys’ are the future of media strategies

The ‘shout loud enough and they will come’ approach doesn't works in isolation, claims Kellogg’s, which is consequently doubling down on its owned and earned media.

But it can’t do that alone and hired DigitasLBi along with Carat and iProspect earlier this month to drive the strategy across Europe. No one agency is the designated lead, with all three expected to naturally come to the front as dictated by the project. By doing that, Kellogg’s believes it will always get the best from its partners in a collaborative setting that eschews the ‘suck it and see approach’.

On this strategy, DigitasLBi’s global client services director Laurent Ezekiel shared a glimpse as to what type of work it is likely to do, yet declined to go into specifics so early on in the partnership.

"We have only just been appointed but we put data at the heart of our decision making process,” he said. “How people will consume content and how we help Carat plan media will be very focussed on owned and earned channels. The earned channels in particular played an important part on our response. This is especially true for Kellogg’s brands focussed on a younger demographic.”

Like many of its peers, Kellogg’s wants to buy certainty, particularly from those investments at the innovative end of the scale. Rather than ploughing funds into the latest technology, the cereal maker expects its agencies to be more tactful. “We definitely try and apply the 70:20:10 rule but we don’t do it by carving out 10 per cent of the budget and going ‘that will be used on everything to do tens’ because we found that you end up trying lots of things that get thrown away,” said Chris Nolan, media and digital director for Kellogg's EMEA.

“It’s more a case of our agencies understanding whether we feel something could work – we don’t have to know that it will – and can be scaled and is measurable in some way. If we can measure it, trial and validate it then the next stage is moving it into the 20 per cent pot. This might mean trying it in other markets or doing it on more brands to a point where whatever we’ve been investing in has worked, we’ve then scaled it and it still works before we roll it out across the board.”

Kellogg’s knows it can’t expect more from its agencies without rewarding them in kind and so is revamping its remuneration model. Nolan declined to share details but said it is evolving.

“The reality is whatever we agree will be fixed for a year but we will go back and look at the methodology of it every year because we want to pay our agencies a fair amount,” says Nolan. “If we set up a remuneration model that either means our agencies don’t get paid or it prevents them from doing the thing that we all want to do because it would end up with them not getting paid anything then it’s in everyone’s interest to change that.”

But it is in Kellogg’s interest to share responsibility of its customer data with its agencies. Any personal data is stored by the cereal maker itself, while data from its websites, ads or any other anonymised form is held by its agencies on the proviso that they can’t use it for any of their clients and that it gets removed should the account move to another shop. A data management platform (DMP) could allow Kellogg’s to hold all those insights held within its agencies like it does in the US, though Nolan says there are no plans to building something “for now”. That “doesn’t mean we won’t change our mind in six months,” he teases.

Sharper data insights would also go some way to informing the company’s programmatic plans. Kellogg’s was one of the early adopters of the practice, building out its own ad tech stack several years ago. Despite having a more robust offering than most, the business is doubtful that it will buy all its online media this way anytime soon. Scale and a fragmented market are the biggest barriers to making this happen as suggested by Nestle and GsK last year.

“Even in the UK, which has the most programmatic [inventory], there still isn’t enough to get the reach we would be after without using other sources of inventory,” says Nolan. “If all the walled gardens came down and we could buy [across] all the platforms then yes we probably would [buy all our online media programmatically] as long as we had the right partners in place to monitor security and placements as well as know the viewability aspect of [our ads].

On the subject of viewability, Nolan outlined the company’s stance on gauging the effectiveness of its ad placements, explaining that Kellogg’s agencies are not briefed to purchase only 100 per cent viewable ads. Instead, it is only interested in the “viewable impressions! – “that’s what is important to us” in terms of the “CPMs, viewable reach, ect”.

“It means that we don’t ask anyone to optimise to the highest percentage of a viewable [impression]. It’s always about the reach levels of viewable impressions,” assures Nolan. Does this mean the business thinks it will be able to buy only viewable only impressions anytime soon? As appealing as the idea sounds, Nolan appreciates that a great deal of consolidation needs to happen before he and his agencies can even start to think about such a move.

“The different [measurement companies] mean that no one can agree on what is and what isn’t viewable. If that’s resolved then I think they will all trade on viewable impressions and anyone who isn’t then you’ll have a good idea of why they’re not doing it,” he adds.

‘Pull not push’ marketing has been espoused by marketers for years but for a whole host of reasons many have regressed to the latter. The recent furore around rebates to media agencies is testament to that, spotlighting procedures for trading mass reach that are well past their sell by date.

Kellogg’s is aiming for something different, and is working with its recently appointed agencies to bridge the gap between efficiency and efficacy. “Within Kellogg’s [the marketing team] have complete oversight of our media budgets along with our procurement team, which manages the contracts,” explains Nolan.

“We have a specialised media department within Kellogg’s which monitors all of the media plans and all of the budgets on those plans, which is a very different process in every market. On top of that we employ analytics firm Ebiquity as a third party to monitor all of our activity across the whole [Europe] region. We have very good sight of all our budgets, all our spend and all of the rebates that are happening – and contractually they’re returned to us.”