Do CPGs need to up the ante and invest more in mobile?
While consumer packaged goods behemoths such as Procter & Gamble and General Mills count among the early adopters of mobile marketing, overall the CPG sector?s movement into mobile has been fragmented.
This is starting to change, however. More CPG companies are beginning to experiment with mobile campaigns while others dedicate more of their marketing budget to mobile.
?Innovation in mobile has certainly been around with the largest players in CPG since the inception of mobile marketing and there are still some to adopt,? said Laura Marriott, acting CEO of NeoMedia Technologies, Atlanta, GA. ?Some have been very aggressive while others are trying it on a brand by brand basis.?
One reason for some CPG brands? slowness to embrace mobile may have to do with the fact that most mobile advertising cannot be connected to a consumer purchase, making it difficult to determine the return on investment for mobile campaigns.
This, too, is starting to change, however.
This week, Nielsen Catalina Solutions and 4Info teamed up to link purchase data with mobile viewing data so CPG brands can better understand how well mobile ad campaigns are driving buying behavior (see story).
?CPG companies have kept pace with other consumer sectors in moving into mobile, but have had a more fragmented approach, as efforts such as couponing and retail location-based campaigns are trialed in attempts to track the ROI of mobile,? said Kirsten McMullen, director of marketing at 4Info, San Mateo, CA.
?True mobile couponing has been stymied by the absence of a universal coupon-reader system at point-of-sale, leaving CPGs with limited options for creating truly measurable mobile advertising campaigns,? she said.
?Naturally, better tracking on the ROI of mobile campaigns will encourage greater adoption of mobile.?
Interest in mobile marketing is also growing because consumers are apparently welcoming CPG?s mobile efforts.
In February, MillennialMedia reported that CPG foods brands experienced a 36 percent increase in response around Valentine?s Day compared with an average weekend while cosmetics and hygiene brands saw a 33 percent lift.
?As the number of smartphone users grows, both agencies and brands are finding that mobile presents them a unique way to reach their target audiences while they are on the go,? said Mack McKelvey, senior vice president at mobile advertising firm MillennialMedia, Baltimore, MD. ?In the CPG industry, where consumers have easy access to products and buy frequently, this is especially relevant.?
Greater engagement with mobile is encouraging CPG brands to increase their mobile marketing budgets.
Paul Gelb, vice president of mobile at Razorfish, Seattle, WA, reports that the digital marketing agency has seen a big increase in mobile marketing from CPG brands in recent months and expects the growth to continue throughout the year.
?CPG brands have a significant budget dedicated to print, couponing and circulars and as that audience continues to shrink, the budget is being reallocated to other channels, with mobile increasingly becoming a recipient of the dollars,? Mr. Gelb said.
Mobile does not just replace these other channels, however.
The consumer connection
?Mobile is a much more valuable opportunity because CPG brands can reach consumers in engaging ways when they have a minute of free time,? Mr. Gelb said.
Another opportunity that Mr. Gelb sees for CPG companies comes from mobile?s ability to provide direct access to consumers.
?Retailers own all the data about consumers? activities in-store, which historically have had the biggest impact on purchase decisions,? Mr. Gelb said. ?Mobile, however can provide manufacturers with in-store consumer data outside of point-of-sale data.
?This provides an opportunity for companies to create more efficient and effective marketing by seeing what?s working in-store and not having to rely on retailers to say what they think is working,? he said.
?This will enable brands to find the optimal marketing mix to deliver the right message and experience to the right consumer at the right time.?
"There are also many opportunities emerging in mobile for CPG brands that are adopting mobile to work with retailers collaboratively on this highly effective channel to achieve mutually beneficial objectives."
Using mobile to send SMS messages to consumers is popular with CPG brands and, increasingly, these efforts are becoming more sophisticated.
With SMS, for example, CPG brands are using it to extend their mobile efforts into mobile.
?I remember a time when a campaign?s call to action on millions of candy bars was on the inside of the wrapper,? said Jeff Hasen, chief marketing officer of mobile marketing agency Hipcricket, Kirkland, WA. ?Now this information is impossible to miss because it?s front-and-center, prominently featured on the packaging.?
CPG brand are also using SMS to extend their mobile efforts into CRM, per Mr. Hasen.
Bar codes also present an opportunity for CPGs.
?Bar codes provide an ease of use for consumers, less space on advertising and access to terrific content,? NeoMedia?s Ms. Marriott said.
New opportunities for bar codes
To date, the use of bar codes has centered around embedding them in advertisements, weekly circulars or on in-store campaigns.
Ms. Marriott, however, expects to see growing use of bar codes for couponing and on packaging as a way to provide more information than UPC.
In a sign of just how important in-store mobile phone use has become, companies such as The Coca-Cola Co., Kraft Foods, P&G and others recently formed an alliance to work on ways to improve the accuracy of the product information accessed by consumers in-store via mobile devices.
?The companies in the GS1 B2C Alliance recognize that, as mobile shopping continues to grow, a window of opportunity exists to improve consumer confidence in digital product information,? said Gay Whitney, senior vice president of industry engagement for global standards non-profit GS1 US,Lawrenceville, NJ
Mobile apps are another area of opportunity for CPG brands.
MillennialMedia recently ran a campaign on behalf of Kelloggs? Special K brand enabling consumers to download a branded app that was designed to help them lose weight. Users could access menus, track their weight loss and find recipes.
?It was a great way to encourage consumer interaction and leverage the uniquely mobile action of downloading an app,? Ms. McKelvey said.
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