CPG Marketers Missing Online Opportunities
Forrester study shows that CPG marketers don't provide enough promotions, recipes and samples on the Web.
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According to a recent report by Cambridge, Mass.-based Forrester Research, consumer packaged goods (CPG) marketers aren't taking full advantage of the online environment to build relationships with consumers. The study, titled The CPG Digital Marketing Gap, shows that consumer packaged goods marketers are not only failing to leverage marketing investments in other media to drive consumers to the richer Web environment, but are also delivering content that most shoppers don't want.

The study consisted of a survey of 6,271 U.S. households, randomly selected from Information Resources' Shoppers' Hotline panel, which were asked about their grocery-related activities online. Researchers also audited 38 popular brand sites to see how well these sites deliver the features that consumers report they want. The study also included an analysis of 145 magazine ads and 225 product packages to determine the level of visibility that marketers give to their online initiatives. The analysis considered whether they listed a Web site address, and if so, how prominently.

For the purposes of the survey, Forrester Research identified 13 activities online, such as looking up product information, getting nutrition information, finding recipes and registering for promotions and asked how frequently consumers engaged in these activities. While consumers' responses indicate a willingness to interact with brands online, the analysts discovered that their reasons for visiting brand Web sites rarely coincide with what marketers deliver.

To start, marketers seem to be dead wrong about the value of lifestyle content. According to the study, more than two-thirds of brand Web sites are chock full of such content while just a fraction--3 percent--of the audience is interested in such user portraits. Instead, consumers want more practical information. Namely, their top three desires are promotions, recipes and free samples. Almost two-thirds of the respondents go to a brand site hoping to register for a promotion or download a coupon, yet as many as a third of all sites disappoint them. And while more than half of the panel reported that they want samples, over three-quarters of the sites analyzed offer none.

Online Obstacles

The problem with coupons may be more technical than anything else. Certainly, the Web is more cost effective than newspaper FSIs (free standing inserts). "If consumers are printing coupons at home off of the Internet, you are potentially opening up to fraud," explains Lisa Cruz, director of marketing at San Francisco-based online coupon company Planet U, part of the Transora family. "Marketers and retailers are concerned that coupons that are printed at home can be reproduced or altered," she says. Alternatives, like those available from Planet U, replace those paperless coupons with electronic links to a retailer's frequent shopper card. Internet discounts are credited at the point of sale.

As for samples, the problem is a more human one. "Everyone likes something for free," Cruz says. When her company coordinates such Internet sampling programs, the samples always "blow out" immediately. It's hard to sustain the demand.

But, as Forrester Research's analysis of packaging and print ads shows, CPG manufacturers are not even doing a good job of getting consumers to their Web sites in the first place. According to the report, more than 70 percent of product packages list no URL at all, or the location is so obscure as to be unnoticeable. Similarly, only 13 percent of print ads include a URL, and marketers aren't taking much advantage of banner advertising either. According to Competitive Media Reporting, CPG companies spent $44 million for online space in 2000.

The researchers argue that a major source of these failures is a disjointed marketing process wherein the Internet is an afterthought to planning, budgeting and creative processes. "The whole integrated marketing communications push came about because consumers were getting bombarded with multiple messages, and it was increasing the clutter. But clearly, marketers are falling down on the job," says Meg Malloy an assistant professor of marketing at Cornell University. Like CRM in other industries, marketers need to view the Web as a complement to their offline campaigns and leverage the interactive nature of the Web.

Yet, as to the extent that consumers are willing to interact online, the Forrester Research may be rather skewed. According to the report, 44 percent of respondents say that they look to the Web every week for grocery-related activities; 75 percent of them are willing to receive e-mail from their favorite brands; and 50 percent are open to sharing their needs and preferences with manufacturers. The research base does number in the thousands, but the Shoppers' Hotline panel is composed of households that agree to do in-home scanning of the products they use for a 52-week period. It's also reasonable to think that the average American is not so brand-friendly.

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