CPGmatters: Analysis of Retail Digital Media Activity Helps Kellogg Better Shape Strategies
Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.
Although the process of tracking and analyzing retail digital media (RDM) is new and still being defined, it already represents about a $750 million spend for manufacturers and is expected to grow, according to Scott Taylor, director, new business development, Path to Purchase Institute.
Between January and July 2012, Kellogg participated in a pilot with the Path to Purchase Institute and its new Online Advertising Survey & Insights Service (OASIS). OASIS allows subscribers to monitor and analyze digital advertising of such retailers as CVS, Kroger and Walmart.
This tool helps companies find the answers to several key questions:
- Are we breaking through with share of voice?
- What is the dominant message?
- What is the timing?
- Is it aligned with an in-store promotion?
- Is it intentional, counter-competitive?
- What is happening in different channels of trade and different retailers?
The data reveals important trends. For example, Kellogg learned that some retailers infused communications into their websites to build awareness of their private label brands. Walmart, Sam’s Club and Safeway were found to have been the main drivers of the cereal category for RDM.
Dan Cooke, director of digital shopper marketing at Kellogg, said in a recent presentation that having a comprehensive view and understanding of the coverage across retail enables Kellogg to question dominant assumptions at partners, make local and centralized changes to its media applications, and audit the effect on sales.
OASIS also provided greater insight into each manufacturer’s activation message, according to Mr. Cooke. Knowing that Post usually sends out a lot of coupons and advertising messages at the end of the quarter helps Kellogg better articulate its counter messages.
"We may not be present in store, but we can help offset some of the loss in share that week by helping to keep our brand and promotion in the consumer’s mind," he said.
Kellogg’s RDM activities will continue to evolve, aided by the near real-time information it is able to obtain. This helps account teams and agency partners respond to marketing shifts more quickly. In addition, its access to archives enables the company to refer to a past program when planning next year’s edition.
For the future, Kellogg is looking for more personalization. It is discussing with retail partners how it can share in the use of data they collect from their shopper loyalty cards. Mr. Cooke stressed. "We want to drive very specific behavior for shoppers in a particular market through partnerships with retailers."
Discussion Questions
What do you think are the benefits as well as the challenges of analyzing retail digital media activity? What unique insights does it promise to glean on shoppers?
The benefits of the insights of retail digital media activity is realized not in the data itself, but in the speed and ability of the brands to respond and react to the insights.
It is not surprising that the analysis ‘discovered’ retailers using brand funds to promote private label products. This has been understood for years and has fueled the tension between retailers and their brand partners. It is one of the reasons retailers never wanted to share category sales information to their vendor partners.
The use of retail digital media across several different applications—couponing, loyalty rewards and digital signage for example, has empowered brands to demand and expect accountability of their funding—MDF, Co-op funds, margins, advertising, and promotions. Brands want to know that their funding was used exclusively in the promotion and advertising of their goods and services and not simply placed to the bottom line of the retailer’s balance sheet.
The digital world has brought transparency into the equation and the insights and information gathered and shared by the OASIS project will provide more opportunity for brands and retailers to become more competitive and collaborative.
STOP!
No more new acronyms for old behaviors. Kellogg monitoring Post’s couponing behavior? How radical! “Discovering” that retailers use their own media to push their own products? Ah! The shock of the new!
We are confusing tools with tactics here. Digitalization makes certain old tracking methodologies both more efficient and more effective. But, that said, we don’t need jargon speak to articulate that point.
I have no idea what “…some retailers infused communications into their websites to build awareness of their private label brands” really means, but I suspect it means that if you monitor websites you’ll discover what your customers are selling. In the Dark Ages of retailing one accomplished a similar goal by reading their circulars or studying “Best Food Day” ads.
Ditto with keeping an eye on competitive promotions. Does RDM “monitor” activity on social media? The article doesn’t tell us.
Bottom line: what we don’t know is are we really gaining a new tool aimed at tackling new tasks or are we just digitally automating old processes? If it’s the former you can try to sell me on the virtues of a new acronym. If it’s the the latter, keep your acronyms to yourself.
The benefits are what they have always been—understanding what competitors, consumers, and retailers are doing. The unique sights have always been a challenge—what, where, when, how, and why do consumers purchase? There are more media tools with the inclusion of social media creating new data sources. However, I agree with Ryan—the questions, the process, and and the issues are not new. There is no need to create new names and confusion for doing basic tasks and creating understanding of the sales process.
There are the traditional benefits of media analysis that apply to RDMs for both retailers and suppliers. The opportunity to reach down to the household level can generate consumer understanding and better target promotions for more efficient use of consumer promotion dollars. One of the key challenges is having the resources to conduct and more importantly make the correct decisions from the analysis.
An important part of making these RDM spends efficient and effective is collaboration among suppliers and retailers. This is usually easy to say and difficult to accomplish. Insufficiently trained resources and silos in both entities make this difficult to do well.
CPG and Retail concerns will want to know the devices on which consumers are accessing their messages (PC/tablet/smartphone), as well as which segments of their audiences (age, gender, where they are shopping, etc.) are making use of and being influenced by digital media.
Having a baseline early in the game permits these marketers have a tractable record. Those trends, in turn, provide a path to more effective messaging and choice of digital solutions.
We live in a four-screen world, and one that offers consumers well-over 35 different media forms that offer paths to the “last mile” where the consumer is making that prized decision of purchase. Having an integrated media solution model, that includes traditional, new, and digital media forms is essential for a world that has moved beyond the conventional “push” / fill the aisles with product strategies.
The consumer is the center of the equation, and digital offers an interactive engagement path.
The e-commerce results for Thanksgiving weekend are in and sales were short of expectations. Analysis of these results can cause concern as to most FY2012 marketing departments’ understanding of this new form of retail sales.
It is now more important to monitor consumers instead of markets and the competition. Most consumers when they enter a site go straight to the search engine without signing in or identifying their geographic location. A large part of the time they are forced to wander through several pages of useless information in order to find the search engine. If they haven’t already left to go to another site they begin to shop in the company’s global inventory files only to risk finding out that the merchandise they just bought is not available in their town or city. This is a huge problem that creates customer service issues and lost sales by the thousands every day.
A review of the market and our completion’s success or failures will not remedy the identified consumer’s frustration with current site issues. Only studying the consumer e-commerce wants and habits will. Specific areas of concern which are consumer-related study needs include security, ease of use, one click on site everywhere assistance, system speed, order tracking, returns and of course, some assurance that they got the best deal. Providing tons of information at the door is perceived as “shouting” and will always leave a bad taste in the consumer’s palette.
Couldn’t have said it better myself, thanks Ryan! Nuf said!
Yes, Ryan, I get tired of new jargon too, especially when it doesn’t add clarity to the discussion.
Of course there is merit in tracking out-of-store and competitive messaging and correlating these with in-store behaviors. Under the old-school advertising model this was too unwieldy a proposition to be put to practical use. In our present digital world, continuous data capture and lag-free analysis become tantalizingly possible.
The hard part comes next. Define business processes that can put the derived insights to work on a daily basis. With the boundaries of the retail environment dissolving due to mobile, social and search, this is a significant opportunity indeed.
It is interesting that folks tend to think digital as more than just another channel. However when examining digital as just another channel and not something more, the posed questions are very relevant. Of course we will analyze digital media, just as we do with all media channels. The benefits of tracking, analysis and measurement are fundamentals of marketing. These activities allow us to develop ever improving and evolving strategies. The digital channel will allow us to shorten the cycle and respond to competitive threats, failed programs and all types of problems quicker than tradition, non-digital channels. The benefit of digital is knowing what to do faster.
There will be challenges as well. One that comes to mind rather quickly is privacy. More information about consumers and their behaviors is available than ever before and it’s up to us to use that information responsibly.
The manufacturers along with payment solution providers (mostly financial services providers) can work with retailers to glean insights on shopping behavior. This can be supported by social media networks (Facebook, FourSquare) and deal management applications (Groupon, LivingSocial).