Commentary
CPG, Search, & Circular Logic
- by Rob Griffin , October 5, 2009
It blows my mind, because when you break it down, search can help CPG advertisers sell products and act as an extension of their overarching communications and media strategies. Yes, their products are purchased offline, but as an industry we have all shown proof positive this works.
But I still get the "I'd just rather buy more TV" -- because it's safe. Many do want to define engagement and the goal of their site, which is good, but you go in circles setting up metrics to optimize against -- only to hear "it doesn't mean they bought my product."
Come on, people, it's time to push the envelope and realize there is no standardized approach across products and categories. As Avinash Kaushik writes in a recent blog post on tracking offline conversions, "engagement is such an utterly unique feeling for each website that it will almost always have a unique definition." But that still doesn't mean that using search won't make sense.
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Google has CPG research surveys aplenty that shows top search ranking increases all the brand metrics: top-of-mind awareness, unaided recall, and aided recall. Then you can layer in additional data points that we see in our research, showing that for brands with high awareness, click-through rates spike when they run TV; for brands with lower awareness, search impressions spike as a result of TV. So using TV is driving interest: consumers are trying to interact with desired brands and products. Not having visibility here is a crime -- so plan and budget for search appropriately.
We all know the lift in search performance for users previously exposed to display ads. But it gets better: we have found that when you dig into the spikes, there is a strong variation between branded versus non-branded keywords. Google-branded keywords drove over 30% more site activities when users were exposed to display (Bing saw over a 40% lift). Makes sense, but what's really interesting is that Google has almost a 20% lift for non-branded keywords (Bing was single digits and Yahoo was slightly negative). I find the spike in site activities from the non-branded keywords even more exciting, because it means the combined advertising effort is breaking through the clutter and creating interest in my clients' products -- and we are stealing search share from the competition as a result. We can even segment this further and look at unique visitors (are we driving new customers) and visitation frequency (are we reaching loyalists). It's still a tough sell, though, because many CPGs can't immediately get their hands around this.
This isn't complicated, but it does take time to organize, execute, and analyze to find the right balance. I just wish more CPG advertisers would bite, as this is awesome stuff. That said, I do think we can better prove that search can help CPGs sell products offline and better help define the purpose of their Web sites. All you need is a fairly simple exit survey that can sort by campaign and leverage some basic regression analysis to get an indication of what the site should be and what the resulting intent to purchase levels are. What's hard is, many advertisers still seem unwilling to go here.
The cry for proof has always been the hold-up, but with smart insight and analysis we have that - - so, no more circular logic. Besides Avinash Kaushik's insightful discussion on offline sales, you should also check his recent blog post on brand measurement analytics. But if you don't want to take my word or believe what Kaushik says, you have to believe MC Hammer. Check out Hammer on Analytics -- now you know this is serious.
At the end of the day, many CPG products have low price points and live in a cluttered, competitive landscape, yet are solutions to many of our daily needs and problems. The brand represents this solution and value to us as consumers. By better aligning search to the rest of the media mix, with more appropriate budgets and strategies, advertisers will only make life easier for brand advocates, while finding and creating new advocates. This will translates to offline sales. I dare any CPGs out there to work with us search specialists and give us the chance to prove it.
Anyone who reads my comments will be shocked I am defending a media channel! LOL Search is permissive. It brings value. It brings SUPERIOR value to Social Media by far. I might think Google charges too much for key word searches. When I reach a target in a more personal and powerful and engaging way I am told my price is high! And yet I charge less than 10% of most high value key words per contact. So Google helps my business charging so much. But when you think of how so much media spending is wasted on the wrong demographics, search does help reduce wastage. For a CPG company to be happy with TV's shot gun scatter approach where you pay for half the viewers who will never be customers and no proof someone even watched your commercial I can't see having any sort of objection to spending on search. Search blows away Banner Ads.
Now this all being said if it was my budget I would spend more money at Point of Sale in the Supermarket or Store because in my view 90% of the decision to buy is made then and based on price. Plenty of people make a brand choice switch based on the 'special of the week' combining coupons and reward card specials. Spend your money there!
Great point of view and I completely agree. I've used the exact Google research to show CPG clients why paid search is critical to their online campaigns. So far there has been a lot of success--and yes, I can see why non-branded terms work well. Non-branded terms can enable a CPG to be a real solution or answer to a consumer's search, resulting in extended awareness.
This is a great post and a very worthwhile discussion. But I think that the objectives of TV and search need to be clarified because I do not think that CPG companies are being ignorant in still believing in TV.
Take potato chips for example - something I was researching last week and is top of mind for me -- there are 300,000 searches per month for the keyword "potato chips". Assume that a CPG company buys their way to the top and optimizes their creative enough to get a 20% click rate; that means they get 60,000 people per month to their site.
Frito Lay is part of PepsiCo and represents 30% of Pepsico's sales (according to Hoovers). PepsiCo is a $100B company.
Yes, it would be great for Frito Lay to want to get 60,000 interested people to their site every month, but the economics of this just don't scale to meet the demands of a $30B division of PepsiCo.
60,000 clicks per month on the keyword "potato chip" represents only $30k/month spend (Google est $0.50/click on the high end). That would not represent even a drop in the bucket. They would need to see 5-10M searches per month (@ the same 20% CTR) to register as a significant opportunity for investment worthwhile of a fraction of a percentage point share of budget.
Matthew has this one absolutely right. For CPG, scale matters bigtime.
More on that here: http://dannybrown.me/2009/03/12/the-continuum-theory-of-social-media/
It all depends on your brand's needs, though. For very specific problem-solution HBA brands like my company sells, search is both smart and affordable.
Am I missing something? Why not use that paid search to drive consumers to a microsite w/ a coupon? Sure, there will be people who end up at the microsite who don't want to hassle w/ a coupon. But, a unique coupon code could certainly help with measuring success.
I was amazed to see the lack of ads being displayed on Google for cereal and related terms. Only a few brands come up. With more and more people become concerned with their health and researching products, you would think that cereal companies would leverage the power of search.
Oh I love you all. Nothing better than fun and intelligent discussion.
Fair response on volume, Matthew McMahon from Thrivepoint, but if its only a $30k spend to enhance and make their TV work harder, I ask why the hell not? Scale has always been an issue for SEM, but companies like that should still enhance what they are doing for their brands especially with a nominal investment.
Of course brand needs vary, Tom Cunniff from Combe Incorporated, but so does the rational for using online, having a web site, or even buying an ad (TV included). As for social, that still has has similar scalability issues as SEM - - its not automated. Sure Facebook has 300mm users, but you cant tell me just buying a banner there or throwing a fanpage or app will move the needle will do the job on its own. Good to know you are smart and affordable though ;-).
I would agree, Howie Goldfarb from Sky Pulse Media, that Google does have high CPCs, but they also own the market. Such is the dynamics of supply and demand.
Im with you, Jeff Rutherford from Jeff Rutherford Media Relations and Karen Renner from VML!!
Rich Morgan from Discount Tire, the challenge for many is, IMHO, aligning the need-based query to a solutions-based copy that links to a branded-landing page. Many brands just want to buy their brand name.
Good stuff all. Keep it coming.