Should FMCG brands shift spend to digital or return to TV advertising? Should content be created in-house or by an incumbent (hi Pepsi). How can a brand stay ahead of the curve and on everyone’s shopping list?
From my research team’s latest conversations with marketers at the top spending FMCG brands it’s clear that many are wrestling with the same big questions. Here are a few insomnia-inducing conundrums that marketers in the sector are contemplating...
How to get on the shopping list
For many household names, getting on the shopping list is surprisingly difficult – it’s been brought up by everyone from Tetley to Lurpak in recent weeks. As marketing objectives go, it’s pretty old school, but a perfect storm of long and short term market forces is prompting many FMCG marketers to contemplate how they can cement their place on the humble shopping list. A weak pound, consumer purse strings tightening, more in-store distractions and promotions and supermarkets delisting sacred cows (including Heineken, my hot weather beverage of choice), are all contributing to brands feeling that their best chance of making it into the basket is to be a consciously pre-planned purchase.
Shopper marketing agencies will undoubtedly have a view here, but from speaking to the brands themselves, it’s worth acknowledging that many marketers are not comfortable with the unpredictability of battling for consumers’ pennies in-store. Instead they are focused on campaigns that will generate mass awareness, brand preference and recall.
When to turn on the TV tap
2017 may be the year that internet ad spend surpasses TV, but patchy and unpredictable results are causing pause for thought among the most senior marketers at the top spending brands. P&G's chief brand officer Marc Pritchard recently admitted that targeted ads on social media are not delivering the results his team had hoped for, while Unliever's chief marketer Keith Weed announced that online advertising "needs to smarten up" to avoid undesirable juxtapositions on YouTube. P&G has increased traditional ad spend by 25% over the past year and so far in 2017, one in four brands we’ve spoken to – including Lurpak, Kingsmill, Kellogg and Dolmio – have noted the effectiveness of TV advertising in delivering not just awareness, but sales.
For digital shops looking to secure larger budgets, it’s important to home in on the questions and uncertainties that are troubling the specific brands you want to work with. Vanish’s marketing team for instance recently told us agencies can add most value by helping them to better understand the online path to purchase of its products. Dettol’s marketing team is seeking greater personalisation – looking to develop ways to tailor the destination of click-through, depending on the brand in question and the consumer that is clicking on it. Cadbury’s marketing team meanwhile expressed disappointment that spikes in the number of people researching its brands are failing to turn into the sales predicted online. Each of these examples serves to illustrate the sector’s unfulfilled ambitions to master digital channels to drive sales, with the implication that there is an opportunity to pitch other “proven” marketing channels in the meantime.
Under the influence
It will be of no surprise that marketers at beauty brands like L'Oréal, Revlon and Benefit Cosmetics are all highly invested in the value of influencer marketing – in fact, Revlon told us it sees the number of influencers an agency has in its portfolio as something of a hygiene factor for engaging with them. More surprising might be the likes of Tetley, who are increasingly recognising the impact that both famous faces and real life people as influencers can have in making Tetley part of the weekly shop.
Other brands like Fage Yogurt have yet to go down the influencer route, instead relying on TV, their own website and social activity to drive awareness, but we anticipate it will turn to influencers or experiential activity as a way of engaging its 25 to 55 female ABC 1 target audience before the year is out.
What does fresh mean?
Any business development professional that’s targeted top tier FMCG brands will know that competition for the attention of marketing budget-holders, let alone winning new business is incredibly fierce. There’s a degree of fatigue on both sides of the prospecting fence, as brands are presented with what they feel are generic approaches and agencies scramble for a snappy differentiator that will get them a foot in the door. There’s no uniform recipe for success here, but it’s worth remembering that even the most unapproachable brand-side marketers are still always on the look-out for what they consider to be a 'fresh perspective.'
For example, McCain’s marketing team recently told us they’re always more likely to consider something they receive from an agency that has “walked into a store and experienced it first-hand”. For the Dolmio brand team, FMCG sector experience alone is too broad. The brand told us that surprisingly, few agencies actually have creds or insight into the sauces category – so this would be a real differentiator for them.
Sector experience for Quorn can actually be off-putting. Its marketing team recently told us that often companies with less experience in a particular industry can offer a fresh and innovative approach. Galaxy’s marketing team urged agencies hoping to win work to “avoid the obvious”. For them, this means providing some insight or perspective on their audience that has not been widely publicised and could have an impact. In other words, simply having a grasp of the sector topics everyone is discussing will get you precisely nowhere.
Beer brands have the meta challenge of sourcing fresh thinking on how to be seen as fresh, aligning themselves with the broader consumer demand for freshness. We know Anheuser-Busch InBev has even considered putting beer products in the fresh food aisle to try and achieve this, while Heineken dabbled with wrapping its bottles in paper and increasing the price for its 'Extra Vers' line.
It’s also never been easier to fall out of favour. Carlsberg recently spoke about the holy grail of creating brand loyalty among millennials, who seem to be highly price sensitive, enjoy trying new things and bore easily when it comes to the drinks space.
Charles Wells echoed this, saying beer brands need to stay as close to consumers' demands as possible to even survive in such an oversupplied market. As a result, its marketing team isn’t just interested in what people are drinking now – they want to anticipate how tastes will evolve in the years ahead.
Find a problem you can solve
So, whether you’re able to accurately predict what we’ll all be drinking in 2020, or tap up the most influential online voices in the mainstream tea drinking scene, the first step towards winning work with the top spending brands in the FMCG sector has to be identifying which ones have problems you can solve. Don’t be fooled by claims that rosters are static or that the sentiment of marketing budget-holders is uniform – they may share many of the same overarching challenges, but few are in agreement over the best way to solve them.
Mike Thorne is commercial director at Pearlfinders.