If one were to sum up The Clorox Company's marketing outlook in one word, the word might be optimistic — even bullish — based on a conversation with CMO Eric Reynolds. This is a fairly sunny position to take as traditional packaged goods businesses reach a critical juncture, wrestling with Amazon and e-commerce generally, emergent technology like voice and widespread transparency issues plaguing digital media.
Rather than shying away from these channels, however, Reynolds largely sees rich opportunities for growth and learning. On the heels of Clorox's sixth iConnect conference in San Francisco, an annual event where the brand brings together its executive team with a number of partners, platforms and fellow brands for insights-driven collaboration, he shared his biggest takeaways. Reynolds spoke on how they fit into Clorox's 2020 Strategy, launched in 2013, of delivering long-term, profitable growth and innovation for a portfolio that includes the namesake wipes and bleach, along with products like Glad, Pine-Sol, Brita, Hidden Valley and Burt's Bees.
"The death knell of any company, including CPGs, is being too inwardly focused," he said of the inspiration behind iConnect, which this year had keynote speakers from companies as diverse as Alibaba and NatureBox. "IConnect is a catalyst that we use throughout the year to encourage people to go learn in the wild so that we don't just become too referential. We say we love consumers, but are we really going out to see them? We love technology, do we really know what's going on?"
In a wide-ranging Q&A with Marketing Dive, which has been condensed and edited for readability below, Reynolds made it clear that he sees a significantly bigger opportunity in e-commerce and voice than other CPGs might — Clorox is reportedly in talks with Amazon to sell Alexa audio ads — while also touching on other areas of digital like content and programmatic where the company is expanding:
MARKETING DIVE: The Clorox Company has been big on e-commerce, growing its business with the channel 50% two years ago. How did discussions around e-commerce play into iConnect and how does it fit into the company's strategy more broadly in 2018?
REYNOLDS: The e-commerce content of iConnect is actually going up over time, with some of our key customers coming to the conference like Walmart, Target, Kroger, Amazon and others. Our entire e-commerce team was there. That reflects how we see that more consumers will soon find it not extraordinary to purchase everyday items through digital shelves.
"People say: 'Why would you put many times more resources on e-commerce when it's 5% of sales?' Because we think it's going to be a quarter of sales faster than people think."
CMO, The Clorox Company
People say: 'Ah, that's crazy, you'd never buy toothpaste through Amazon.' But today a lot of people do. Last year, about 5% of our business was e-commerce, and we think it will be about 7-8% this year. All of our research shows that once you get to about 10%, the human behavior patterns underneath it really start to take off, and it could go up to 20-25% of all [sales] volume. The time is now. People say: 'Why would you put many times more resources on e-commerce when it's 5% of sales?' Because we think it's going to be a quarter of sales faster than people think.
It's an ecosystem unto itself that creates all types of new opportunities for marketing. We now plan the Amazon platform and the Walmart.com platform just like we do for CVS, Twitter and Instagram. The maddening thing that's fun but hard is: How do you make it all fit together so it's not just a bunch of stuff in a lot of little places?
Reaching people as e-commerce customers is different than reaching them as retail customers via traditional channels like TV. Clorox has championed digital and social media in the past, but how do you think about those channels at a time when many other CPGs are approaching them with caution?
REYNOLDS: We're only emboldened to keep pushing into what we broadly say is digital. But we're getting to a point now where digital is not enough, we have to break it down into its various components.
We have to follow people where they are, and our brands have to break into their life. We can't interrupt them anymore. You can't muscle your way into human attention, and we're finding people are pretty good at shutting us out. Whether it's social or it's digital, I'd say the question now is the message piece. We're now designing the channel first and then creating stuff for the channel.
This is not a shock, but when I grew up as a marketer, we created a 30-second TV ad and then broke that up into different pieces to push it out to social. Now we create content that's culturally-relevant for social that's entirely different than TV. That's a really important and profound development in our industry — a channel-first message has to be accommodated to the people and what kind of mode they're in at the time.
In terms of some of the more exciting new technology platforms to emerge along with the rise in e-commerce, how is Clorox working with voice?
REYNOLDS: Like all of my contemporaries, we're looking at voice very clearly. [Amazon] Alexa's not going to read you 18 options for disinfecting wipes — she's going to read you maybe two or three, and we feel like we have a really good shot if we earn peoples' right to their business.
"People predict the end of brands: 'Oh, it's not a visual medium, you're dead.' I like my odds just fine."
CMO, The Clorox Company
We have a great Amazon team, we have a great Google team, and we are sitting right alongside their voice teams. In fact, I was just at CES meeting with their entire voice teams, the CIO, me and the chief sales officer were all there because we have major projects with them on voice. We're using each other to experiment with how voice can be used on things like Glad trash bags and working with Google on how we can think about search.
Consumer behavior will start to be adopted quite quickly. People say it will be years before voice ordering, and I'm like really? It's really easy. On everyday items, people want the cognitive load to drop. If you say, 'fine, give me a trash bag — what did I order last time? — give me that.' That's not time travel stuff, and we have to make sure we're ready for it.
People predict the end of brands: 'Oh, it's not a visual medium, you're dead.' I like my odds just fine competing over voice as long we let consumer behavior drive the choice and the people who own the voice interface don't disintermediate me with something else. And I don't think it's in Amazon's best interest, as a rational actor, to start supplanting people's choices.
Looking at digital strategies, programmatic — something Clorox tripled spending on three years ago — has also been getting a lot of attention, especially in regards to issues muddying the space. How is Clorox thinking about it given those headwinds?
REYNOLDS: It's less the question of 'do we believe programmatic?' It's more about the quality of programmatic. From 2015, we've gotten materially better with it largely because our data strategies that fuel it have become substantially more refined. We have a more informed notion of how much targeting is required by certain types of categories. When can you get over-targeted or under-targeted?
We still believe in the fundamental promise of programmatic, and at the same time, the publishers and the platforms are getting better. They're cleaning up their act and the Wild West days are starting to even out and move into adolescence. It's a timing issue. I don't see programmatic fundamentally not being a major player in the landscape as the tech and all the actors mature.
It's not a place for the faint of heart or the ill-informed. You could lose a lot of money in programmatic by just believing in the promise and letting the machine run. We've learned that extreme vigilance on every little piece of the supply chain is required. People who run into trouble on programmatic don't necessarily appreciate the nuance that can greatly affect the outcome, and then they bang on programmatic when they really should be looking at improving it.
The linchpin tying all of these different pieces together from a marketing perspective is the creative strategy. Clorox debuted its "Clean Matters" campaign last September with a focus on unscripted moments with real people. What does the creative approach look like in 2018?
REYNOLDS: We're on a major campaign to do two things: one on the 'what.' We keep saying humanity, but we want to bring real life into our brands. We don't want to create a utopian vision of where the brand lives, and then people have to live in another life. People need to look at our brands and say, 'at some level they get me, I can see myself and my life in that brand.' That's really important. It's not sufficient for the brand to win but it's the right first step.
"For me as a CMO, it's great but it's terrifying because the costs of producing all that content are going up."
CMO, The Clorox Company
The other part is that our multi-year journey to keep raising the bar on what is great creative has to keep going up. We have some new external agencies, we're revamping our internal agency quite significantly. The big themes are, let's make sure our brands speak in a real voice, not that fake CPG voice we were famous for for decades. Let's make sure the creativity and the content are aligned for that moment. Make something just for Instagram, don't just repurpose stuff. For me as a CMO, it's great but it's terrifying because the costs of producing all that content are going up. I have to solve that problem another way because I guarantee you and guarantee us that we will not win unless we do it that way.
IConnect is in many ways a microcosm of what we're trying to do for the whole organization. It's the fact that we can get all of our partners together and everyone from around the company. This is the essence of what our challenge is today — creating an enormous rich network to solve these marketing problems. Sitting in an office tower in Oakland, CA, with your brand team just trying to bang it out is not the way to run anymore.