Packaged goods marketers have largely stayed the course with their marketing spending despite a tumultuous period mired in rising inflation, intense supply chain pressures and labor shortages. The steady stream of media dollars has extended a run of innovation and improved efficiency for the category, with brands turning to emergent tech like artificial intelligence and tactics like creator-driven gaming content to engage consumers.
Part of the buoyancy is simply winning brands doubling down on what's working in an era that's put a premium on digital strategy and e-commerce. But elsewhere, the industry is responding to increasingly critical mandates that don't carry easy solutions: What will CPGs do once third-party cookies are deprecated in 2023? How does a traditionally stodgy category reach young people who are averse to advertising — as well as the tropes it's reinforced? How can a business predicated on disposable products be sustainable?
In the report below, Marketing Dive examines:
Procter & Gamble's ideas about how to put digital measurement challenges to bed
How marketers like J.M. Smucker are reinventing their messaging to center on culture
Mondelez leveraging empathy to make personalized marketing that sidesteps the creepy factor
With uncertainty and disruption continuing to be a guiding theme heading into 2022, this content can serve as a reference point for understanding and reacting to new obstacles in the months ahead.
How Mondelez deploys empathy to sidestep personalized marketing's 'creepy chasm'
At Advertising Week, Global Vice President of Consumer Experience Jon Halvorson emphasized that efficiency is driven by smarter creative and a simpler media plan.
By: Peter Adams• Published Oct. 22, 2021
The push-pull between achieving scale while delivering ads that are more personalized and relevant to consumers has long dogged packaged good marketers that oversee up to dozens of brands. Procter & Gamble in 2017 famously pulled back on targeted Facebook ads, believing them to be an ineffective tactic even as messages were informed by more granular behaviors.
Four years later, the category still contends with many of the same headaches while also grappling with the deprecation of key ways of keeping tabs on consumers online, namely third-party cookies. At Mondelez, executives have implemented a strategy that looks to evolve past the idea of "personalization at scale" by narrowing in on the concept of empathy — an increasingly common theme in the sector that competitors, including PepsiCo, have also endorsed.
"If we were going to ultimately go from being a $25 billion company to being a $50 billion company, marketing was going to have to pull a lot of weight," Jon Halvorson, global vice president of consumer experience at Mondelez International, said during an Advertising Week 2021 panel moderated by Innovid.
"When we looked at ourselves, we were big on mass reach. We targeted everyone who had a mouth, and we showed everyone the exact same message," he added. "When we really reflect on that, that doesn't make sense. I think every CPG marketer intuitively knows that that doesn't make sense."
In threading a particularly tricky needle, the company has tried to better iron out the purpose of its individual brands without strictly defining that quality around the social or political causes with which purpose is typically associated. Persevering a degree of "human tension," to quote Halvorson, was also viewed as essential to avoid creating a position that's not overly saccharine or manufactured-feeling.
"Not every brand purpose needs to be to save the ocean ... When you look at Oreo, it's about playful connections, when you look at Cadbury it's in generosity," Halvorson said. "Our best brands — Oreo, Cadbury, Ritz Crackers — they know who they are now, and you just see it continually work and you see it in the creative support, you see it in the ROI and then ultimately [sales]."
And Mondelez sales have been strong throughout the pandemic, up 12.4% year-on-year in 2021's second quarter to $6.6 billion. At a time when more of the industry is shifting focus to performance-driven media and utilitarian messaging, the executive's comments also affirmed the power of smart creative execution and brand-building.
"One way to drive efficiency is actually the creative excellence," Halvorson said before illustrating by example. He said that if Ritz and Oreo activated on the same platform, targeting the same audiences in the same time frames, Oreo would ultimately pay lower rates due to its "higher creative excellence."
"Creative is one of my greatest levers to lower my costs," said Halvorson. "As I personalize and I increase my relevance to consumers, I am rewarded with lower media costs over time."
Keep it simple
Mondelez's larger "empathy at scale" project technically launched at the tail end of 2020, but had the groundwork laid over years, speaking to the often slow turn of gears at sprawling international marketers.
"I'd like to think that it takes one year to get everything down one level of the organization," Halvorson said.
The executive stated Mondelez oversees 852 brand-country combinations, with roughly nine brands making up 50% of sales and then another 45 accounting for the other half. In terms of marketing, those products invariably produce high volumes of assets, which has put a bigger mandate on automation tools that can help speed up the execution process.
"You don't have time to review 1,000 assets, you don't have time to version all of it out," said Halvorson, before dinging what he viewed as shiny-toy solutions.
"In all of your marketing models, you are allowed to have a certain level of complexity somewhere; you cannot have complexity everywhere, otherwise you will be average everywhere."
Global Vice President of Consumer Experience, Mondelez
"Where are we going to get the unlock from it?" he added. "It's not going to be by mirroring or demographics. It's not going to be from weather, it's not going to be from sports scores. You can do all that, but that's a 20% lift. I want double."
Instead, Mondelez has tried to prioritize media simplicity and a smaller partnership purview, an approach other CPGs have pursued in the quest for greater agility. The Oreo owner had 100 partners in the U.S. alone in 2017, when the seeds of the empathy at scale project started to be planted. Today, it has fewer than 100 partners globally, according to Halvorson, including just five creative agencies consolidated under WPP and Publicis.
"Simplifying what we do in media allows us to do the complexity elsewhere,” said Halvorson, noting that he's averse to the idea of a 360-degree campaign, believing it quickly leads to diminishing returns.
"In all of your marketing models, you are allowed to have a certain level of complexity somewhere; you cannot have complexity everywhere, otherwise you will be average everywhere," he said.
Article top image credit: Permission granted by Mondelez International
P&G's Pritchard calls out Sisyphean challenges around improving measurement
By: Peter Adams• Published Sept. 22, 2021• Updated Sept. 23, 2021
Despite several years of an industry-wide focus on improving measurement and transparency — in digital and elsewhere — the space continues to encounter steep roadblocks that could demand greater collaboration to solve, including among trade organizations, according to Procter & Gamble (P&G) brand chief Marc Pritchard, who was a keynote speaker at the Advertising Research Foundation's (ARF) AudienceXScience virtual conference in September 2021.
Years ago, the need for more accurate and transparent measurement was part of a speech that Pritchard gave in which he issued a stark challenge to digital media vendors: Clean up the supply chain or risk losing the packaged goods giant's dollars. The directive from the Tide and Charmin owner demanded that all publisher partners receive accredited third-party verification from industry watchdog the Media Rating Council (MRC), with P&G also implementing the MRC's Viewability Standard as a minimum requirement across platforms. Praised at the time, the call-to-action was seen as a potential inflection point for digital marketing, as P&G is one of the world's top advertisers by media spend. In 2021, the executive called attention to how little progress has been made on this front.
"The challenges we still have are: How many people are we reaching, how often are we reaching them, how effective is what we reach them with and how efficient is it?" Pritchard said during the ARF talk. "It's remarkable that we still have these same challenges."
ARF CEO and President Scott McDonald, who moderated the discussion, agreed with Pritchard's statement, painting the ongoing measurement obstacles facing marketers as a Sisyphean battle. Part of the problem is how quickly consumer habits are changing, with media consumption more fragmented than ever amid the rise of channels like streaming and connected TV. But increasingly, foundational measurements put in place years ago are also being called into question. Nielsen recently lost its MRC accreditation for television ratings, and its Digital Ad Ratings are still under review — a decision that's set off a mad scramble from competitors including Comscore.
MRC's moves on Nielsen were supported by the 4A's, a trade group representing agencies, as well as the Association of National Advertisers (ANA), a marketer-focused confab which Pritchard chairs. The ANA in a news release outlined its media measurement principles, advising brands to back a system that is "objective, independent, transparent, neutral, and third-party verified."
Pritchard, who did not explicitly reference Nielsen or other measurement firms, echoed some of the ANA's comments and shared his hope that collective industry action can address ongoing troubles with measurement versus relying on a single governing body to set the agenda.
"This is about all boats rising," Pritchard said. "We don't view this as a zero-sum game. We view this as an opportunity to understand the ecosystem more holistically across every platform.
"I believe a cross-platform measurement requires a cross-industry effort, and that needs to be [from] industry associations," he added.
Since 2019, the ANA has been devising a cross-media measurement (CMM) solution designed to fit with MRC guidelines. CMM has the support of the 4A's, which is on the project's steering committee, and the World Federation of Advertisers, while the ANA is still working with other entities like the Video Advertising Bureau (VAB), Open AP — a media consortium centered on audience buying — and TV networks to iron out the details. The trade group is actively encouraging the VAB to join the steering committee as well.
"It is imperative that CMM becomes the paramount objective of the measurement community," the ANA wrote in its announcement. "ANA believes our industry should channel as much of its resources as possible towards the accomplishment of this goal."
In reinforcing the need for marketers to establish firmer industry-wide priorities, the organization also admitted it's often failed to meet its benchmarks when it comes to measurement.
"We have had many gatherings in the past on this topic and most, if not all, have fallen short of their stated objectives," it said. "Making meaningful progress now requires a substantial commitment for real change accompanied by a significant pledge of resources to overcome the material barriers that have impeded past progress across the measurement ecosystem."
During the ARF discussion, Pritchard defined his own goals with measurement and what keeps him up at night. Guiding his thinking are three key principles: objectivity — a quality underpinned by independent, third-party accredited verification, similar to what the MRC does; transparency, embodied by a clear understanding of shared rules; and completion, or striving for a full understanding of consumer behavior across platforms.
"It needs to be across platforms because the consumer doesn't experience our brands and our communication in just one particular platform or medium. They experience it across multiple," Pritchard said. "The experience on a digital video is different than the experience on a TV show."
Even as Pritchard emphasized the need for a greater coming-together in realizing a more holistic view of such behaviors, he indicated that marketers like P&G will need to play an outsized role in tackling measurement frustrations. A lot of that outlook boils down to a raw numbers game.
"It really is incumbent upon marketers to lead the way in terms of measurement, because at the end of the day the marketers are the entity in this industry that has the money, that is creating the offerings for consumers and then communicating those," Pritchard said. "As the buyers, we should ensure that we get accurate, objective, transparent, accredited measurement so we know we're getting what we paid for."
Preserving the value exchange
Pritchard's comments aligned with other initiatives that have tried to push more leverage to the buyer's end of the market. P&G in 2020 eschewed traditional upfronts negotiations to instead broker direct advertising deals with networks, a change spurred, at least in part, by uncertainty stemming from the coronavirus pandemic. The move was another sign of the power balance shift occurring as COVID-19 and the acceleration of trends like cord-cutting deprecate the influence of traditional media gatekeepers.
Of course, greater media fragmentation presents fresh challenges regarding both measurement and data privacy. Pritchard during the ARF forum said that first-party data is critical for marketers on the latter front, but suggested many aren't approaching their acquisition strategies with the right mindset.
"Don't come at it from the standpoint of, 'I'm trying to get data.' Come at it from the standpoint of, 'I'm trying to give you value,'" he said. "It's a value exchange."
P&G's broader mandate of achieving mass reach while preserving a degree of precision will face a steep test with the deprecation of third-party cookies in 2023. In terms of alternatives, Pritchard nodded to solutions like Google's Federated Learning of Cohorts (FLoC) as offering an appealing level of granularity while not relying on identification on the personal level that could run afoul of regulations.
"There's a big distinction: It's not one-to-one, it's also not generic adults 18 to 49. But it is more precise," said Pritchard. "It's cohorts, so the FLoCs, those kinds of things — those enable the ability to get that [reach]."
C-suiters and data-driven executives: Want your business to become more customer-centric, data-driven, and profitable? Your peers are suggesting that maybe it's time to rethink how to use customer data throughout your organization.
That was the message of CMOs and other executives from brands as diverse as AB InBev, Delta Air Lines, Stellantis, Kellogg's, Conde Nast, and Warner Music Group. In the recent Adweek-Treasure Data Digital Shift conference, they revealed how they use customer data to help their businesses accelerate digital transformation and handle disruption—both from innovative competitors and COVID-19. Many of them also explained how introducing customer data platforms (CDPs) has dramatically changed both how fast and how well they can find new customers and personalize each one's customer experience, often in real time.
“Our ability to mine our data and find new insights has really quickened our time to market,” says Karen Donovan, senior manager of the Stellantis N.V. customer data platform program. Stellantis is using its CDP to ingest data from many different sources, build detailed profiles of each customer called “single customer views” (SCVs), and use that data to understand customer behavior, acquire new customers, and shape those important moments when customers are most likely to engage.
“We've been amazed at what we've been able to accomplish in about 18 months,” says Donovan. “It's just been phenomenal. It's exciting to see how far we can take the use of our customer data platform, and so far, we haven't hit a limit.”
Customer Data as a Way to Thrive During Disruption
Most Digital Shift speakers say that customer data has been critical in helping them deal with the constantly changing needs of their customers.
At Anheuser-Busch InBev, customer data has sped up its previous plans for digital transformation. “We accelerated by several years many of the things that we were working on,” Global VP of MarTech, Ricardo Ortegon explained. “Things like home delivery have accelerated by a factor of three to five times. Consumer data used to be hard for us to get. But commerce and home delivery have become mainstream, so we have more data than we ever had before.”
Being awash in customer data is a new opportunity for the global CPG company, and just having that data has changed the culture and operations of AB InBev.
“Now, creating 100 variants of a communication of an app is mainstream. Things that used to be experimental are now part of our day-to-day operations,” Ortegon says.
Digital Transformation Beyond Marketing Functions
And in an accelerating trend, the use of CDPs and customer data—previously mainly found in marketing departments—is revolutionizing other departments as well, including sales, customer support, CX, supply-chain management, and the C-suite.
The problem of improving customer engagement is dispersed throughout organizations, says Phil Sager, a partner at Bain & Company, which makes customer data even more critical.
“More people are driving the customer experience without having direct front line interaction with the customers,” Sager told the Digital Shift audience. “How do we get those employees to understand their impact? We need to connect those employees to our customers in a way we've never done before.”
Making those connections is daunting, and requires AI and sophisticated martech such as CDPs, to present customer engagement workers with the data they need to efficiently engage and anticipate customer needs. But CDPs handle more than mechanics; they help companies create long-lasting brand loyalty and engagement, which Jamison Antoine, VP Global Customer Experience at Warner Music Group, says is a critical growth factor.
“It's not just about 'the merch,'” Antoine said. “It's about the moments and memories behind that merch.”
Top Marketers Are Leading the Charge to Customer-centricity
The growing importance of customer data applied throughout organizations has put marketers in a new position: driver of customer-centricity throughout the organization, says Biljana Cvetanovski, partner at McKinsey.
“What we've seen is the CMO is acting as a unifier who is rallying the organization around a purpose: asking, 'How is what I'm doing today feeding into the customer experience?' We see marketing working shoulder to shoulder with the wider organization,” Cvetanovski said in her panel titled “The Growth Triple Play: Creativity, Analytics, and Purpose.”
Article top image credit: Ezra Bailey via Getty Images
How Mars measures the emotional impact of video ads using AI tech
A proprietary tool tracks eye and mouth movements so the company behind M&M's and Skittles can gauge whether a campaign is resonating or needs to be tweaked.
By: Peter Adams• Published Sept. 1, 2021
Everyone's seen them: The online polls asking simple questions like "How did you feel about this ad?" or "Does this ad make you more likely to purchase?" These surveys, a staple part of what's known as ad pretesting, can be instructive for marketers, but sometimes don't paint the whole picture when it comes to gauging the actual impact of a video ad on business outcomes.
Mars in recent months has experimented with a new piece of technology that factors in typical digital measurement techniques while putting a larger focus on the emotional response of the viewer as they're watching the ad. The latter tactic is something the company behind Mars Petcare, Mars Food and Mars Wrigley views as increasingly essential in an attention-strapped world where ad lengths are getting shorter, leaving little time to tell a well-rounded brand narrative. It's a strategy that also looks to differentiate the packaged goods giant from competitors that are similarly pushing to improve media efficiency and data-driven operations.
"In 99% of cases, the traditional consumer watches an ad and then is asked some form of question," said Sorin Patilinet, global insights director at Mars. "We don't believe in that. We have data to prove that the correlation between those kinds of studies, which are declarative studies, and the in-market performance of that ad is not that good."
Launched in July 2020 after a five-year gestation process, the Agile Creative Expertise (ACE) solution has already been used to analyze more than 450 pieces of content. Mars aims for it to surpass 1,000 pieces in 2021, a spokesperson said. The tool is predominantly focused on video, encompassing everything from six-second ads and social media stories to longer TV-like formats.
"Video is still the best format for us to build brands," said Patilinet, a 10-year company veteran. "We believe in building brands through emotions, and it's very difficult to elicit emotions in static formats."
ACE measures traditional digital behaviors — skip rates, clickthrough rates and view-through rates — but also the facial expressions of people watching a video using an artificial intelligence (AI) algorithm. The AI tech, which is consent-based as a privacy consideration, can recognize up to 150 different emotions. It does not constitute facial recognition, according to Patilinet, because it does not identify faces at the individual level. Instead, it tracks the movement of eyes and lips, codifies them into a certain sentiment, i.e. "happy" or "sad," and then aggregates that data to paint a picture of the overall response to a video. Those cues then tell Mars whether or not a given campaign is working, needs to be edited or should be dropped altogether.
"In general, our criteria of success are an increase in emotion," said Patilinet. "We want to see the positive emotions going up during the ad."
Mars relies on a variety of outside partners to power ACE. Nielsen works on larger in-lab assessments while Realeyes assists with mobile measurement. Google and Medicom are also involved in the initiative, providing benchmarks for the solution. But Patilinet's team ultimately turns external results into a proprietary Mars number that's then interpreted, turned into a deck and shared internally to see which ads need tweaking.
"Basically all of the measurement is done outside," said Patilinet. "What we have in-house is the relationship with sales."
As agility has remained one of the biggest marketing buzzwords of the pandemic, the ability to adjust messaging on the fly can be beneficial. But ACE is part of a larger transformation at Mars where the marketer is looking to draw a clearer link between brand messages and sales using its own technology. In July 2021, Mars Wrigley rolled out an Accelerating Impulse Moments (AIM) platform that applies data and test-and-learn findings to drive impulse purchases at retailers.
"Our gold standard is using sales data. If you run any test using sales data, you're talking about weeks if not months until you have the results," Patilinet said of ACE. "Here, we're talking days."
Patilinet hopes that ACE will eventually be able to produce real-time feedback through dynamic or automated assessments. Faster turnarounds come as more of Mars' business shifts to e-commerce and direct-to-consumer channels. While online sales in certain categories remain small, they're expected to continue to expand as shopping habits driven by COVID-19 stick around. Other offerings, especially petcare, have seen explosive e-commerce growth over the pandemic. In April 2021, Mars Petcare hired Jessica Hauff as its first general manager of e-commerce and appointed Travis Reaves as vice president of strategy and growth transformation.
"With e-commerce growing, research will be easier," said Patilinet. "But it has to grow significantly. The sample has to be big enough in order to make that assessment."
At the same time, traditional media formats — think anthemic TV spots — that helped turn Mars brands like M&M's and Skittles into cultural icons are waning. Cord-cutting has rapidly accelerated while consumer patience for longer commercials thins amid a proliferation of ad-free streaming options.
Mars was among the first companies to air six-second TV ads several years ago, and has continued to experiment with nascent video offerings that recognize the need to provide an immediate hook for viewers. As ironing out those tactics proves to be a work in progress, ACE could be a linchpin in ensuring the message connects.
"You can create stories that elicit emotions in longer formats, but we know that people are skipping those formats," Patilinet said. "They're not very happy to watch 30 seconds of advertising. That's our biggest challenge that we're trying to solve."
Article top image credit: Permission granted by Mars, Incorporated
CPG brands ditch domestic tropes for culture-led marketing. Will it pay off?
Fewer parents and higher spending power among Gen Z could see historically stodgy brands move away from ads targeting mom and dad.
By: Peter Adams• Published Oct. 5, 2021
For decades, peanut butter brand Jif ran a tagline that helped enshrine it as a household name: "Choosy mothers choose Jif." The memorable phrase, which eventually swapped "mothers" for "moms," sharpened Jif's edge against rivals Skippy and Peter Pan to place it as No. 1 in the category, where it remains to this day. By most metrics, it was an effective positioning for the spread.
Jif's marketing looks markedly different in 2021 than 2001, and in ways that speak to how pockets of the packaged goods sector are dropping a focus on domesticity for strategies more tapped into consumer culture. That pivot has been informed by technological advances, including better targeting and insights, but also a changing shopper base that is potentially averse to being pigeonholed as homemakers.
For many companies, creating cultural relevance outside the home could be an uphill battle. CPGs might need to put in extra legwork to successfully court even choosier young groups like Gen Z, especially as loyalty becomes harder to hold onto amid a boom for private label, direct-to-consumer and e-commerce brands. A study by market research consultancy Reach3 Insights found 45% of surveyed U.S. consumers switched their preferred brands across categories during the pandemic, and 85% plan to stick with their new choices. But that same fickleness is emblematic of why CPGs should consider a more culturally led approach as they try to make an impression that carries over to the checkout line or final click.
"Brand loyalty is really something that is, in fast-moving consumer goods, more of an aspiration than a reality," said Matt Kleinschmit, founder and CEO of Reach3. "As a result of that, modern marketers in the CPG world have latched on to this idea of trying to establish emotional connections with consumers.
"If there's an emotional connection, that will often trump functional benefits," he added. "Brands that can execute that in a smart way are winning."
An ad campaign Jif rolled out in August 2021 stars the rapper Ludacris as he adapts his fast-flowing style to that of modern "mumble rap," whose stars have been criticized by old-school fans. The concept was informed by a social listening insight that some up-and-comers are painted by rap's legacy gatekeepers as sounding like they have peanut butter on the roof of their mouths. In the "Lil Jif Project" spots, which seek to bridge the genre divide, there's nary a reference to anyone's mom, though one of Ludacris' daughters does make a cameo to offer the song a co-sign from the younger generation.
Jif for years was already putting less emphasis on its "Choosy moms" positioning, but made a more radical shift after parent J.M. Smucker tapped Publicis to freshen up the brand's portfolio in 2018. Starting in 2020, Jif began to seek out ways to intersect more with culture, including through a campaign that played on debates over the pronunciation of the Gif image format, heralding a new era for the peanut butter marketer's identity under the "That Jif'ing Good" platform.
"What CPG has done — and it's an important step — is walk away from thinking all of their ads need to be holding a mirror up to their audience: 'This is you cleaning the counter, this you making a cup of coffee.' That doesn't make you feel anything for the brand," said Erica Roberts, chief creative officer of Publicis New York and an architect of the Jif campaign. "You don't start to create any deeper connection points or memory structures for that matter."
Other CPGs are pursuing similar refreshes. Kraft Heinz's Oscar Mayer label in 2020 introduced a brand overhaul in the first major work from creative agency of record Johannes Leonardo. The "Keep It Oscar" campaign eschews traditional storytelling in favor of Dadaist absurdity, with videos that depict toddlers shooting lasers from their eyes and bacon taking on a life of its own.
On the media front, the 138-year-old purveyor of hot dogs and lunch meats is experimenting with formats, including GIFs and its first five-second TV ads, that recognize a more attention-strapped consumer economy that's attuned to a constant scroll of social media. Recent extensions speak to a larger eye on Gen Z and millennials as well: Oscar Mayer in 2021 partnered with Lyft to convert its signature Wienermobile into a ride-sharing vehicle and dropped a capsule collection of "Street Meat" streetwear that was sold through hot dog stands.
The pop-art creative plays come on the tails of sales windfall for Kraft Heinz, which benefited from the pandemic's bump in at-home cooking. Oscar Mayer previously had been something of an albatross for the company, meaning "Keep It Oscar" could serve as a key test of whether the more culture-oriented approach pays off in relation to the bottom line.
But CPGs don't typically foster the same amount of enthusiasm as other categories, like apparel or technology. It's harder for consumers to get worked up about oatmeal or deodorant to the degree they do a new iPhone drop. Still, drawing a clearer connection between a CPG brand and trending discussions — whether they be around a celebrity, major event or piece of pop culture — could become more significant for a population that's constantly plugged in.
"With fast-moving consumer goods, the thought is you use it and dispose of it. They don't necessarily have the same type of cache that some of these other brands maybe would," Kleinschmit said.
"I would actually argue that that's even more of the reason why a lot of these modern marketers that work for these large CPGs are trying to bring that idea of cultural relevance to the forefront," he said. "Without that cultural relevance, they're one of dozens of other products in an increasingly crowded virtual e-commerce shelf."
Another factor that could motivate CPGs' move toward more culture-centric marketing is the pressure to address a history of propping up normative domestic roles. Images of a housewife in an apron cooking and cleaning were woven into the fabric of U.S. consumer culture with the help of ads devised by largely male agencies and marketing teams of the "Mad Men" era.
"There's almost a sense of responsibility to redefine how we show up and to consciously refuse to perpetuate those stereotypes."
Chief creative officer, Publicis New York
Some brands have tried to tackle the touchy subject head-on. Budweiser in 2019 reimagined sexist ads from the '50s and '60s to be more empowering in honor of International Women's Day. While the direct approach isn't common, it might benefit the category to reassess where and how its products are portrayed.
"CPG probably has the most reason to kind of walk away from that narrow targeting to moms because they've been so responsible for perpetuating this antiquated division of labor," Publicis' Roberts said. "There's almost a sense of responsibility to redefine how we show up and to consciously refuse to perpetuate those stereotypes."
Many women today would rather be targeted based on their interests or hobbies rather than as parents, according to experts. That's especially true of younger groups like Gen Z and millennials that put a premium on social values. Disruptors from the DTC world and other categories have made dents in legacy businesses not only through more digitally savvy sales models, but also a clearer sense of brand purpose than their legacy peers.
"If you talk to a mom, there's this very responsible, functional message. You want to choose something good because you're buying it for your kid," said Jennifer Baldwin, executive vice president and strategic planning director at Publicis. "That as a point of difference can erode over time. That's happening, really, across all packaged goods. There are more entrants coming into the category as private label becomes more appealing."
That's not to say moms aren't part of the picture for CPGs. Women, generally, are still estimated to make between 70-80% of household purchases. A recent Kearney report adds further shades of nuance to the conversation. The consultancy's poll of 1,000 women found 60% valued a "female-focused approach" when being marketed to for household products, but 42% stated that women didn't have gender-specific needs. Nearly a third worried that female-focused products could create or reinforce stereotypes.
"If you really look at demographic data, parents are declining. There are fewer households with kids today. Year-over-year, that's going down," Baldwin said. "That meant that after this 50-plus year focus on parents, [Jif] was losing relevance with younger consumers."
Changing demographics create opportunities for CPGs to reach new and even unexpected audiences. Jif, for example, is trying to recognize decision-makers like college students who are buying their own groceries for the first time or fitness enthusiasts who value peanut butter as a protein source. That thinking is reflected in influencer partnerships and larger investments in emerging social media platforms.
"We continue to go back to TikTok because we've found such a diverse audience there and a diverse group of influencers," said Cadence Ely-Mooney, a senior account supervisor at MSL, another Publicis unit that works on the Smucker account. "Not only are we looking at diversification across platforms, but in terms of people we're partnering with ... This kind of expansion has allowed us to be considered more along the lines of a lifestyle brand."
Jif's audience in the 18 to 34 range is 67.25% female, according to an independent analysis Helixa conducted for Marketing Dive, and expresses a 3.68-times affinity toward Ludacris versus the 1.00 national average index. That suggests the "Lil Jif Project" campaign could resonate, even as it's distinctive from the brand's past marketing.
"If you talk to a mom, there's this very responsible, functional message ... That as a point of difference can erode over time."
EVP, strategic planning director, Publicis
In trying to thread the needle between ads that connect while not reading as tone-deaf, CPGs have more tools in their kit than before. An explosion of interest for connected TV and streaming during the pandemic — along with the continued movement of media dollars to digital and social as the ad market continues to rebound — is leading to an influx of solutions that open a greater degree of granularity than what linear media can offer. One takeaway is clear: broad, demographic-based targeting is out of vogue.
"It's a larger trend just in general, approaching marketing and messaging to people via interests," Roberts said. "Even the way we do our segmentation work is much more psychographic now and interest-based."
Marketing service providers similarly are trying to meet the cultural moment. Taco Bell, while not a CPG, named Cashmere its first culture agency of record in 2021 to deepen its connection to areas like sports, fashion, gaming and music. That's a tack CPGs could follow as they look to freshen up their image and engage younger consumers who are more skeptical than older cohorts and willing to call out brands that fail to pass the authenticity sniff test.
"Moving forward, not only is it going to be important from a cultural perspective to say what and who to align yourself to, it's going to be equally important for these brands to know what not to say," Kleinschmit said. "For brands and products that are sort of out of alignment … all of a sudden that brand turns into persona non grata.
"There's a whole host of these types of fickle pop culture preferences that brands need to continually be on top of," he added.
Article top image credit: Permission granted by Jif
How PepsiCo is harnessing data to help retailers increase sales
The food and beverage giant's Pepviz platform uses analytics, data science and other tools to ensure a store is carrying the right product mix and optimizing shelf space.
By: Christopher Doering• Published Oct. 4, 2021
As the pandemic accelerates changes in how people shop and what they consume, PepsiCo is harnessing data to help retailers boost sales while increasing demand for its own portfolio of beverages and snacks.
The maker of Cheetos and Mtn Dew in October 2021 launched Pepviz, a platform that offers retailers analytics, data science and other tools to attract new shoppers, drive store trips and boost loyalty, encourage impulse buys, improve product mix and increase sales both in store and online. Through Pepviz, the New York-based CPG can harness retail and shopper data to better cater to the needs of the consumer that sometimes can vary from store to store. The collection of data also can play a major role in helping retailers optimize their limited shelf space and solve other problems.
PepsiCo is considering how the company and the retailers it works with can move forward after the pandemic, said Kate Garner, a senior vice president at the company.
"We've seen a lot of agility, new questions for our retailers and for ourselves in terms of how to predict and capture growth with significant change in the marketplace," she said.
The food landscape is being hit on a number of fronts, leaving CPGs to look for ways to become more nimble and responsive to the needs of both shoppers and retailers. Consumers are not only looking to eat healthier but they are also purchasing more of their groceries online, a pair of trends that have intensified during the ongoing pandemic.
At the same time, food makers and retailers are struggling to answer what the future will look like — how much will people continue to eat at home after COVID-19, for example — leaving them eager for ways to predict where the market is going and how they can win. Increasingly, data is the answer.
Pepviz is currently being used by a "handful of customers" that include both small and large retailers, according to Garner, though she declined to name the companies. Still, she said retailers' desire to save time and money — and the multitude of questions they must answer in a fast-moving environment — will likely spur more of them to use the platform.
"I do see it as a standard course of business," she said. "PepsiCo is a believer in the power of data and the ability for it to help us identify growth areas."
PepsiCo has been aggressively building up its database for the last five years, and regularly uses data in working with retailers. But Pepviz takes that a step further by zeroing in on shopper behavior on a hyperlocal scale, not only telling a retailer what customers are buying at its store, but also what they're buying at other stores in the area. This data helps retailers understand how to increase basket sizes.
For example, PepsiCo noted how small-format retailers with limited shelf space typically carry the same product assortment. Pepviz took shopper buying patterns and behavior data collected from two national retailers to help a pair of convenience stores figure out how to sort their customers into four categories, with each cluster being assigned its own product mix.
About 80% of the items were the same across these categories, but the remaining 20% could be changed to cater to a specific individual. After customizing its assortment, one c-store chain saw sales of its salty snacks grow $4,000 per store annually, while the other rose nearly $1,300.
In another example, a retailer wanted to grow sales in its salty snacks category.The company offered largely the same product assortment, but hadn't given much thought to carrying PepsiCo's better-for-you snacks like baked chips or Bare Snacks. It wasn't sure if its customers were ready. With Pepviz's data, PepsiCo determined which of the retailer's stores could benefit from these healthier offerings to grow sales.
"We were really pushing that you need to think differently about each of these stores and the propensity of that shopper," Garner said. "It was a low risk because we weren't asking them to change things out across their entire footprint. We could grow at a slow pace and really get them to commit and understand the investment."
Article top image credit: Permission granted by PepsiCo
What's next for sustainability in marketing following a year of surprising resilience?
Corporate pledges are increasingly being complemented by more direct ad campaigns as companies like P&G and PepsiCo prioritize the issue.
By: Peter Adams• Published Oct. 14, 2021
Things did not look good for sustainability in marketing at the outset of the coronavirus pandemic. People were panic-buying and pantry-loading en masse, snapping up whatever products were left on the shelf. In the frenzy, loyalty started to slip, while a volatile economy put strains on consumers' wallets that may have impacted their willingness to pay a premium for environmentally conscious brands.
Yet, research indicates that the appetite for sustainability marketed products — a once niche sector that achieved greater mainstream recognition through the mid-to-late-2010s — has remained resilient despite the trials of COVID-19. Such goods outperformed their conventional counterparts across 36 categories in 2020, according to a report conducted between IRI and the NYU Stern Center for Sustainable Business. The vertical overall notched a 0.7 percentage-point increase to reach 16.8% of total purchases in a banner year for CPG sales.
"Sustainability marketed products not only held their own, but actually outgrew CPG as a total," said Randi Kronthal-Sacco, senior scholar of marketing and corporate outreach at the NYU Stern Center for Sustainable Business and an author of the report. "Sustainably marketed products did, in fact, survive the pandemic, and thrive in many instances."
Why is the sector so buoyant despite facing clear challenges? One way of understanding the trend is to break with conventional ways of thinking around CPG. Sustainability marketed products tend to be inelastic and less sensitive to price fluctuations than conventional fast-moving consumer goods, which are currently contending with rising inflation, according to Kronthal-Sacco. It's potentially more instructive to view sustainability labels as acting like luxury industries, where people are willing to shell out more and buy in lower volumes. That's especially true of millennial, upper-income, college-educated and urban cohorts when it comes to sustainability, the IRI and NYU Stern report found — although older age brackets, like baby boomers and Gen Xers, account for the "bulk of sustainable dollars spent."
"Sustainably marketed products did, in fact, survive the pandemic, and thrive in many instances."
Senior scholar of marketing and corporate outreach, NYU Stern Center for Sustainable Business
"Generational differences can be seen in sustainability definitions, attitudes and purchase behaviors," wrote Larry Levin, executive vice president of consumer and shopper marketing at IRI, in the research. "Brands and retailers must be able to optimize packaging, labeling, websites and messaging to reach sustainably focused audiences most effectively."
At the same time, demand for sustainable goods is climbing as consumers seek out everyday ways of lowering their impact on the environment. Summer months increasingly bring record heat waves, raging wildfires and intense flooding, making the disastrous effects of climate change harder to ignore. Brands, too, are feeling the pressure to take bigger steps to address the crisis — which is evident in the deluge of pledges to rethink everything from packaging design to agricultural practices — and could make their solutions a larger part of consumer-facing marketing as mandates specific to the pandemic continue to recede.
"People being impacted by climate personally and climate change in the broad sense has definitely risen to one of the top problems that individuals recognize," said Kronthal-Sacco. "For that reason, I believe that there has been a large uptick in interest by consumers and a large uptick in interest by manufacturers and retailers to deliver more sustainable supply chains and more sustainable products.
"If they don't, it's kind of adapt or perish," she added.
Educating the population
Marketers with a clear stake in the purpose arena have long made sustainability a part of their messaging to the public. Kronthal-Sacco pointed to Unilever as a continued leader in the CPG space. But the scale and number of initiatives have felt more voluminous in a grim period for climate forecasting.
"I do think [sustainability] is the next agenda choice for CPG and retailers," said Kronthal-Sacco.
"As we are preparing the 2022 report, we find an increasing number of new products incorporating sustainability claims, as sustainability becomes table stakes in a number of categories," she wrote in a follow-up email.
That's true of both product design and larger corporate strategies. Mars, in the fall of 2021, announced it would try to achieve net-zero greenhouse gas emissions across its value chain by 2050, a target derived from the goals of the Paris climate agreement. The Skittles marketer previously stated it would shoot for net-zero emissions in its direct operations by 2040. PepsiCo, a competitor, unveiled a wide-ranging pep+ initiative around the same time that includes pledges to reach net-zero emissions by 2040 and become net water positive by 2030, along with cutting use of virgin plastic in its portfolio.
Marketing is an increasingly important part of the formula. The pep+ announcement was complemented by a Pepsi campaign that enlisted NFL stars — the beverage is a league sponsor — to explain the benefits of recycling to football fans. The American Beverage Association, an industry group that represents The Coca-Cola Company, PepsiCo and Keurig Dr Pepper, is currently promoting an "Every Bottle Back" platform in conjunction with World Wildlife Fund, The Recycling Partnership and Closed Loop Partners that tries to educate the public on the value of recyclables with videos on platforms like Twitter.
"It's quite significant," Kronthal-Sacco said of the volume of such sustainability campaigns. "Particularly in social media, you're seeing what had been a dearth of communication become an abundance of communication around sustainability and how brands are incorporating a sustainable agenda into their offerings. I expect that to explode in the coming year."
Still, other marketers are hesitant to put sustainability front-and-center in their messaging, even as they adopt more sustainable practices in their operations. Kronthal-Sacco suggested the uncertainty could stem from a fear of alienating certain consumer groups — climate change remains a highly politicized issue — or due to near-term supply chain disruptions that have roiled planning.
"I think they are just trying to get product out," said Kronthal-Sacco. "I don't know what the conversation will be."
Looking past the short-term obstacles, it's harder to ignore the business case for sustainability. Valuable young demographics care more deeply about fighting climate change, and will reject brands they view as out of line with their social values. Nearly a third of Gen Zers and 28% of millennials have taken an action, like donating or volunteering, to tackle climate change, according to Pew Research.
"You have the younger users who are differentially concerned and will age and have greater purchasing power," Kronthal-Sacco said. "They're also, from a manufacturer and retailer standpoint, the future consumer.
"Both those dynamics happening, I think, will catalyze the sustainable agenda in CPG," Kronthal-Sacco added.
Sustainability-marketed products have also adapted well to channels that are climbing in significance for marketers. In 2020, the e-commerce share for sustainability-marketed products among CPGs grew 65% versus that of 2019, seven points higher than the gains notched by conventionally marketed counterparts, IRI and NYU Stern found. Online shopping presents opportunities to offer more detail on why a brand is sustainable as compared to the more limited space on physical packaging and shopper marketing placements around crowded store shelves.
"Even if you're not communicating it on a pack, there's so much real estate to communicate that in their description of the product," Kronthal-Sacco said.
Marketplaces are recognizing that more brands view sustainability as a key differentiator. Amazon, in the fall of 2020, launched a program where products that achieve one or more of 19 different sustainability certifications will receive a special label on their page. Sustainability-marketed products performed better online than in store in 75% of the categories examined by IRI and NYU Stern.
"Again, it's not just for consumers who are interested in ethical consumption, but also for the manufacturers and retailers," Kronthal-Sacco said of the sustainable agenda. "The retailers, in general, are quite concerned and have seen increased demand by consumers to help them pick a more sustainable choice."
Article top image credit: Retrieved from Tide on April 01, 2021
How Hot Pockets joined Gen Z gamer culture through Twitch Bits
A couponing push drove six times higher conversion rates than past efforts, helping the brand gain relevancy with key young cohorts.
By: Peter Adams• Published Oct. 25, 2021
To some observers, Hot Pockets and video games go hand-in-hand. A 2006 episode of "South Park" depicts the bratty character Cartman demanding the microwavable turnovers from his mom so as not to interrupt a marathon session playing World of Warcraft with his friends.
In reality, the Nestlé-owned product had lost some of its sway with younger cohorts in recent years, particularly up-and-coming Gen Z males who might not even have been born when the now-legendary "South Park" installment first aired. As gaming has evolved from a niche hobby to one of the most dominant drivers of pop culture, that resonance gap felt more egregious, Nestlé executives said during a recent Advertising Week session. In response, Hot Pockets shifted gears to focus more on the types of creators who hold otherwise ad-averse gaming fans at rapt attention.
"We knew how mom looked at the product — we had decades worth of information to do that — but again, we lost favor with the growing younger generation," said Bryan Waddell, head of influencer, gaming and esports at Nestlé, during the panel with agency partner Reach Agency. "Kind of the 'a-ha' for a lot of people was, we didn't have that brand staying power with millennials like we thought."
How does a brand engage a group that's essential to its business, but that it hasn't directly marketed to before? Hot Pockets and Reach Agency together devised a solution that involved tying a national couponing program to Twitch "Bits," virtual tips that viewers can gift their favorite creators on the Amazon-owned streaming platform to support their content and potentially receive a custom shout-out. Bits draw in big paydays for creators, while Twitch's position as the de-facto platform to watch people play games was shored up by the pandemic, creating an opportune moment for Hot Pockets to experiment with something new.
"We wanted to go big," Waddell said. "We wanted to know — or we wanted to prove — that gamers everywhere, Gen Z males everywhere, are receptive to these types of activations."
Pieces in place
The campaign, launched late in 2020, asked consumers to scan a special QR code or visit a dedicated microsite to add a Pockets for Bits card to their mobile wallet. When purchasing Hot Pockets and using a link in the mobile wallet card to scan their receipt, participants would then receive a unique code linked to their Twitch account carrying varying levels of Bits to dole out. Conceptually, the brand wanted to tap into the idea of "frictionless commerce," per Waddell, where consumers can immediately get rewarded after scanning their receipts.
Paid media on Twitch and Snapchat, along with partnerships with influencers including Shroud, supported awareness for the effort that saw thousands of redemptions within 48 hours of launch. Hot Pockets ended up cutting the program's duration, originally slated to run for six weeks, in half due to heavy demand, while driving a conversion rate of 36% — six times higher than past couponing initiatives. The surprise success spurred Hot Pockets to broadly rethink how it approaches campaigns in the gaming space, including a partnership with Microsoft's Halo: Infinite.
"It changes the foundation for how we look at creator-led activations, not only the other part of this year, but into next year," Waddell said. "If Hot Pockets for Bits hadn't happened, these new digital facing programs like this would not be enabled."
Waddell said that Hot Pockets' execution is indicative of a "consumer-centric" approach that tries to stay grounded in what consumers actually want to see, even if that means not every aspect of the campaign is heavily branded. Streams sponsored by Hot Pockets racked up over 1 million cumulative hours of watch time, but only occasionally featured messages explicitly about the product.
"I was really focusing on moving our actions towards the eater," Waddell said. "With that, you have to be in the spaces that they go to, that they play with, that they engage within."
At the same time, Hot Pockets had an outlet to attach itself to moments of emotional connection with viewers. Shroud, the top influencer involved with the Bits campaign, wields more than 9 million Twitch followers, and would plug Hot Pockets in a fashion that didn't come across as an overt ad read.
"We saw the direct correlation to click-through rate based on when he would open his mouth and say something," Waddell said. "It wasn't just like, 'Buy Hot Pockets.' He took you into his pitch and he broke away in the areas in which he was most intimate."
While the Bits promotion paid out in the long run, the lead-up to the program was longer than Waddell wanted. Part of the problem stemmed from convincing internal stakeholders to change their thinking regarding performance. When narrowing in on specific fandoms like gaming, some platforms ultimately matter more than others, which carries an impact on overall reach. Examining other factors, like sentiment in streaming chats, can also be of larger importance.
"They nurture the channels in which they stream, not necessarily their other channels," Waddell said of gaming creators.
"You might see content numbers that maybe don't feel good when you read the report and kind of look at it on Instagram, Twitter, those types of things," he added. "It's not just about impressions and net reach. It's more so about engagement rate, conversions, being able to look at the sentiment in the chat in real-time."
"We pivoted a little bit [but] you cannot forget kind of where the lion's share is," Waddell said during a Q&A portion of the discussion when asked whether Hot Pockets was ditching moms.
"It's not like we're going to completely change the course of the ship, but more so think about it from the full family perspective and how we do things together," he added.
Article top image credit: Permission granted by Advertising Week
Latest marketing trends in consumer packaged goods
Wariness toward in-store shopping has accelerated the need for stronger e-commerce and DTC strategies from CPGs, with poor online experiences becoming big deal breakers for consumers. At the same time, CPGs have found themselves at the center of calls to promote diversity and inclusion on both the marketing and product fronts.
included in this trendline
How Mondelez deploys empathy to sidestep personalized marketing's 'creepy chasm'
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How PepsiCo is harnessing data to help retailers increase sales
Our Trendlines go deep on the biggest trends. These special reports, produced by our team of award-winning journalists, help business leaders understand how their industries are changing.
Davide SavenijeEditor-in-Chief at Industry Dive.