P&G Taking Its Marketing Back to the Store
Turns Focus to the Shelf, Emphasizing Consumer Mind-set Across Agencies
BATAVIA, Ohio (AdAge.com) -- If it doesn't work at the store, it's no longer a good marketing idea for Procter & Gamble Co., which increasingly is driving home this concept, known as "store back," with all its agencies, not just its so-called shopper-marketing shops.
Spokeswoman Martha Depenbrock said store back is meant to be "a mind-set," not another process in a company that already has plenty. But it's also clear the mind-set could have a substantial impact on process, elevating the role of shopper marketing to also become a creative gatekeeper. "It means you have to have the end in mind when you're coming up with the [marketing] idea," she said. "If it doesn't work at the store, it's a miss."
Realistically, store back is a practical idea of the moment during a recession when P&G and its largely premium-price products have had a tougher time winning consumers at the shelf. P&G's U.S. sales were down 0.7% in the just-completed fiscal year even as most rivals saw at least modest gains, and last quarter it recorded its first quarter of global organic sales growth decline in years.
It also recognizes a reality of package-goods marketing: Even P&G, which has a bigger ratio of consumer to trade marketing than most, spends at least as much on the store (trade promotion and shopper marketing combined) than on media.
Last year, P&G spent around $3.5 billion on trade promotion and shopper marketing in the U.S. and Canada, according to a person familiar with the matter, compared to $3.2 million in U.S. measured media spending, according to TNS Media Intelligence.
The move also reflects more of a shopper-marketing mind-set at the top. New CEO Bob McDonald spent the past five years running global operations, including the sales effort. One of P&G's new top global media executives, VP-Global Media and Brand Operations Dina Howell, spent the prior five years as the top corporate shopper-marketing executive.
Despite that and its scale, P&G still sometimes gets beaten by smaller, lighter-spending rivals with a sharp focus on the store shelf.
Colgate-Palmolive Co.'s SoftSoap maintained its share in the highly competitive body-wash category last year despite spending less than $5 million on measured media, according to TNS -- a fraction of spending by such behemoths as P&G's Olay, Unilever's Dove and Johnson & Johnson's Aveeno and Neutrogena. The recent launch of SoftSoap's Nutri Serum body wash added 3.9 share points for Colgate in the category to reach 12.4%, even before most consumer marketing for the brand switched on, according to Information Resources Inc., measuring the four weeks ended Sept. 6.
Keys to SoftSoap's success have been product formulation, fragrance and packaging and how they play out on the store shelf, an area where the marketing team focuses much of its time, Colgate executives said in a presentation at the HBA 2009 Global Expo and Conference Sept. 15 in New York. "Our packaging is our No. 1 touchpoint with the consumer," said Rekha Rao, marketing director-personal care for Colgate.
Front of mind
Andy Murray, CEO of Publicis Groupe shopper-marketing agency Saatchi & Saatchi X, said he sees store back elevating the role of shopper marketing at P&G and elsewhere. "It will bring more shopper-marketing insight work into the upstream ideation process," he said.
He's sometimes seen initiatives where Saatchi X "has to do some rework to make it work at the store level, and we can probably eliminate that by having better insights about the store built into the front end."
It's easy to tack on a shopper-marketing component to most ideas, such as through an adaptation of an ad that runs on in-store TV or a packaging blurb. But store back is supposed to be about ideas designed from the start to resonate with shoppers.
One example was Pampers' campaign last year that donated funds for one tetanus vaccine in developing markets for each pack of specially marked diapers sold. The "1 pack=1 vaccine" stickers on pack were easy to understand and worked on shelf.
Three of P&G's biggest traditional ad agencies -- Saatchi, Grey Global Group and Leo Burnett Co. -- have shopper-marketing shops in their networks, making the shift easier.
One issue clients frequently bring up: The brand's consumer isn't always the shopper, said Jonathan Dodd, exec VP-global director of strategy at Grey's G2. "You can play to both of those," he said, "as long as there isn't a dissonance in the messaging."
Why shopper marketing is getting more attentionPERCEIVED ROI IS UP: A 2008 report by Deloitte Consulting for the Grocery Manufacturers of America found in-store marketing ranked highest in perceived return on investment by respondents, followed by trade promotions/displays, TV advertising and interactive/web advertising.
SHOPPER-MARKETING DEPARTMENTS ON THE RISE: The Deloitte/GMA report also found rapid increases in the size of shopper-marketing departments at manufacturers, with more than 30% reporting departments of 21 people or more in 2008, up from under 10% reporting departments that size a year earlier.
CONVERGENCE WITH DIGITAL: "Search advertising is shopper marketing done online," said Andy Murray, CEO of Saatchi & Saatchi X. Meanwhile, the killer app of mobile media may yet be in the store, as more consumers use their mobile devices to scan barcodes and get product reviews, coupons or other promotional offers. For example, Unilever has tied in with Walmart for its Soundcheck program, where consumers view special performances presented by the marketer on Walmart.com and get free music downloads courtesy of the presenting Unilever brands.
CONVERGENCE OF CONSUMER AND TRADE BUDGETS: Big retailers increasingly are asking manufacturers to help foot the bill for their own consumer ad budgets through co-op advertising. Walmart has gone so far as to put out an analytical tool that suggests manufacturers put a share of their consumer marketing budgets equivalent to Walmart's share of their sales into its programs. Based on the growing number of Walmart ads featuring tags from one or more vendors, the idea is getting some traction.
CONVERGENCE OF CONSUMER AND SHOPPER RESEARCH: Increasingly, shopper and consumer research are working together in the same department and jointly informing media and communications planners, said G2 Exec VP-Strategy Director Jonathan Dodd.
RETAILERS TAKE CHARGE: Big retailers not only want manufacturers' marketing funds, they also want to tell them how to spend them. Clean-store policies increasingly are making marketers' corrugated displays a thing of the past as more and more retailers direct efforts into their own customized displays or in-store media.