Archive | March 2012

Procter & Gamble cutting $1 Billion by 2016 and going heavy on digital

Procter & Gamble Places Big Bet on Digital Marketing

By Dale Buss

Procter & Gamble shook up the retailing, marketing and advertising worlds recently when CEO Bob McDonald and Chief of Global Marketing Marc Pritchard revealed their intentions to cut $1 billion from the company’s annual marketing budget by 2016. Going forward, they aim to lean much more heavily on digital programs to achieve the same overall impact with marketing.

The Cincinnati-based CPG giant is adjusting mightily to the sea change in consumer behavior and preferences that places more and more emphasis on online research and interaction even though the in-store experience remains important as well.

P&G has a clear and well-defined vision for digital marketing.

“Everybody is seeing a shift on consumer behavior across at least two or three vectors,” Alex Tosolini, P&G’s vice president for e-business, told CPGmatters.

First, Tosolini explained, “All of us are spending more time digitally to get information and education about various products.”

Second, “People are starting to shop online more than in the past for some of our categories. And every single retailer we work with has to shift their behavior to meet those two vectors.”

The third significant factor, he said, is “the social vector. Digital is becoming an amazing platform for connecting with consumers and having two-way communications for the brand, whereas in the past, communications was much more one-sided. Brands talked to consumers. Now, the whole social community and marketing, are taking this religiously to the next level.”

Pritchard has been mulling these trends for awhile and then decided that P&G not only will boost investments in digital marketing for these reasons, but also plans to trim pricey broadcast-television ads. That amounted to an earth-shaking revelation from the company that helped fuel the rise of modern-day TV advertising by sponsoring soap operas beginning in the Fifties.

But Pritchard and Tosolini are emphasizing what beefed-up digital efforts will enable P&G to do, and what it will do for retailers and consumers as well, not what the company might be trimming to finance them.

Tosolini pointed out, for example, that online promotion of P&G brands can result in higher sales in bricks-and-mortar stores as well; that occurred recently, for instance, when Amazon did an internet promotion for Crest Whitestrips.

“The good news is that, if a job is well done, whatever you do online has effects offline as well as online,” he said. “It’s no longer a binary world. It’s a multi-channel world. And while Amazon doesn’t have stores, original retailers more and more are able to start winning customers across all channels because they’re following consumers there.”

Also, P&G plans to become faster to turn events, and consumer and shopper insights, into executed marketing programs, which will benefit all of its retailer customers. One recent successful execution of that idea was the 24-hour turnaround the company accomplished in producing a MyTide TV ad and video showing use of the detergent to clean up a jet-fuel spill following an accident at the Daytona 500 auto race.

“As a brand builder, you have to take advantage of that,” McDonald, the CEO,  said at a digital workshop in Cincinnati earlier this month. “You can’t be mired in this plan you put together in the Kremlin.”

Tosolini added that McDonald was conveying that “if you listen to consumers in a very new and flexible way, with technology now you can respond much more quickly than we are used to. We want a real-time connection with our audience. And we want to turn that into a competitive advantage.”

The P&G executives have been making a point of telling the marketing community that the company is “open for business” from outside sources when it comes to ideas and programs aimed at improving its performance in the digital space and taking advantage of opportunities its staff might not see.

“We want to leverage the knowledge and power of people outside the P&G roster to innovate together,” Tosolini said. “Whoever has wonderful ideas, please come to us and we’ll be open to co-innovating with you.”

In fact, Tosolini said, what P&G wants to accomplish with digital marketing, and welcoming ideas in from the outside, is similar to the sea change that the company has pulled off over the last decade in bringing ideas for products and refinements into the company’s R&D labs from the outside. Once a chief proponent of the “not invented here” syndrome, P&G has made “outside-in” innovation one of its chief competitive differentials.

With a company this big, powerful – and willing – Tosolini is suggesting P&G may soon become a leader in digital communications as well.
CPGmatters, Shopper Marketing

 

Facebook Explains Its New Real-Time Insights

More Data From Pages And What That Means for Marketers

 

In a matter of days, Facebook will begin rolling out a real-time version of Page Insights, the analytics tool that allows brands to keep tabs on their Facebook presence. Recently, Insights has been much maligned for reporting delays, but that should all be quieted with instantaneous reporting on page and post performance that will give brands a much improved level of control.

To figure out what this means, I chatted with Facebook Product Manager David Baser. Here are some highlights:

Facebook announced this real-time capability on Feb. 29 at Facebook Marketing Conference, amid mounting complaints over updating delays on Insights, sometimes in excess of four days. The issue even got its own website, Why Is Facebook Insights Not Working.

What real-time insights means for Facebook, and you
Facebook’s billion-dollar (or $100 billion, according its IPO filings) proposition is that engagement on the massively popular social network drives business results. The best way to get engagement — whether likes, comment or shares — is for a brand to take actions that make its page more appealing to users. And the way to get there, Mr. Baser said, is through a constantly updated tally of how many people that content is reaching, how many people are interacting with it, and what form that interaction takes.

“Changes in data can drive immediate action,” Mr. Baser said. “For example, you might want to change a post that’s getting a lot of distribution but not engagement. A post with a lot of engagement is maybe one to pin to the top of the page. With real-time, the underlying meaning of metrics are changed. You see what happens, and then you take actions. The data itself becomes a form of analysis.”

Tweaking your posts on the fly as audiences are seeing them isn’t possible with these kinds of delays, so when Mr. Baser calls this “a game-changer” it doesn’t feel like a stretch.

Asked whether there’s a threat of information overload and possibly sacrificing the long-view with all the immediate feedback, Mr. Baser said that the performance of posts is dependent on in-the-moment attention. He added that all historical information will still be available.

“This is about adding functionality, not removing it,” he said.

While real-time data is vital, having a long-view is important for benchmarking purposes as we’ll see below.

How to think about consumer activity on Facebook
As it’s grown more sophisticated as a marketing channel, Facebook has introduced a number of metrics that, aside from the ubiquitous and self-explanatory “like,” can be slightly confusing. But understanding the difference between concepts such as People Talking About This and Engaged Users is vital to grasping how performance on Facebook impacts business results.

People Talking About This counts activities that generate a story in a timeline. Examples include: liking, commenting or sharing, tagging, check-ins or rsvp’ing to an event.

On the other hand, Engaged Users, a bigger count than PTAT, includes all the nonstory-generating actions people can take. For example, clicking on a link, watching a video or clicking on a photo don’t generate stories but are important actions nonetheless. This is stuff that, mercifully, doesn’t end up in your timeline but is still valuable to brands.

PTAT is crucial because it’s a reflection of how well your content is engaging the Facebook community. It’s both an engagement and a word-of-mouth metric. But Engaged Users can be key, too. “For certain business objectives, Engaged Users may be a high priority,” said Mr. Baser, offering the hypothetical example of the entertainment marketer trying to get people to watch a movie trailer.

A recent hot-button issue has been the relationship between PTAT and likes Ad Age recently reported on research showing that only about 1% of people who like the most popular brand pages actually talk about the page. This has prompted a lot of is-the-glass-half-empty-or-half-full analyses. For some, that 1% is pathetically small; for others, it’s quite large when you consider the fan bases of the biggest brands.

Facebook, unsurprisingly, comes out in the latter camp. “When you talk about PTAT,” said Mr. Baser, “you’re talking about an explicit action to share content about your page with a friend, which is a meaningful thing to do. 1 to 3% is not all that low at all compared to click-through rate on ads and it’s at a fairly large scale. You may think it might look pretty small, but they’re meaningful numbers.”

Mr. Baser said there is no universal guideline for what the like-PTAT ratio should be. It will vary by page, industry, and a number of other factors. It’s up to brands to benchmark their performance and see how it changes over time in relationship to company activity. For instance, it’s probably best not to compare PTAT activity around a product launch or a big marketing campaign to a relative lull.

Looking for more data?
You’re in luck. Insights has an export feature that will cough up more than 1,000 additional columns of data that can’t, for obvious reasons, be supported by the user interface. This trove includes data on a number of video views over the past week or number of clicks on photos the past month. Facebook helps its larger clients understand the data, but it still hasn’t done a product guide on how to use all this information.

“Partly that’s because the export is so large at this time; we need to simplify it a little bit,” said Mr. Baser.

So, what’s next?
Part of the functionality Facebook is planning to add to Insights is granular information on how paid campaigns on Facebook are affecting pages. “We’re working on the ability to attribute actions taken on the page back to the ad campaign” he said. “We’ll be able to let brands see how many stories about your page came through the paid campaign.”

This feature is now in limited, internal testing. Mr. Baser wouldn’t say when it would be rolled out.

Facebook is giving you more information, faster. Ideally, it will allow you to be more responsive to your audience. This goes hand-in-hand with other recent moves by the social network, including the brand page redesign also announced at the Facebook Marketing Conference. That change, which enables big cover photos and the pinning of posts, has been adopted by 8 million pages in the week after the conference, according to a Facebook spokeswoman.

To show the impact, she gave some stats on Ford‘s Mustang page since it switched. Its total daily reach increased 17%, its Daily Page Engaged Users increased 30% and its daily People Talking About This shot up by 53%.

Ad Age Digital

Facebook’s New Business Pages Means Marketers Must Evolve

From a ‘Tabs’ Mindset to ‘Timeline’ Means Marketers Need More Engaging Content

 

The new Facebook Business Page is not only a visual transformation of the site, it is a game changer for the marketing function. The fact that Facebook will automatically transition existing business pages to the new format over the next thirty days means that marketers will have no choice but to evolve from the static “tabs” mindset to a “Timeline” mindset based on continually fresh, engaging, and authentic content.

As part of the redesign, the company has effectively shelved Facebook tabs as default landing pages, a strategy which many large corporations, small businesses, and social marketers had spent time, energy, and significant budget building out. These default tabs, while effective in certain cases for driving “likes” and other calls to action, were essentially landing pages like what you see on traditional websites.

Never content to settle for the status quo, Facebook is shaking things up by moving to a timeline design. While specific posts can be “pinned” to the top of the page, these get automatically unpinned after seven days. The idea is that continually fresh content will engage fans — that the best way to drive fan engagement is to make marketers more engaged and having to post, monitor, and respond more often on their Business Pages.

This is good news for both fans and marketers. Facebook tabs provided a false sense of progress that marketers were “going social.” In fact, tabs are basically just old website marketing elements grafted onto the social web. Most tab interactions do not get broadcast to news feed. The tab might look different depending on whether you have “liked” the Page (fan-gating) but that is not a very customized and personalized experience that establishes emotional connection with the brand.

Indeed, the vision of Facebook has never been to serve as yet another medium for brand advertisements. Facebook is the place where friends have conversations with friends, and conversations are ever-changing. Sometimes, those conversations are with brands. Other times, the conversations are about brands. Businesses which are best at telling stories and creating emotional connection with fans get talked with and talked about the most. It’s that simple.

By eliminating fan-gating and no longer making it possible to apply old marketing tricks to the new medium, Facebook is issuing a challenge to all marketers: be yourself, stay in touch, tell your stories in authentic and engaging ways.

This begs the question: how do businesses come across as authentic and engaging? The key is to appeal to the issues, passions, and pain points that matter most to fans by getting highly targeted and local. Local mom and pop stores have a leg up here, but even large national and multinational brands can achieve this if they can “think global and act local.” Each country, each region, even at the store level, there is a unique history and rich set of stories which can be told to reinforce the brand and even drive calls to action while maintaining a unique and authentic local voice.

Take Farmers Insurance, for example. There are plenty of wonderful stories, contests, and educational resources (such as for fire safety and saving for retirement) which can be shared on the corporate Business Page, but they have actually quantified a 6X increase in engagement level as measured by likes, comments, and shares, when these stories are shared on at the local level — even more so when you get into posting events, celebrating specific team members, and sharing any news that is “hyper-local.”

These are the kinds of brand interactions that will thrive in the new Facebook environment and the kind of content Facebook users will find interesting and thereby remember as the old guard of tabs are finally put to rest.

The Internet disintermediated a human touch from many transactions, which is perfectly fine for highly commoditized products. I’m excited to see how the growing richness of social media engagement such as timeline stories are re-intermediating this sense of emotional connection and human touch. I have no doubt marketers will rise to the occasion and quickly realize this sea change in social marketing is actually an opportunity of a lifetime to transform our brands with authentic conversations and customer relationships at scale.

Ad Age Digital

 

Facebook drops 21 points on latest US NPS versus last year

Interesting to note Facebook, despite its much-hyped initial public offering, lost 21 points compared to last year’s benchmark, dropping to a NPS of 31%

7 banks had more detractors than promoters

Virgin America beats last year’s winner Jet Blue

Surprise, surprise, Apple tops technology

Amazon dominates online shopping

Internet service providers tied with health insurers to earn the lowest sector average NPS

USAA, Amazon.com, Costco, Virgin America, Apple, Trader Joe’s & Wegmans, Among the Highest in Customer Loyalty in the 2012 Satmetrix Net Promoter® Benchmark Study

SAN MATEO, Calif., — March 14, 2012 — Satmetrix, the Net Promoter® software company and leader in customer experience programs, today released its 2012 Net Promoter Industry Benchmarks for the financial services, insurance, online services, retailing, technology, telecommunications, and travel & hospitality industries. This year’s study was expanded to reach more than 30,000 U.S. consumers, with ratings for more than 200 brands across 22 industry sectors. This year’s study includes new coverage for auto service and repair, drug stores and pharmacies, hardware and home supply stores, hotels, and travel websites. Winners included admired brands such as USAA, Amazon.com, Costco, Virgin America, Apple, Trader Joe’s & Wegmans.

The Satmetrix Net Promoter Benchmarks are based on survey responses from U.S. consumers nationwide who rate their experience with the primary brands they use. The Net Promoter Score, or NPS®, for each brand is based on customers’ likelihood to recommend the company’s product or service in the sector being rated. NPS is calculated as the percentage of customers who are promoters, rating the company 9 or 10 on a zero-to-ten point scale, minus the percentage who are detractors, rating 6 or lower. Consumers also rate each brand on various aspects of customer experience, including product or service features, customer service and overall value, enabling Satmetrix to analyze drivers of loyalty and recommendation.

“Net Promoter has become the industry standard for customer experience management because it correlates strongly with organic growth in most industries,” said Deborah Eastman, general manager of consulting at Satmetrix. “The annual benchmark is an important guidepost for executives to understand which brands are truly winning the loyalty of American consumers. It also presents a challenge to many companies, to understand how they can be more effective at listening to the voice of their customers and delivering experiences that are worthy of recommendation.”

The study encompassed 22 specific competitive sectors across seven major industry groups. Highlights include:

  • Financial Services: USAA’s direct banking operation led the banking sector again this year with an NPS of 83%, the highest NPS recorded across all brands and industry sectors. Seven banks had more detractors than promoters, with the Wachovia brand (acquired in 2009 by Wells Fargo) trailing the list with an NPS of negative 15%. In the brokerage and investment category, Scottrade moved into the top spot at 54% thanks to a combination of low cost, ease of use, and responsive customer service. Among major credit card issuers, American Express (43%) was in top position for the fifth year, having maintained this lead through the financial downturn, despite sector-wide tightening of consumer credit.

 

  • Insurance: The insurance industry was marked by some of the lowest and highest customer loyalty performance, depending on the line of business and company. USAA dominated both the auto insurance sector at 74% and homeowners insurance at 71%. By contrast, most major health insurers had nearly as many detractors as promoters, tallying up an industry average NPS of just 4% (0% if sector leader Kaiser Permanente is not included). Kaiser Permanente stood out again this year with an NPS of 33% thanks to its innovative business model combining insurance coverage with healthcare delivery in one coordinated service. For life insurance, State Farm led again this year at 28%.
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  • Travel and Hospitality: This industry group had the largest number of new additions to the study in 2012. For airlines, newcomer Virgin America captured the top spot with an NPS of 66%, followed closely by last year’s winner, JetBlue Airways at 64%. American Airlines trailed the sector at negative 5%. In the newly introduced hotel sector, Marriott (56%) and Hilton (55%) led with scores more than 60 points ahead of sector laggard Motel 6. Among the travel websites profiled this year, only TripAdvisor showed a significant differential in its experience, benefitting from its unique hub of consumer reviews combined with travel booking functions to garner an NPS of 33%.
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  • Technology: Apple’s loyalty performance matched its financial performance in the technology sector this year, again leading in the computer hardware sector with an NPS of 71%. The company also performed well for its consumer software applications, scoring an NPS of 68%.
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  • Online Services: In the category of online search and information websites, Google led again this year with an NPS of 56%. Facebook, despite its much-hyped initial public offering, lost 21 points compared to last year’s benchmark, dropping to a NPS of 31%. Among online shopping websites, Amazon.com delivered again this year with an NPS of 76%, placing it second among all brands profiled in the study, just behind USAA’s direct banking operation.
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  • Retail: Three new retailing sectors were added this year. Auto glass repair specialist Safelite AutoGlass led the new auto service and repair sector with an NPS of 48%, outpacing second place provider Goodyear by more than 25 points. In the drug store and pharmacy sector, Walmart Pharmacy led with an NPS of 40%, while home improvement chain Lowe’s led among hardware and home supply retailers at 54%. Specialty grocers earned some of the highest Net Promoter Scores in the overall study, with Trader Joe’s and Wegmans tied at 73% in the grocery and supermarkets sector. Among major department, wholesale, and specialty retailers Costco took top honors again this year with an NPS of 71%. New additions Belk and Nordstrom also did well, both earning an NPS of 66%. Echoing its financial woes, Sears trailed among department stores with an NPS of 35%.
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  • Telecommunications: Most telecommunication providers continued to struggle with low customer loyalty ratings. Internet service providers tied with health insurers to earn the lowest sector average NPS at just 4%. But it was Internet provider Mediacom that lagged all 202 brands in the study, with a Net Promoter Score of negative 21%. The company’s customers cited poor customer service and price increases as common issues. Verizon, the highest scoring Internet service provider, had an NPS of just 18%. Verizon did better in cable & satellite TV service increasing its score to 37%, up 9 points over last year and placing it in top position. U.S. Cellular (38%) bumped Metro PCS from the top spot in the cellular phone service sector while T-Mobile slipped to last position at 8% amid the failed merger attempt with rival AT&T.
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     www.netpromoter.com

     

    BEYOND ADVOCATE REVIEWS: 7 WAYS TO TURN ADVOCATES INTO A POWERFUL MARKETING FORCE

    Getting Advocates to write positive reviews is an effective way to leverage your enthusiastic customers. But reviews aren’t the only way to activate Advocates. In fact, getting Advocates to write reviews is just the tip of the advocacy iceberg.

    Here are seven ways that companies are currently leveraging their Advocates in addition to Advocate reviews. They’re enabling Advocates to:

    1.  Create glowing stories. YouSendIt, a business content collaboration service, generated 4,000 highly positive stories in three weeks. These stories increase engagement and build credibility. By attaching promotional offers to the stories, you can also generate sales and revenues.
    2.  Answer prospects’ questions. Advocates are eager to answer prospects’ questions. They’ll happily tell prospects about why your products and services are better. Ooma, a VoIP company, is getting a 25% sales conversion rate from its Advocate answers program. This approach is very effective for B2B’s and other companies that sells products and services where prospects ask others before buying.
    3. Share promotional offers with their social networks. Parallels, which enables Apple users to run Windows software on Macs, is getting an eye-popping 21% sales conversion rate from Advocate-shared offers. This is about 10X to 20X higher than standard online sales conversions rates.
    4. Boost sales for value-added services. 24 Hour Fitness is mobilizing its Advocates to build awareness and sales for revenue-generating services like personal training, group exercise classes, and more.
    5. Launch new products. Jarden Home Brands is leveraging its Advocates to launch a new automatic jam maker. They’re giving Advocates the new jam maker and encouraging them to write stories and reviews about the new product. On the B2B front, NetApp mobilized its Advocates to build buzz for a new product.
    6. Boost membership in customer clubs. Rubio’s Fresh Mexican Grill is finding thatleveraging Advocates is the most effective way to get customers to join Rubio’s Beach Club. A stunning 51% of Advocates’ friends joined the club after getting invitations from Advocates.
    7. Defend you from Detractors. Today, nearly all companies – including yours – can become social media roadkill. NetFlix, P&G, the Gap, Comcast, and Domino’s are just a few of the companies whose reputations and sales have suffered from social media ambushes. Your Advocates will rush to your defense and protect your cherished reputation. (Of course, this assumes you’ve created an Advocate Army.)

    Advocate marketing isn’t only about reviews. It’s about creating a powerful and sustainable Advocate marketing force. This marketing force will support, promote, and defend your company, brand, and products in multiple ways and over many years.

    “A review created by an Advocate is only one manifestation of advocacy,” says Lauren McCadney, head of social media at online IT retailer CDW.  “This is just the start of a relationship with Advocates, not the end,” says McCadney.

    Read more Brand Advocacy success stories by downloading, “Turning Your Customers into a Powerful Marketing Force.”

    Rob Fuggetta, Founder/CEO, Zuberance

      As Founder and CEO of Zuberance, Rob Fuggetta is the driving force behind Zuberance’s vision and strategy.

     

    Arthur C. Clarke Predicts the iPad in 1968

    “When an idea is served up from behind the scenes, your neural circuitry has been working on it for hours or days or years, consolidating information and trying out new combinations.”


    Arthur C. Clarke Predicts the iPad in 1968

     

    Unpacking humanity’s collective conscience through ‘the last word in man’s quest for perfect communications.’

    In 1964, legendary science fiction writer, inventor, and futurist Arthur C. Clarke predicted the future with astounding accuracy, presaging everything from telecommuting to the digital convergence. It turns out he predicted the future in even more granular detail in his 1968 novel-turned-Kubrick-classic 2001 A Space Odyssey, where in Chapter 9 he describes the “newspad” — a strikingly prescient vision for the iPad.

    When [Floyd] had tired of official reports, memoranda and minutes, he would plug his foolscap-sized Newspad into the ship’s information circuit and scan the latest reports from Earth. One by one, he would conjure up the world’s major electronic papers. He knew the codes of the more important ones by heart and had no need to consult the list on the back of his pad. Switching to the display’s short-term memory, he would hold the front page while he searched the headlines and noted the items that interested him.

    Each had its own two-digit reference. When he punched that, a postage-sized rectangle would expand till it neatly filled the screen and he could read it with comfort. When he finished he could flash back to the complete page and select a new subject for detailed examination.

    Floyd sometimes wondered if the Newspad, and the fantastic technology behind it, was the last word in man’s quest for perfect communications. Here he was, far out in space, speeding away from Earth at thousands of miles an hour, yet in a few milliseconds he could see the headlines of any newspaper he pleased. (That very word “newspaper,” of course, was an anachronistic hangover into the age of electronics.) The text was updated automatically on every hour; even if one read only the English versions, one could spend an entire lifetime doing nothing but absorbing the ever-changing flow of information from the news satellites.”

    The iPad was released in 2010, two years after Clarke’s death.

    The past, of course, has a long history of envisioning the future and presaging its inventions — which is to be expected in a culture ofcombinatorial creativity where ideas build upon other ideas. As neuroscientist David Eagleman reminds us in the excellent Incognito: The Secret Lives of the Brain, one of the 11 best psychology books of 2011:

    When an idea is served up from behind the scenes, your neural circuitry has been working on it for hours or days or years, consolidating information and trying out new combinations.”

    What is true of a single human brain is no doubt true of humanity’s networked collective conscience.

     Maria Popova

     

    THREE SURPRISING FACTS ABOUT BRAND ADVOCATES (Infographic from Zuberance)


    Brand Advocates – consumers and business buyers who frequently recommend brands and products without being paid – are highly trusted and influential. Their recommendations drive trillions of dollars of purchase decisions for everything from cars to computers, fish tacos to fitness memberships, software to smart phones. Now, a new study sponsored by Zuberance has revealed three surprising findings about Brand Advocates.

    This study provides further evidence about the power and influence of Brand Advocates.The message in the data is clear for B2C and B2B marketers: find and activate your Advocates now to generate more recommendations, referrals, and revenues.

    Download the full report here.