Financial services, automotive, technology, most recently property. One by one the key vertical market sectors have fallen in love with the arguments for interactive media and started spending their budgets – in some cases their entire budgets – online. The one great hold-out has been the FMCG sector.
This isn’t for want of trying on the part of the digital marketing industry. The Internet Advertising Bureau has been targeting FMCG brands for several years, trying to persuade them that online advertising could deliver for them too, only to see online ad spend in the consumer goods sector fall to its lowest ever level in 2008; 3.8% compared to 5.7% in 2004.
The reasons for the FMCG marketers’ lack of enthusiasm for interactive media are well known and centre on reach and aversion to risk. There’s also the fact that the categories that spend the most online all tend to involve high-price items, the purchase of which comes at the end of a significant period of research and information gathering. Online is very good at conveying lots of information in useful ways. Compare an online mortgage calculator with the tiny white print on TV ads for financial services, for example. In contrast, there isn’t much information needed in making a choice about a skin-care product, no matter what Jennifer Aniston might have told you.
This leads on to the question of signposting. Interactive advertising implies that every element should fulfil the promise of the one that preceded it in the customer journey, and should in turn direct the customer to the next stage.
But if you’re a manufacturer of consumer goods, you have nowhere to send people. You can’t send them to a transactional site for fear of enraging your retail partners. And you can’t send them to an informational site because, well, there’s not that much information. At that point, a marketer would not unreasonably ask what their online ads are actually achieving.
The same logic rules out the use of search for anything other than hygiene or crisis management. And as search accounts for the majority of online advertising spend, that 3.8% share is hardly surprising. FMCG’s just don’t do online.
But this situation may be starting to change. I was recently talking to Maggie Lonergan, managing director of digital agency Maynard Malone, who said that she thought the rise of social media was having an impact on FMCG brands’ thinking; they had woken up to the world of conversations that social media makes possible. This coincided with a story in New Media Age about Procter & Gamble (P&G) moving into social media by launching product ratings and reviews on its Head & Shoulders and Ariel brand websites.
FMCG companies have experimented with social media before, of course, with mixed results. The Cillit Bang incident, for example, saw Reckitt Benckiser apologise when someone representing the character from the brand’s TV advertising posted a comment on an unrelated blog. But the complexity of social media means it can do a lot more than raise awareness. P&G’s move looks to be much more about engagement.
Consumer reviews are an established part of the social media toolkit, but up to now they’ve tended to be used for more expensive items, from clothing to electronics. As the price bracket goes up, independent product information becomes more important, driving people to look for reviews.
Meanwhile, the status accorded to an expert becomes greater the more complex the subject is, encouraging more people to post those reviews. The lack of information associated with consumer goods might suggest that P&G will struggle to attract reviewers and readers, but companies that have used reviews report that marketing is the least of the benefits that accrue.
Far more important is the feedback about what customers think of the products and the ability to predict and accommodate unexpected peaks and troughs in sales. Indeed, P&G has said its aim is to enrich the content of the sites and help inform future product development.
In other words, P&G is using social media as a way to find people who are enthusiastic about its brands and open a direct communication with them, a task that would have been extremely difficult before the advent of interactive media since the company has no direct sales. It reminds me of a comment made by a head of digital at a big record label discussing (legal) digital downloads. “At last,” he said, “we know who’s buying our records.”
The irony is that, after all the efforts to persuade FMCG brands to advertise online, P&G’s move won’t make the slightest dent in the spending figures. Because the social space is about earning rather than buying media, it won’t bring much cheer to beleaguered online publishers looking for another source of revenue. But then that’s not P&G’s problem.