Artificial intelligence (AI) and algorithms are increasingly key pieces of technology for Procter & Gamble (P&G) as it aims to improve advertising efficiency and effectiveness, brand chief Marc Pritchard said during a livestreamed keynote at the Association of National Advertisers (ANA) Media Conference in February 2023.

The packaged goods executive, who is board chair of the trade group and delivered the confab’s opening address for the eighth time in its 11-year history, started his talk by acknowledging that P&G has lost its status as the world’s top marketer by media spend. It’s a change he attributed in part to a focus on precision versus volume, suggesting that others in the industry could benefit from adopting similar thinking.

“Celebrating a company as the largest spender implies that it's better to spend more and more each year,” said Pritchard. “We see it a little differently, and that it's time for a reset.”

P&G has made efforts to in-house marketing functions over the years, notably in media buying. This strategy has extended to more tech-forward areas like data and analytics and AI development, Pritchard added at the conference.

Multiple units within the company, which owns Tide, Downy and Pampers, now rely on proprietary algorithms that draw on “a vast repository of consumer research data” from across decades, Pritchard said. With P&G’s in-housing bets reaching fresh levels of maturity and sophistication, its relationship with marketing services providers — which has been contentious in the past — continues to shift.

“More than ever, we need agency partners to see around corners,” said Pritchard, again calling out AI as an example. “We're finding that we can do more work in-house productively and we can strengthen agency partnerships at the same time to create more value.”

Algorithms in action

Pritchard joins a chorus of executives who have put renewed emphasis on AI and adjacent technology in 2023. The rapid rise of solutions like OpenAI’s ChatGPT has captured the interest of both consumers and investors and set off a firestorm of debate around the ethical implications of ceding more work to automation. Top agencies also appear eager to jump into the space.

For P&G, AI intersects with a concentrated push around first-party data. Pampers, for instance, needs to engage the relatively small subset of parents who have children in the diapering stage. In turn, the marketer has switched its model to focus less on broad-based channels like TV and more on owned channels, such as a due date calculator, baby name generator and its Pampers Club rewards program. Data acquired from these assets is then leveraged by an in-house media unit for targeting purposes. 

“With first-party data and other sources, the Pampers media team has created precise smart audiences using a proprietary algorithm that defines consumer groups across the various stages of baby and child development,” said Pritchard.

Advertising creative is also being tested more frequently against AI. Pampers and other P&G brands like Tide rely on an AI studio offering that uses a “neural data network” built on decades of P&G consumer testing, according to Pritchard. Consumer feedback on new efforts is uploaded to this system and measured against existing ads to predict in-market performance.  

“This allows us to make changes to images, music, copy or text to iterate and improve the ad for the very, very best performance, very quickly,” said Pritchard. 

The executive claims this approach is cheaper and more efficient than traditional ad-testing methods. Pampers is now able to optimize more than 140 different ads per year for various channels, including TikTok, YouTube and e-commerce. The brand grew its U.S. sales by 10% in 2022 while increasing return on investment by 17% and media savings by 15%. 

Tide applies AI differently because it’s aimed at a wider swath of consumers, giving TV and streaming greater prominence. The detergent brand now has planning and scheduling algorithms that help it place ads across dozens of networks and thousands of program combinations while cutting down on redundancy, a sore spot in connected TV. P&G claims it saved $65 million in 2022 through its fabric care in-housing.

“Now, they're using an algorithm to test a new way to buy ads that's spread evenly across all TV programs, channels and day parts, which should increase reach another three points and save another $40 million,” said Pritchard of the fabric care team.

New frontiers

With automation bolstering aspects of P&G’s legacy media business, an algorithmic bend is bleeding into more nascent channels as well. Retail media networks represent one of the CPG marketer’s largest and fastest-growing buckets of spend, according to Pritchard. 

Together with retailers, P&G is creating what he called an “auto-bidder.” The digital solution opens direct access to retailer search programs and lets P&G adjust its ad buying and content “every 15 minutes automatically,” the executive said. The end result is four times higher return on brand sales and bigger basket sizes for merchants. 

During a Q&A portion of the event, Pritchard was asked about how he thinks about AI practically for P&G amid a period where marketers are trying to discern what’s hype versus substantive.

“The best way, we found, to do it: Don't talk about the algorithms, don't talk about the technology, don't talk about AI,” said Pritchard. “Talk about the outcome you want. What are we trying to achieve?”

Coca-Cola recently became the first marketer to take advantage of a partnership between management consultancy Bain & Company and OpenAI, the developer of artificial intelligence (AI) software ChatGPT.

Through the partnership, Coke will leverage tools like ChatGPT and DALL.E, a digital image generator built on deep learning, to enhance its marketing and improve operations. Potential use cases for brand marketers highlighted in the announcement include more personalized advertising copy and targeted messaging.  

In a statement detailing the tie-up, Zack Kass, OpenAI’s head of go-to-market products, said that Coke’s strategy with AI is the “most ambitious” his firm had seen to that point from a consumer goods company. AI has quickly risen to be one of the most-watched technologies in marketing in 2023, though ethical and implementation questions remain. 

Coke is one of the most recognized packaged goods marketers globally, meaning that its early adoption of OpenAI’s solutions could further accelerate the trend while producing practical use cases for AI.

“We are excited to unleash the next generation of creativity offered by this rapidly emerging technology,” said James Quincey, chairman and chief executive of The Coca-Cola Company, in a statement. 

In the press release and an accompanying video, an executive from Bain described AI as being at an “inflection point.” Bain has been integrating OpenAI’s offerings into its internal systems over the course of a year, per the announcement. 

“We see this as an industrial revolution for knowledge work, and a moment where all our clients will need to rethink their business architectures and adapt,” said Manny Maceda, worldwide managing partner at Bain, in a statement around the OpenAI alliance. 

ChatGPT went live to the public in November 2022, but quickly pushed discussions of AI back into the mainstream, with breathless media coverage and investors raising more questions about how much of a game-changer the category could be. Microsoft, which previously worked with OpenAI, announced an additional $10 billion investment in the startup in January 2023. The tech giant has implemented OpenAI’s language-learning solutions into Bing and its Edge browser amid a budding search war with Google. 

Maceda added that the collaboration with OpenAI will give Bain direct access to AI models that can be used to tailor digital services for clients. In Coke’s case, that seems like it will manifest in personalized advertising that is reliant on copy and images created with the help of automation, along with unlocking some new operational efficiencies. The release also suggested AI could help categories like retail banks, telecommunications and utility companies with customer service through real-time scripting, or financial advisors with productivity and communication with clients.

Dizzying hype around AI has been complemented by renewed skepticism. Solutions like ChatGPT still get a lot of things wrong but can express misinformation confidently or behave in odd ways. Microsoft has limited the amount of chat interactions users could have with its Bing AI after long conversations led to off-putting results. Artists have also decried tools like DALL.E, which are often trained on human-made images, raising questions around ethics and ownership.

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By Veryfi

“Smart companies have realized that customer loyalty is the most powerful sales and marketing tool that they have.” – Bill Price

We all understand the concept of customer loyalty because we are all customers ourselves. Loyalty is built with brands that not only deliver good products, but share our values, understand our preferences and earn our trust. So, as a marketer, how do you earn trust so that even during uncertain times, customers come back to your brand over and over again?

The answer is two-fold: 1) know your customers and their preferences and 2) deliver them personalized, timely offers.

How to grow customer loyalty during a recession

During a recession, although customers are holding on to their wallets tighter, their expectations are the same. They want personalized service and they want to be rewarded for loyalty to your brand. According to Twilio, 60% of consumers report they will become repeat buyers after a personalized purchasing experience.

For this reason, loyalty programs are the main vehicle for driving personalized offers and incentivizing customers to engage. This, in turn, provides your marketing team with valuable insights delivering increased wallet share. So, how does this change during a market downturn?

Understand your new customer segments

While you might normally segment your customers by demographics, these become less relevant during a recession. Instead, look at psychological segmentation, which considers consumers’ emotional reactions to the economy:

1. Slam-on-the-brakes consumers feel most vulnerable and hardest hit financially. This group reduces all types of spending by eliminating, postponing, decreasing or substituting purchases.

2. Pained-but-patient consumers tend to be resilient and optimistic about the long term but less confident about the prospects for recovery in the near term. Like slam-on-the-brakes consumers, they economize in all areas, though less aggressively.

3. Comfortably well-off consumers feel secure about their ability to ride over bumps in the economy. They consume at near pre-recession levels, although will be a little more selective about their purchases.

4. Live-for-today consumers carry on as usual and remain unconcerned about savings. The consumers in this group respond to the recession mainly by extending their timetables for major purchases.

Understand how customers think about products

Consumers prioritize consumption by sorting products and services into four categories:

1. Essentials are necessary for survival or perceived as central to well-being.

2. Treats are indulgences where immediate purchase is considered justifiable.

3. Postponables are purchases that can be reasonably delayed.

4. Expendables are perceived as unnecessary or unjustifiable.

Even during a recession, people still need to purchase food and beverages, so how do brands compete for wallet share? It’s clear – know your customers’ preferences and harness that insight to create personalized campaigns.

Leverage customer receipt data

According to Fundra “54% of customers will stop shopping with a brand if it doesn’t provide engaging content or relevant coupons.”

Receipts are the only source of first-party data that provides a cross-basket view of a customer’s buying habits and brand preferences. Therefore, receipts can unlock immensely valuable insights. A CPG company can use receipt data to drive personalized promotions that increase purchase frequency, create brand affinities and attract new brand customers.

To meet today’s consumer expectations, receipt capture must be fast, accurate and secure. Purchase validation (with built-in fraud prevention) should be instant, so that in addition to a vastly improved customer experience you can provide real-time rewards and offers.

How CPG companies can grow in a recession

We’ve gone through some basic strategies CPG companies use and how they can be applied during a recession to drive repeat customers and brand loyalty.

Here’s a recap:

• Segment your customers according to the changing economic landscape

• Harness receipt data to understand your customers and your competition, and provide personalized incentives

• Use cross-basket insights to drive innovative loyalty marketing campaigns

• Ensure your customers are getting rewarded for choosing your brand!

Take your loyalty program to the next level

Use innovative technology and data to make your marketing programs more successful. The area most crucial to successful CPG loyalty programs is unlocking first-party cross-basket data. Without it, you’re running programs much like shooting arrows in the dark. 

To unlock first-party cross-basket receipt data, check out the Veryfi CPG Toolkit for loyalty marketing. To see how Veryfi technology works, try it yourself in this free web demo. Ready to see how Veryfi can help take your loyalty program to the next level? Schedule a one-on-one demo with a loyalty marketing expert.

NEW YORK — Media fragmentation is a frequent topic at Advertising Week New York, an annual conference where industry professionals gather to get a pulse on what’s new. With the meteoric rise of the metaverse, TikTok and streaming TV during the pandemic, that theme was particularly pronounced in the fall of 2022. For marketers, the challenge is not just being spread thin by a multitude of options, but also acclimating to nascent channels where traditional ads are less impactful or even outright rejected. 

“Paid media is not where consumers are always spending their time,” said Todd Kaplan, CMO of Pepsi, during an interview on-site at the conference. 

“It's a double-edged sword. It's the best of times for marketers because there are so many new and exciting platforms and ways to reach and engage with consumers,” Kaplan added. “But it's also really challenging to reach consumers through all those platforms because each has different formats, different needs, different content rules.”

For a brand whose history stretches back to the earliest days of mass media, Pepsi has occasionally been roiled by such shifts and an age where social media can make or break a campaign’s reception. At the same time, the soft drink marketer has tried its hand at a number of concepts that Kaplan positions as “opt-in”: authentically engaging versus coming off as a “swarm of bees” trying to catch a consumer’s attention. The company vet, who’s been with Pepsi for over 16 years, was also critical of purely transactional messaging, stating he tries to approach marketing from the end-user perspective. 

“If you think of your own life as a consumer and the amount of messages you receive and see and experience throughout an entire day, it's overwhelming,” said Kaplan. “You need to nuance how your brand manifests. It all starts with knowing your brand point of view and how you show up in culture.”

Standout Pepsi projects in recent years include a feature-length film with theatrical distribution; a Showtime documentary; a branded reality show; and music videos with top artists like Doja Cat and Chlöe. The singer features in a reimaged version of “Footloose” that draws on a viral TikTok trend. 

While a paid strategy can help spread the word for these efforts, Kaplan said he believes generating organic online chatter and earned media is still undervalued among marketers and stands as the true mark of impact. The marketing outlook is justified on the growth front: Pepsi parent PepsiCo raised its full-year guidance despite a challenging macroeconomic environment where consumers feel pinched by inflation. 

“We're really focused right now on driving frequency with our core consumers,” Kaplan said. “As you look across cohorts and platforms, we want to be there. But we've really moved the needle on making sure our core consumers are well tended to.”

Hard choices

Pepsi adjusted its media focus in other ways in 2022. Earlier in the year, it ended its run as presenting sponsor of the Super Bowl Halftime Show, a crown jewel of sports broadcasting where it’s received accolades over the past decade. The brand preserves a relationship with the NFL.

At the macro level, media fragmentation has pushed the marketer to be more “choiceful,” per Kaplan, and, dependent on the channel and campaign, less precious about its brand.  

“Obviously, you can't be everywhere and everything to everyone,” Kaplan told Marketing Dive, echoing comments made by Domino’s executives at the conference. “You have limited resources and budget that you've got to spread throughout those things and limited creative.”

There are a few clear places where Pepsi is moving to shore up a foothold. TikTok is a major target, not only through programs like the “Footloose” ads with Chlöe, but also a push behind a new Pepsi Nitro offering that centers on Khaby Lame, one of the app’s most popular creators. The nitro-infused beverage, which mimics the way drinks like Guinness are poured, is aimed at the same younger crowd that’s made the viral video app into a sensation. 

Other newcomer channels are getting the wait-and-see approach. The metaverse was a recurring topic at Advertising Week, but Kaplan thinks of it as a “fat word” that’s yet to be tangibly realized. Still, the promise is there.  

“Everything's in the metaverse. I would say, right now, the metaverse in that way doesn't really fully exist yet,” Kaplan told a crowd during an Advertising Week panel. 

“What's more interesting is all the kind of fundamental technology that's under the hood,” he added, referencing blockchain, nonfungible tokens (NFTs) and other staples of Web3. 

Pepsi, in 2021, dropped its first NFTs, a collection of thousands inspired by its history with music. The Mic Drop release also attracted the types of scam artists common to the digital collectibles space, pointing to some of the pitfalls of a media environment increasingly centered around immature channels.

“It's a very clunky consumer experience right now,” Kaplan told Ad Age reporter Erika Wheless on stage. “Because it is decentralized, you don't have some Big Brother overseeing it so that when you get scammed, they're gonna say, ‘Oh, I'm gonna make it right.’ There's nobody to complain to.”

Despite recessionary warnings and brands tightening their belts, one area of advertising can’t seem to stop growing. Retail media is now estimated to represent 11% of total advertising spend at the global level, a meteoric ascendance for a category that wasn’t widely recognized until a few years ago but is now under the higher level of scrutiny the spotlight provides. 

As the market matures and gets more saturated, cracks are forming that resurface old tensions in a brand-retailer ecosystem where the merchant side of the equation has frequently held the chips. Retail media’s stunning upward trajectory at the pure dollar level masks simmering frustrations from marketers that feel obligated to make buys or lose out, even if the strategy proves unprofitable or feels like a cost of doing business versus a nice-to-have perk.

With a lack of industry standardization, third-party solutions providers also see an opportunity to patch over the gaps that retailers are unlikely to mend of their own volition. And hovering in the background is the chance of consolidation that would lead to just a few heavyweights wielding influence. GroupM forecasts ad revenue for retail-based companies will grow nearly 15% in 2022 to $101 billion and reach $160 billion by 2027.  

“The relationship has always been fraught,” said Nikhil Lai, a senior analyst that specializes in performance marketing at Forrester Research, of brands and retailers. “That relationship is now being put through the crucible of retail media, and it's being changed in many ways.”

Growing pains

Given the amount of money pouring into retail media channels, pretty much any company that owns a brick-and-mortar store, e-commerce website or app is racing to stand up an ad network that can grab a piece of the pie. Trade shows have been abuzz with the topic, with a raft of presentations from companies like Walmart, Target, Albertsons and Kroger touting the latest in their tech and media innovations (the latter two are also trying to merge, which would create an even more formidable player in the grocery vertical). 

“We've seen a tremendous growth in retail media network investments from our clients,” said Jeremy Woodlee, a managing director at Accenture Song, during an Advertising Week New York panel in the fall of ‘22. “Virtually every client we have, in retail and beyond, [is] looking at this.” 

Interest in retail media is driven by the promise that merchants can apply their troves of first-party shopper data to better target and measure ad campaigns, all while placing messages closer to the point of sale. The value of the “closed-loop” measurement proposition has only increased as third-party cookies face deprecation and performance marketing is decimated on social media platforms like Facebook and Instagram due to privacy changes implemented by Apple.

Meanwhile, marketers are under pressure to prove their efforts can be tied to results in the short term as the economy takes a nosedive. Ad spending has steadily slipped in recent months as brands try to make smarter choices with their dollars. 

There are other perks to retail media that stand out during an especially tumultuous digital period. Ads for pet food running on an e-commerce site people visit to browse and shop for similar products won’t appear next to conspiracy theories or hate speech, for instance. 

“What brands appreciate about retail media is that there is stronger attribution data (from media impression to [omnichannel] sales) and they consider it ‘more brand-safe’ compared to other forms of traditional media,” said Rachel Tipograph, founder and CEO of MikMak, an e-commerce services provider, over email. 

However, traditional retailers’ grasp of digital technology has historically been patchy, to say the least. The fast influx of brand dollars to retail media has led many to rush to scale up their offerings and partner with outside vendors, but most networks remain fairly rudimentary. Advertising supply can be limited, according to Tipograph, which can drive up rates. Additionally, there’s a shortage of the types of real-time reporting and self-service functions that marketers are accustomed to on digitally native platforms. 

“Most of the growing pains come from the fact that retail media is at its infancy compared to more traditional forms of media,” said Tipograph.

There’s also the issue of internal silos on the retailer’s end. Retail media teams are relatively new and making smart hires, but a lot of shots are still called by the stodgier merchant side of the house. That can create complexities where the retail media division is working closely with certain brand partners that want to boost their profile, while other pockets of the organization are focused on conflicting areas. 

“There is a disconnect between the retail media side and the merchant side,” said Michael Harrison, a managing partner at the management consultancy Winterberry Group. “Ultimately, the [key performance indicators] and objectives of the organization have to be aligned. And right now that alignment is not occurring.”

Walled gardens revisited

Endemic marketers — the packaged goods companies that rely on store and digital shelves to reach shoppers — for years have also warned that retail media networks run the risk of mirroring the walled gardens of Facebook and Google that came to dominate the digital sphere. Retailers put on a compelling pitch to advertisers around driving incrementality but are keeping their data as close to the vest as ever. The result is a lack of transparency, some experts say. 

“Kroger grades their own homework, Walmart grades their own homework and everybody feels that it's not truly moving the needle and they don't trust the numbers,” said Harrison. 

Marketers have taken assessing retail media into their own hands or tapped outside vendors and agencies to get a clearer picture. Software companies and ad agencies with historic shopper know-how have been able to piggyback off this demand to help brands solve for what’s termed “signal loss.”

With more tools at their disposal, brands for the first time are factoring retail media into media mix models (MMM) where it can be compared against the historic performance of other areas of spending.

“It's a matter of time, it's a matter of data volume. It's also just a natural human tendency to need verification,” said Forrester’s Lai. 

“This is the first year that marketers have sufficient data to add Amazon or Walmart into their MMM,” he added. “They're able to compare the profitability of retail media as a channel versus search versus social versus TV versus out of home.” 

Fear of retaliation

Subsequent whispers that some retail media is unprofitable stem from the fact that buys rarely happen in isolation for endemic brands.

Slotting fees, traditional shopper marketer agreements and other fines to serve retailers tally up, and are entrenched through long-standing relationships that predate the retail media craze. Some view the cumulative cost increasingly as a “tax” versus a benefit, according to Winterberry Group’s Harrison. That factor can feel particularly sharp when buying media outside the retailer’s owned and operated platforms, or “off-site.”   

“All of the markups on top of it turns it into negative [return on ad spend],” said Harrison. “The retail media networks aren't getting that inventory for cheaper, they're just adding fees on top of it, and the performance doesn't justify the increased fee.” 

Avenues of recourse are limited because endemic brands act as retailers’ customers. They rely on them for prime shelf placement and positive rankings on e-commerce marketplaces to drive sales. Some are starting to fear some form of retaliation if they spend less than they can on retail media, experts said. 

“The threat is imagined, but is nonetheless credible,” added Lai. “The brands need the retailers so much more than the retailers need the brands.” 

Proposed deals like the Kroger-Albertsons merger at the same time stoke the anxiety that power in retail media could be further consolidated into just a few hands, further tipping the scales and leaving brands with fewer alternatives over the long run. 

“You'll probably have, in reality, three big walled garden entities that compete against each other. I assume that there will be some form of a consortium of the other players that come together similar to an ad network back in the early days,” said Harrison. “It has to be that way. Otherwise, nobody will spend with them.”

Corona and Coors Light are two very different beer brands. One positions itself as a premium offering while the other prides itself on being a budget product. One originates in Mexico while the other is brewed domestically. However, there’s one thing both brands have in common: sustainability marketing programs.

As climate change becomes a growing concern for consumers, sustainability has become a priority for advertisers. Corona and Coors Light have each managed to launch sustainability campaigns in their own way that remain true to the brand, while positioning themselves for a new generation of consumers. For Corona, key to the success of these efforts is the ability to make a strong business case for building marketing around sustainability.

“The only way for me to be able to sustain this, beyond my personal belief, is if I can prove to the business that sustainability is a better business than any other business. It's not a part of the business. It is the business,” said Felipe Ambra, global vice president of Corona, owned by Anheuser-Busch InBev (AB InBev). The executive reports that on multiple occasions, he has been able to prove that environmental-based marketing campaigns return equal or greater brand equity and sales results than a traditional, product-centered campaign.

For Coors Light, owned by Molson Coors, revamping its already popular “Made to Chill” campaign proved to be the ticket to making an impact with sustainability. Corona, which is owned internationally by AB InBev and in the United States by Constellation Brands, took a different approach. The AB InBev owned arm of the business launched a series of plastic-elimination initiatives over the course of several years, culminating in the opening of Corona Island, an island resort free of single-use plastic that plans to welcome its first guests in 2023.

Keeping it real

As Gen Z consumers reach an age when they can drink, alcohol brands have been quick to cater to them. 

References to “going green” and “carbon offsetting” are especially important for reaching this elusive younger consumer, with nearly 73% of Gen Z consumers saying they are willing to spend more for a sustainable product. By 2030, this generation will make up 27% of the world's income and surpass the income earnings of millennials a year later. That much buying power cannot be ignored.

Environmental advertising could be one way to cater to this generation. However, there are challenges. Another thing Gen Z values besides the environment is authenticity. Greenwashing is quick to be called out, and such campaigns can backfire.

Forty-one percent of consumers said they boycott brands they see as exploiting public sentiment, according to Augie Ray, vice president analyst at Gartner for Marketers. For this reason, it’s important that brands have sustainable products and practices before advertising them, he noted.

“In general, our research suggests that consumers perceive most brand social justice action as being more about making the brand look good than about making a real difference,” said Ray.

However, even well thought-out environmental efforts can be met with backlash. In 2022, Unilever CEO Alan Jope was criticized by a major investor for allegedly putting a focus on sustainability over profits. 

Both Coors Light and Corona made an effort to integrate sustainability into production prior to advertising. Coors Light has committed itself to phasing out the use of plastic rings by the end of 2025, dedicating $85 million to the push. As the phasing out of plastic rings requires a complete equipment overhaul, this won’t be limited to just Coors Light, but all brands Molson Coors distributes in North America, including Blue Moon and Miller Lite.

Corona has taken a similar approach, slowly phasing out plastic from production. In 2021, it became the first global beverage brand to have a net zero plastic footprint.

“[Sustainability advertising] cannot be a one off. It cannot be greenwashed. So, if you are going to go down that journey, it's a commitment and the commitment needs to be authentic, needs to be continuous,” said Ambra. “It needs to be consistent, and then you start to get credibility from consumers.”

Keep it personal

One hallmark of a good environmental campaign is the ability to seamlessly connect the initiative back to brand purpose. AB InBev’s Corona has focused on beach cleanups and clearing plastic from the ocean as the beach is a key component of its brand identity. For Coors, it revamped a popular campaign for a new consumer.

Coors’ 2019 “Made to Chill” campaign focused on relaxation. Spots would regularly show people cracking open a Coors Light after a long day at work. “Chill” has always been integral to brand identity. Coors Light is meant to be drunk chilled, the brewer going so far as to design special packaging that changes once the beer is cold enough. The laid-back brand image has long made use of the popular meaning of the term “chill,” to be relaxed, in its advertising. More recently, the definition has expanded to also mean chilling the planet.

One example is “chillboards,” an extension of the “Made to Chill” campaign that saw Coors Light advertisements painted onto black rooftops in Miami, Florida using reflective white paint as a way to help cool the temperature of homes. The coating absorbs up to 85% of sunlight and can lower the temperature of roofs by up to 50 degrees, which can help save energy costs, according to the brand.

The chillboards are notable for having a direct, visible impact on a community. No lofty, abstract promises about carbon offsetting or a shrinking footprint were made. 

“As we looked to evolve the brand and to reposition the brand, mostly to attract new, young drinkers, we felt like there was a need for a stronger emotional connection, but we wanted that emotional connection to be consistent with everything that had built the legacy of Coors Light,” said Marcelo Pascoa, vice president of marketing for Coors Light.

Emotional connection has proven to be highly effective for both Coors Light and Corona, which has sought to connect with consumers around sustainability through beach cleanups.

“A beach cleanup... is an action of cleaning up not the beach, it is cleaning up people's minds,” said Ambra. According to the executive, beach cleanups don’t solve the ocean plastic problem. In fact, most beaches only stay clean for a few days after. But, this helps make consumers recognize the magnitude of the issue.

Focusing on small, localized initiatives like beach cleanups or chillboards can also help reduce the risk of a brand seeming tone deaf, or greenwashing. Often there is an impulse on the part of companies to rush things and respond to big national issues quickly, according to experts. It’s easy to see why. A 2022 Gartner study found that 48% of consumers surveyed believed brands must address social issues, regardless of impact on profits.

However, if a response comes before internal change, this can seem reactionary or exploitative. One such example is Pepsi’s now infamous ad showing Kendall Jenner using a can of the soft drink to address police brutality.

“I think that brands need to pay attention to [consumer demands]. And not even pay attention, but truly start to change their infrastructure and how they build their relationships internally and with their consumers,” said Juliette Geraghty, executive creative director at Eleven Inc.

Ultimately, a personal connection is what makes a good environmental campaign because it is going to help win over consumers who feel connected to the cause. That’s one reason why chillboards worked so well.

“I thought [chillboards] was a thoughtful pivot away from a campaign that was very aspirational and unattainable to one that was very relatable,” said Chris Plating, the chief strategy officer at EP+Co, about Coors Light’s “Made to Chill” campaign. “And I think they've continually done a great job of being thoughtful.”

Staying grounded

There are reasons to believe a successful, well thought out environmental campaign can deliver returns. Outside of general consumer enthusiasm and visibility, sustainability can be cheaper in the long run. Reducing the use of natural resources lowers costs, and there are often government incentives associated with switching to sustainability energy sources.

Sustainability has proven its value for Corona, said Ambra.

Research suggests other marketers are finding similar results. Between 2013 and 2018, products marked as sustainable grew 5.6 times faster than those that were not. This was especially true when it came to CPGs, where products in 90% of CPG categories grew faster if they were marketed as sustainable.

“Whether or not it impacts consumer behavior, sustainability is here to stay,” said Gartner’s Ray. “Companies must seek sustainable practices for many different reasons, from cost effectiveness, to regulatory, to reputation, to culture. And yes, sustainability can affect consumer preference.”

Successful green advertising comes down to starting a conversation with consumers. Even a small local campaign like chillboards has the opportunity to grow nationally, even if Coors Light isn’t directly attached to it. Anyone can paint their roof.

“I think that it's a great way to start a conversation, more importantly than anything else,” said Coors Light’s Pascoa of the chillboards. “At the end of the day, anyone can do it, right?

NEW YORK — With consumers increasingly taking to audio content like podcasts, Tostitos developed a sonic brand in an attempt to cut through the noise. Following the debut of the concept, the Frito-Lay label saw dramatic success and planned to expand the play on platforms like TikTok, according to details shared by the company during an Advertising Week panel in the fall of 2022. 

The strategy formed around an easing in pandemic restrictions that caused Tostitos’ target audience — the at-home gatherers and late-night snackers — to return to dining out. At the same time, the brand found evidence that consumers go for their dip first and the “carrier,” or chip, second, said Hana Golden, marketing director of the Tostitos trademark for PepsiCo Foods North America, during the panel.

Time spent streaming audio is up 32%, per information cited during the discussion. Meanwhile, 67 million U.S. consumers listen to podcasts each month. Ads with sonic branding elements see an uplift in attention by 8.5 times those that don’t, according to panelists. But above all else, audio has the potential to drive brand recognition due to its ability to follow consumers regardless of where they are.

“Now that we’ve come out of some of the pandemic, it's even more crucial that we’re putting that sound out there and cueing people to get together,” Golden said. 

Finding the groove

Creating a memorable tone meant unraveling the emotion behind the brand, according to Amy Crawford, senior vice president and head of creative, music and culture at Made Music Studio, the sonic branding agency that partnered with Tostitos on the effort. 

“For Tostitos, it’s the idea that we’re more than a crunch,” Crawford said during the panel.

Questions the studio asked the brand revolved around its story, intentions and the listening habits of its target audience. 

“It was one of the most unique experiences for a brand marketer to where you’re intimately getting to know a brand that you obviously strive to know before that,” Golden said.

The end product needed to be more than a crunching noise, the team said, as that would be a difficult asset to own in the snacking category. To illustrate the point, a panelist noted that there are about 12 to 15 brands that use the simple sound of a ringing doorbell as their sonic branding, leading to a lack of differentiation.

“We often say that you can’t cut through the clutter when you are the clutter,” said John Taite, executive vice president of global brand partnerships and development at Made Music Studio, who moderated the discussion.

To be more authentic, Tostitos’ sound entailed opening a lot of the brand’s jarred queso, guacamole and salsa to capture the perfect “pop,” Crawford said. The end result was created entirely by using Tostitos products and can be heard in a recent ad spot with actor Dan Levy.

The final tune runs a short 1.5 seconds, designed to allow as much content as possible to precede it in ads while still relating back to the brand with key tip-offs like the popping open of jars and biting into a chip.

“We were really thinking about how to get to the inevitable sound for the brand,” Crawford said. “This could only be for Tostitos and that’s a key question that we asked ourselves throughout this really fun process … When you come to the end result, could this be any other brand? If the answer’s maybe, we haven’t done our job.”

Measured success

Before deploying the sonic brand at scale, audio intelligence firm Veritonic and Tostitos put the product in-market to road test it and set predictions for how it would perform. It met their expectations quickly, said Korri Kolesa, chief revenue officer of Veritonic. Research conducted six months post-release found significant increases in consumer sentiment. Most importantly, there was a 38% increase in brand recall stemming from the audio addition, Kolesa said.

“That figure is just for the sonic identity, just that second and a half,” she said. “That’s not with a tagline, that’s not with a corresponding visual logo. That tells you how impactful audio is.” 

Tostitos and Made Music Studio ended the panel by teasing an upcoming TikTok concept called the “Tostitos Sample Pack” that breaks down the various components of its sonic branding so creators can make a jingle of their own. The idea is to encourage the community to layer new tones onto each other’s videos and collaborate. 

“We all know that Gen Z, when they get their hands on these types of things and the reasons we focus on social platforms and impact and culture, is that they like to create themselves,” said Taite. “That’s really where the magic is, it’s actually the sonic identity system that can replicate and become whatever you want it to be.”

NEW YORK — Retail media generated a lot of buzz at 2022’s Advertising Week New York, reflecting its status as a growth driver in an otherwise cooling ad market. While the category has drawn a deluge of new entrants, Kroger has been operating a network since 2017, a degree of maturity that led to it recently expanding into other emergent channels. 

The country’s largest grocer in 2022 added connected TV and video inventory to its private programmatic marketplace, another step beyond the display and sponsored product listings that make up a sizable chunk of retail media activity. The latest addition to the program includes ad-tech partnerships with Magnite, OpenX, PubMatic and Xandr to help advertisers better target their messages. Kroger’s retail media business is part of the Kroger Precision Marketing (KPM) arm and is powered by shopper data derived from a loyalty program that claims to capture 96% of transactions.

“There are multiple channels and the channels need to be leveraged for the right time,” said Cara Pratt, senior vice president of Kroger Precision Marketing at 84.51°, about the CTV push. “Working through the sequencing of an effective investment strategy is really important.” 

As KPM broadens its purview, it’s set for an even bigger shakeup. Days before Advertising Week, Kroger announced it would merge with rival Albertsons, a self-admitted “late mover” in retail media but one with a vocal presence at the conference. Pratt declined to discuss the deal beyond pointing to a press release but spoke about KPM’s CTV ambitions and how the landscape is changing.  

The interview has been edited for clarity and brevity.

MARKETING DIVE: When we first met, Kroger was launching a private programmatic marketplace. Now, you've got a big theme around CTV. Why is that a channel that's come into focus?

CARA PRATT: When we made the announcement last year for the private marketplace, it was wave one, with programmatic display the first wave. 

A lot of the work that we've been doing over the last several months has been tethered into ensuring that we have the right integrations with the SSPs. The inventory side of things is critical with the announcements we’ve made, with Magnite being a primary one. That extends on top of OpenX and PubMatic and some other core players as well.

Obviously, we've been watching CTV viewership trends for some time. Nielsen officially announced that streaming surpassed cable for the first time ever. Really, it's around making sure that we're creating the right access to where consumers are consuming content. It's a step in the journey.

A topic of discussion on your panel is addressability. CTV has seen increasing consumer adoption, increasing brand investment, but there are still gaps. What about Kroger's data gets over the gap? 

PRATT: We've got access to the right inventory and brands because their traders can have hands on the keys. They can put their own brand safety standards on top of that. It's creating an environment where we've identified who are the right households to expose and what's going to drive the highest business impact.  

A lot of the conversations we have with brands and agency partners are also around the ultimate objectives they have. There are brands that are leveraging a real pinpointed activation opportunity for a re-engagement plan for lapsed buyers. There are brands that are really looking to drive net incremental shoppers from a household penetration gains perspective. Being able to slice and dice the cohorts of consumers that you want to expose content to or different creative to is really critical. That's why the connection back into their own tech stack and their own safety standards is a really important piece. 

Then, there’s living up to the measurement standards. It's a real challenge in the industry right now with the lack of standards that exist. We want to continue to put focus on standards that get into business outcomes versus standards that get into media consumption. Moving beyond viewable CPMs and click-through rates and those types as an engagement proxy to an actual business outcome. There are a lot of ways to augment what has historically been a common view of performance that has never really gotten into the heart of what performance really means. 

If you could have a solution tomorrow to enhance the CTV side of the business, what would you want?

PRATT: The operational side of influencing media at scale is really front of mind for us. What does sustainability in media really look like? Supply path optimization is going to be an interesting set of innovation and technology accelerations that are going to create a meaningful opportunity for operators that are fueling media investment activation to optimize at scale in different ways than we've optimized for to date. We're excited about the continued evolution of the landscape.

Kroger has been in the retail media game a lot longer than other retailers. It is now this huge investment channel across the board. Is CTV the next big competitive battleground? 

PRATT: There's no doubt that mature retail media businesses that have the right scale in addressability and in their data foundation can impact advertisers well beyond owned and operated properties. It is making sure that we bring a more performant media ecosystem in the off-property space as well and make those publisher assets work harder. That's where CTV is going to be a big play as investment starts to evolve between linear and streaming. Social commerce is going to be a really fast-moving place because of consumer adoption and the ability to inspire and connect that inspiration. You can go from awareness to conversion in an instant.

Those are the spaces that we think are gonna be really strong engines to the future. That retail media, again, for those that have the right scale and rigor and appropriate practices at play, are going to be able to influence productively.

Social and streaming commerce are interesting. It seemed like they were set for a bigger moment earlier in the pandemic, and then some platforms pulled back their investments. Are you generally optimistic?

PRATT: I'm an optimist for it, not necessarily for Kroger to be a publisher at scale on the social commerce side, but really about enabling core social commerce platforms to be able to inspire, engage and convert in a frictionless way. 

Anything else you'd highlight?

PRATT: The one thing that I'm hearing and seeing, not just here at this conference but that has been happening for the last nine to 12 months, is this attention measure. That's something that I have a level of curiosity around as we think about the future of media, measurement practices and making sure that there’s discipline, from an industry perspective, around what we're solving for.

The industry doesn't need another vanity metric. That's a pseudo-lens into whether an ad had a degree of influence into changing behavior. It really is about continuing to drive that rigor and focusing on brand outcomes. There's a great degree of intrigue and then inconsistency in understanding the role that, potentially, this new measure could bring forward.