Commentary

Smartypant Clay Nichols Unveils New Acronym: CPG (It's Pretty Sticky)

It stands for cost-per-gummy and it most likely is a niche metric that relates mainly to his company’s brand SmartyPants, which markets vitamins in the form of gummies. Speaking at the Programmatic Insider Summit in Lake Tahoe this morning.

Nichols gave a fascinating case study of a successful new brand built primarily on the back of an old school marketing technique: product sampling.

“You guys pretty much saw the marketing strategy this week,” Nichols told summit attendees, “which is me handing out gummy packets.”

In fact, SmartyPants gummy packets were sprinkled on tables throughout the summit and Nichols, true to his word, button-holed attendees, handing out packets personally.

Now that might not seem like a lofty role for someone with the title vice president-brand, but it has been building a valuable brand. More importantly, it works.

Nichols explained that the product, which was only conceived by his sister 4.5 years ago and marketed out of her garage -- literally, initially began distributing via word-of-mouth on its seminal sales channel: Amazon. Not surprisingly, much of that word-of-mouth was generated by Amazon reviews, but over time, SmartyPants has moved into brick-and-mortar and has distribution deals with Walgreens, CVS, Whole Foods, Costco and others.

Still, sampling has proved its most effective -- and efficient -- marketing channel.

“I will hand out 3 million packets this year,” Nichols said, adding that the average cost-per-gummy packet distributed that way is about “four cents.” That compares with an average cost of $2 for every gummy packet distributed via "online distributors."

“Sampling is the No. 1 strategy for us,” he conceded.

Now you might wonder how a fundamentally person-to-person promotional platform of handing out samples fits into a programmatic summit discussion. As it turns out, that’s exactly how SmartyPants has amplified and accelerated -- and most importantly -- targeted its sampling initiatives.

Not surprisingly, much of SmartyPants’ sampling occurs during races and runners events, usually at a booth distributing the gummy packet samples. That’s where programmatic comes in.

Because it is a spunky startup, Nichols said his strategy was to essentially be guinea pig for any new digital marketing platform he came across, offering to make SmartyPants a testbed for demonstrating their prowess. An early success, he said, was Austin-based consumer analytics and targeting firm People Pattern, which helped SmartyPants identify the “personas” of its main consumer segments.

But the company’s big programmatic breakthrough came from two experiments. One with Maxpoint, which enabled it to geotarget consumers located around the 300 retail stores it currently distributes in. More importantly, was one it developed with Under Armour. Specifically, with its Map My Fitness app. By targeting mobile app users with SmartyPants offers and ads prior to their foot races, Nichols said the company has figured out a way to generate an even more efficient return on its CPG.
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