even as mass marketers fret over TV, they've remained loyal to print as a cost-effective advertising alternative.
But with newspapers and magazines losing their grip on younger audiences, package-goods companies find themselves in a bind. They're reluctant to follow the migration of eyeballs online, deeming the Internet not ready for prime time when it comes to their category.
The growing package-goods reliance on print-driven in part by a growing reliance on marketing-mix modeling-creates a conundrum that defies quick explanation or resolution.
Print has always been important to package-goods marketers, and it's getting more so. "The ratio [of print] has been creeping up, mainly because TV is so expensive," said one veteran package-goods marketer. "It was an 80/20 rule [TV to print]. It got to be more of a 70/30 rule."
It's also become more attractive, thanks to the the importance of fashion and service magazines in what he calls "the mention wars" among beauty and personal-care brands. "There's a lot of `scratch my back and I'll scratch yours."'
That's not among the reasons Unilever cites, but the package-goods giant boosted print's share of its measured-media budget by nearly 10 points last year to 31.3% as overall ad spending rose 0.5% to $557.9 million, according to TNS Media Intelligence.
"Our view is that print works," said Brad Simmons, VP-North American media for Unilever. "It's a visual medium. It allows us to communicate with our consumers with a little more depth than television. We've all seen the trend toward consumers controlling their media intake in television, but in print, that's something consumers have done all along, and that allows them to sit back when they're more receptive to our advertising and take it in."
It doesn't hurt, either, that magazines are showing superior return on investment. "We've done recently more [marketing mix] modeling to see what parts of our mix are really driving volume," Mr. Simmons said, "and we've seen very effective results for print."
Unilever isn't the only package-goods player spending relatively more on print. As Clorox Co. stepped up its use of marketing-mix modeling last year, its overall media spending fell 9% to $418.5 million, according to TNS, but print advertising fell more slowly, increasing its share of Clorox's media budget 1.2 points to 43.7%.
L'Oreal, as it boosted ad spending 14% last year, enlarged its already heavy print spending even faster, increasing its share of the media budget 0.1 points to 47.1% of its media outlay.
CONTRARY TO TREND
Procter & Gamble Co. bucked the trend, reducing reliance on print in its $2.7 billion media outlay by 2.1 points, to 24.4%. But that came as P&G boosted coupon distribution, primarily through its P&G BrandSaver custom freestanding insert, by double digits for the second year in a row. One reason behind the coupon surge, according to former executives, is the media impression value of FSIs, which rank behind TV and ahead of magazines in P&G's media mix.
The surge in print spending for package-goods marketers appears contrary to consumers trends. The Internet is a primary factor diverting consumers from both TV and print-and the evidence indicates print may be taking a bigger hit than TV.
The Digital Future Report, an ongoing 10-year study of 2,000 U.S. households by the Center for the Digital Future at the University of Southern California's Annenberg School, has found that the more years people have been using the Internet, the less they watch TV or read newspapers and magazines.
The impact on print media is the most devastating of all. The most recent report from the center last year found that the most experienced Internet users, those with seven or more years online, spent 30.2% less time watching TV than non-users. But experienced users turned away from print even more dramatically, spending 35.5% less time with magazines and 42.6% less time with newspapers.
For many marketers, media dollars are following that shift in attention. Spending on Internet advertising rose 21.4% last year, twice the 9.8% increase overall, according to TNS and reaching 5.2% of total media spending.
Spending by seven key household and personal-care advertisers rose even faster-29%. But once Unilever is factored out, spending by the other six actually declined. Even counting Unilever, whose online spending accounted for more than 3% of its media outlay, less than 1% of media spending industry-wide was devoted to the Internet. P&G's outlay was less than 0.5% of its total.
"There's no question consumer attention is migrating online," said Pete Blackshaw, former interactive brand manager for P&G and now chief marketing officer, Intelliseek, which tracks consumer opinions expressed about brands online. "In theory, advertising is supposed to follow attention. But we're certainly not seeing that [with package-goods companies]."
One of the reasons online advertising hasn't truly taken off in package-goods, he believes, continues to be lack of a compelling ad model, something that P&G tried to foster by launching its Future of Advertising Stakeholders Summit in 1998.
Echoing comments from package-goods marketers, he notes that much of the broad increase in online ad spending is for search, a format with great relevance for automotive marketers and several other segments but little use for marketers of package-goods and other "low-involvement" categories that consumers have little reason to research. "We're talking lather, rinse, repeat," said one marketing executive. "There's not a lot of relevant content."
A key reservation package-goods marketers express about online advertising is that consumers are more likely to view it as an intrusion, whereas many buy magazines in part for the ads. "I think we [package-goods marketers] may have soured the well with some shaky, intrusive ad models out there in the early days," Mr. Blackshaw said.
Today, the vast, if uncountable, majority of package-goods online marketing dollars go into e-mail marketing and Web sites, largely as a way to get consumers to try new products. P&G late last year sold members of a club for Cover Girl a full range of its new cosmetics line online for a limited period to help build buzz. Earlier this year, it used a viral e-mail campaign to get more than 500,000 consumers to pledge to save energy by washing their laundry in cold water to back the launch of Tide Coldwater. And both P&G's Crest and Unilever's Dove used online ads heavily to drive purchase of new products integrated into to NBC's "The Apprentice" in the past year.
But the marketers tend to rely more heavily on offline media to drive consumers to their sites and loyalty programs, such as print ads from Publicis Groupe's Leo Burnett Co. (with planning and buying from sibling Starcom MediaVest Group), for the BeingGirl.com site that supports P&G's Always and Tampax brands.
the upper hand
Even if consumers use online media as a substitute for print, package-goods marketers don't see it that way. "It has a very specific role in a brand's communications mix," said Mr. Simmons. "We don't see one as a substitute for others."
Unilever's Axe, which spent a huge-by-CPG-standards $5 million on online advertising last year, used its ads largely to tout a new online game featuring its "Pitman" character. CPG's biggest online spender also happens to have one of the youngest consumer profiles. "It's a medium that our consumer at least spends a lot of time with," said David Rubin, brand development director for Axe. "It allows you to spend more time with him. ...You can't avoid things if the consumer is doing them."
But for Unilever as a whole, print continues to have the upper hand. Mr. Simmons isn't seeing a major shift away from print use by most Unilever consumers. And if it's happening, he sees it as a problem mainly for publishers. "Certainly younger people today have many more entertainment options vying for their attention," he says, "so magazines are going to have to find ways to continue to be relevant, or there's going to continue to be erosion among that group."