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Mondelez International is going on a digital-marketing binge as the maker of Oreo and Trident finds a better return on investment online than from TV ads, executives said today at a financial conference.
The company's goal is to grow mobile and digital from about a quarter of its media budget to more than half of all spending by 2016, Mark Clouse, the company's North American president said at the annual meeting of the Consumer Analyst Group of New York, held in Boca Raton, Fla. "Digital programming has proven to drive twice the ROI of traditional TV advertising," he said.
Mondelez spent $198.7 million on measured media in 2012, the latest full year available from Kantar Media. Mondelez has been particularly aggressive on Twitter, including inking a deal late last year with the social media company to deliver "real-time marketing solutions."
Mr. Clouse pointed to Oreo as an example of the company's digital success. One recent promotion gave away free packages of new Oreo flavors to the first 20,000 people who sent a tweet to @Oreo with the hashtag #SENDMEOREO."
The brand also claims to be the No. 1 food brand on Facebook with more 35 million fans. "Does [digital] really drive sales? Absolutely," Mr. Clouse said, answering his own question. "Oreo has grown double digits two years in a row, generating over a billion in revenue in North America last year."
The company, he said, has begun applying the same strategy to its more "challenged brands," he said, such as Trident, which has suffered in recent years along with the rest of the gum category. In 2013, the brand "transformed its media mix," he said, shifting investment "away from TV to more relevant and higher returning digital, mobile, in-store and out-of-home [executions]." He attributed the strategy shift for helping Trident grow two share points in second half of the year.
The company will now apply the model to other gum brands, such as its new Sour Patch Kids gum, which is being co-branded with the Stride gum name. Mr. Clouse said the brand would be "fully supported" by digital. Before the gum's debut in January, the brand sought to build buzz online through a "digital gum hunt" in which fans were asked to "help track down the escaped Sour Patch Kids so it can catch them and turn them into gum." The program included the chance to win free packs before the gum was available in stores.
Of course, some of the Mondelez's digital campaigns also rely on at least some TV. The Oreo Twitter giveaway, for instance, was paired with a TV ad that ran during the Grammy Awards.
Other food marketers have also made significant increases in digital ad spending. General Mills, for example, has increased its digital ad budget from 8% of spending in 2008 to 17% in fiscal 2013, the company stated today. But the company still spends 79% of its budget on TV. "We've significantly increased our use of digital media and we expect this trend to continue," CEO Ken Powell said during a presentation.