P&G Online Strategy Challenges Martha Stewart

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CINCINNATI ( "Cohort management," a term that first circulated among package-goods marketers in late 2000 at
P&G's rivals Martha Stewart's Web site.
the brink of dot-com doom, came too late to the interactive party to get in on the hype.

Vigorous survivor
Yet the idea -- bundling many brands into online marketing efforts aimed at a common consumer group -- not only survived the wreckage but is producing surprising results. Procter & Gamble Co.'s HomeMadeSimple program, launched in 2000, now rivals domesticity maven Martha Stewart for consumer reach online, and such companies as Unilever, Nestle and Reckitt Benckiser are pursuing their own cohort programs.

HomeMadeSimple, a Web site and e-mail newsletter heavy on household tips and sweepstakes from five P&G cleaning brands, last year surpassed its internal goal of beating MarthaStewartOnline in unique monthly U.S. visitors.

"The thing I've preached to my team is HomeMadeSimple can be more successful than MarthaStewart," Andy Walter, director of the project, told a recent meeting of the American Marketing Association in Cincinnati. "But we will end it next month if that's all we attain. We have to sell these brands."

His research shows HomeMadeSimple is boosting purchase intent for P&G brands, but he said he won't be satisfied until he proves the project fuels sales.

Neck and neck with Martha
HomeMadeSimple is still neck and neck with Martha at just under 1.2 million Web visitors in

February, according to ComScore Networks. What's more, the number of subscribers to HomeMadeSimple's free e-mail newsletter rivals the 2.4 million paid subscribers to Martha Stewart Living magazine, said Peter Schwartz, president-CEO of Bridge, Cincinnati, the interactive agency that created HomeMadeSimple. He added that the percentage of consumers who open HomeMadeSimple e-mails are 10 times the average for such newsletters.

By any accounting, the project is reaching plenty of consumers at relatively low cost. HomeMadeSimple's only measured media last year, as reported by Taylor Nelson Sofres' CMR, was $45,000. That was most likely for a magazine ad in Time Inc.'s Real Simple for which P&G actually bartered Web and e-mail promotion for print space.

HomeMadeSimple, which started as a sponsored sub-site of in summer 2000, got additional exposure later that fall when P&G sold HomeMadeSimple cleaning kits at Target and other chains. But most of the program's marketing comes from piggybacking on other P&G marketing efforts, such as mentions in freestanding newspaper coupon inserts.

Concept of common appeal
The idea wasn't to go after an existing, identifiable consumer segment. Instead, Mr. Walter said, P&G's cleaning brands -- Cascade, Dawn, Febreze, Mr. Clean and Swiffer -- looked at their most valuable consumers and identified a common concept that would appeal to them and do the best job of selling those five brands.

"It's about creating the home you'd love to live in," he said. "It's about simplifying your life and the role that our brands play in that."

While some P&G brands such as Pampers have enough innate consumer involvement to attract consumers to stand-alone sites, Mr. Walter said low-involvement cleaning brands can't count on that. Linking Web sites to Web portals and lifestyle sites via partnerships didn't help, either, he said. What ultimately worked was offering the kinds of information for which consumers already are using the Web, he said.

Exporing partnerships
But P&G also is looking for partnerships outside the company around which it can build HomeMadeSimple.

"If you think of HomeMadeSimple as being about creating the home you live in, P&G [alone] can't fulfill it," he said. "As big as P&G is, as big as home care is, we have nothing that takes care of your lawn or helps you decorate. Every home service that you can imagine would fit into the equity of HomeMadeSimple."

Consumer cohorts can be built around seemingly unconnected brands and businesses, Mr. Walter added. P&G research found, for example, that 64% of consumers who buy lawn services also buy tax preparation services.

While offline programs can target consumer cohorts, too, Mr. Walter said: "The Internet adds significant value to the cohort concept and really allows you like no other medium to take this cohort and [bring it] to life."

Forrester cohort report
Robert Rubin, the Forrester Research analyst whose December 2000 report on cohort management raised the issue in the industry, counts HomeMadeSimple among the best cohort efforts to date. But he acknowledges he has seen few takers for the more ambitious agenda he outlined, in which brand management would fade away as the organizing principle for package-goods marketing in favor of cohort management, where all managers would market multiple brands to defined consumer clusters.

"I don't think we're headed in that direction at P&G," said Mr. Walter, who is perhaps the closest thing to a cohort manager at P&G. But Mr. Walter came from the information technology department, not marketing.

Yet cohort marketing is gaining traction. P&G has also launched S-Mag (S for Simplicity), another multi-brand online cohort venture from Northlich, Cincinnati, which includes offers from partner brands, such as Delta Air Lines, and Bridge is developing another similar P&G effort. Unilever last summer extended its Home Basics direct-mail cohort effort online with the Web site and e-mail newsletter. And Reckitt Benckiser last month launched HomeSolutionsNews, an e-mail newsletter from e-centives, Bethesda, Md., initially for Electrasol dish detergent but with potential to add other household brands.

Thinking consumer clusters
Mark Olney, vice president of Unilever's recently redubbed Relationship Marketing Innovation Center (formerly the Interactive Brand Center), said he believes cohort management will became a more important factor at many levels, noting his own unit includes managers who oversee marketing multiple brands to consumer clusters. One reason is that despite marketer interest in relationship marketing, consumers can only handle so many relationships.

"If you think of every single product sold today in the [package-goods] industry, it is highly unlikely consumers are going to have many deep relationships [with them]," he said. "They're going to be selective. ... Cohort management recognizes there's some clustering that happens to benefit the consumer."

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