Imagine a consumer skilled at getting what they want, captivated by the screen in the palm of their hands, constantly bombarded by messages from personal contacts, the media and brands alike. With this consumer in mind, we have to question the existing advertising investment model, particularly in regards to television, brand-safety crises, ad blindness and ad blockers. New sales channels and new competitors have resulted in the barriers between on and offline blurring in the search for a truly unique shopping experience. Advertising as we knew it, “Mad Men advertising” so to speak, is no longer effective against the multiplicity of forces that now affect how we do business in the consumer goods industry.
Fast moving consumer goods (FMCG) have, for decades, sustained a symbiotic relationship with television, and there are clear formulas set in place for the advertisement of these FMCGs. James L. McQuivey and Keith Johnston, in an article for Forrester entitled The End of Advertising as We Know It, aptly described how advertising has helped to shape our society, both economically and culturally. The speed with which the industry is changing can be observed through the emergence of a new kind of consumer, an empowered citizen pursuing a more meaningful relationship with their favourite brands.
We’ve turned a page; the way in which we market products is focused not only on how the product benefits the consumer, but how it benefits society. Traditional advertising must give way to conversational, intelligent consumer relationships, across multiple channels. This relationship benefits not only the consumer, but the brand itself. “Meaningful” brands have the ability to improve their performance in the stock market by 206%, according to “meaningful” brand de Havas. Millward-Brown made a similar point, that “meaningful, different and relevant brands get three times more of their turnover from the brand’s strength.”
It’s not about reach, but relevance
Televisions remains fundamental in generating buzz around a brand, but reduced “share of screen” has meant that brands have had to turn their attention to social media, particularly Facebook which is able to reach the largest number of users (especially when you include Instagram). There are already 6-second TV advertising formats meant to resemble those shared on social media, and social networks like Facebook and Snapchat are claiming to be the new TV. There is a dialectical relationship between traditional and new media, whereby each seeks to resemble one another in terms of functionality, and both share an obsession with reaching the widest possible audience.
In an interview for Ad Age, Andrew Keller, Global Creative Director of Facebook Studio, explained how brands could develop a communication framework through the company’s platform; “Instagram Stories will be what we will see most. We talked a lot about a framework through Facebook platforms: 70-20-10. Concentrate 70% of the efforts on short videos, mobile first, 20% on interactive pieces, and 10% on immersive spaces.”
That said, new media investment strategies currently prioritise reach over engagement, subsequently overwhelming the audience. We must avoid what prompted us to look beyond TV in the first place – unilateral discourse.
Although audiovisual communication is undeniably the most successful form of social communication, the 30% of investment we put behind it, aimed at strengthening linkage, could potentially help us to get to know our audience better, through the clustering and creation of custom audiences that help us build archetypes or buyer profiles, so that we can then offer individuals ad hoc communication. It could be the key to more relevant, less intrusive advertising. And how can we cement this relationship? Through personalisation, as well as through a purpose-driven brand narrative.
A purpose-driven narrative transforms brands from businesses into agents of social change. Unilever is a great example, with brands that include the highly purpose-driven Dove (which builds its discourse on self-esteem and female diversity), or Lifebuoy, whose mission is to reduce death from diarrhea across the world, through the promotion of proper hygiene and food management. In a relaxed conversation Paco Prat, Foods Marketing Director of Unilever Spain, theorised that in the current environment only brands with a focus on society will survive; “it’s about increasing the company’s turnover, reducing the environmental impact and improving the quality of life of citizens.”
Relevance, in such a highly competitive environment, lies not just in reach, but engagement. Through engagement we can identify insights which help us to solve problems, which then, in turn, allow us to create custom audiences, analyse clusters of data, and ultimately improve the experience of the highly informed consumer, who now expects deeper, and more intelligent relationships with brands. This kind of consumer is willing to pay more, for a more “meaningful” relationship.
“Digital Aikido” to transform the FMCG
The digital spectrum already encompasses all age groups in some way, and with mobile consumption on the rise, personal experience takes precedence over shared experiences. Leveraging declared data and behavioral insights provided by social networks, along with AI, augmented reality and the Internet of Things – these are all important elements to success – as long as we continue to prioritise the consumer.
To be able to operate in such a constantly changing environment, it is important to understand that these are not just technological advances, but new patterns of consumption, sociodemographic, geopolitical and industrial changes. We must not ignore or oppose these changes, but rather recognise them and understand how they might benefit our own business, and, at the same time, satisfy the hyper-consumer of the 21st century through convenience, products that improve health and wellness, personalisation (push) or customisation (pull) of products and services, unique shopping experience and the simplification of alternatives at the time of purchase.
There are five areas in which we can work:
- Efficient and integrated marketing. Any digital activation campaign must be aligned with TV communication, while still abiding by its own rules and codes of communication. A campaign should consider talking to more than one archetype or buyer persona, understanding their journey, pain points and the experience they’re looking for. Much of this communication will take place on a vertical screen, geolocated, and through so many other points of contact, which we will be able to trace by means of cookies, social ID’s or fingerprints.
- Enriched sales channels. We have seen a resurgence in traditional brick and mortar, with stores that provide unique and digital experiences. Online channels face their own challenges, and require humanisation. Whether it is through our own channels (to offer comfort such as the Font Vella watermark, or personalised products such as My M&M’s store), or third-party stores, we need to relate better to our consumer and, if possible, enrich our CRM’s. Experience in in-house and third-party channels must be consistent, and we must work to understand the variations in the ways consumers make purchasing decisions. Intensive use of social networks (video and images) is changing the way we approach information, which is why commerce is becoming more social and mobile. The application of artificial intelligence in image recognition will translate into the ability to recognise faces (persons and their expressions as a reflection of feelings), logos and products, resulting in an increasingly image-based shopping model. Likewise, voice recognition technologies (Amazon Echo, Google Home, etc.) and chatbot interfaces integrated with our favourite messaging platforms (such as Messenger) will help us to find products in a world where the choice is almost infinite, and where price and convenience are no longer competitive advantages.
- New key account management models. The appearance of pure digital players, or even the opening of channels by traditional retailers, requires customised management and knowledge of these models. Management of the product portfolio by online retailers requires an ad hoc strategy, where the availability of the product portfolio is analysed (exclusivity of SKU’s, formats or custom-made products), price, special promotions and merchandising, as a relationship tool. In addition, it’s important that the brand experience is identical to that provided by the brand itself, so it is important to generate synergies in the creation of digital assets (both for social networks, as well as to list our products within marketplaces) and data-based decision making.
- Innovation in the product portfolio. After globalisation, the return to local in terms of innovation and product development would gain weight by being closer to the market and its own reality. For example, Unilever has a Consumer and Market Insights division to accelerate knowledge of their consumers. Consumer care is seen today as market intelligence, not as complaint management. Together with social listening and CRM, it offers a powerful market research tool. Or what’s the same, a powerful data-driven marketing.
- New models of innovation in business. Thanks to digitalisation, new players have appeared, able to leverage simplicity of supply (a competitive price, the rest are add-ons), competitors in niche markets, new own brands or direct to consumer models. And let’s not forget Amazon, they’ll most likely prove a hugely important player in the next e-commerce revolution, by controlling placement, advertising and boasting at least 41 own brands…all with the power to make decisions based off of analytics, looking for a direct access to the consumer.
The most important thing about digitisation within the FMCG industry is understanding what consumers really need, adding value, conversing with them in interesting ways and through the platform they choose. Dollar Shave Club in America, for example, offers razor blades and spare parts, delivered to your door, for a dollar a month; convenience and low-costs offered in an attractive way through social media. Dollar Shave Club is a lean company while managed to sell for a billion dollars. They understand what it was that their customer base wanted, and that to be able to compete in the current market it is not enough to sell a product; we must make technology our ally in order to compete with the big players.