Marketing is Engaging

The consumer goods industry is hearing a lot about new categories of marketing including social and digital, which are changing the traditional landscape. Mark Osborn, global lead, consumer products (CP) industry marketing at SAP, explains how marketers can use these new channels to create efficiencies.

1 How are new categories (social and digital) changing marketing?
Osborn: Consumers are more digitally connected than ever before. According to the Kleiner, Perkins, Caufield, Byers’ 2015 Internet Trends report, in 1995 there were 35 million Internet users and 80 million mobile phone users. Today, there are 2.8 billion Internet users, 5.2 billion mobile phone users and, of those, 2.1 billion are smartphone users. This rapid growth in Internet access is driving an equally rapid increase in digital consumption. For CP marketers, this is significant. Digital channel proliferation gives consumers more choice, forcing marketers to reconsider investments by media and channel type while also making it more challenging to reach consumers with relevant content in the right place at the right time. Yet, simultaneously, opportunities to engage with and learn from consumers directly is also greater, giving marketers richer insights into emerging trends, changes in consumer sentiment and behaviors that influence demand.

2 How are social and digital capabilities enabling marketers to collaborate with cross-functional stakeholders more effectively?  
Osborn: CP marketers today have more real-time access and visibility to consumer demand, engagement, sentiment and other marketing-related KPIs than ever before. Not only can marketers use this visibility to understand marketing effectiveness and further drive marketing ROI, they can also correlate this information with other enterprise data to identify potential issues, conduct root cause analysis and facilitate cross-functional collaboration with stakeholder teams in new ways. For example, a marketer might notice that low demand in a given region correlates with a recent drop in consumer sentiment. The marketer can leverage POS and syndicated data to determine that promotion execution in key markets hasn’t aligned as planned with DTC marketing campaigns, leaving consumers with a negative brand perception when the product isn’t at the shelf, or price point they expected. Armed with this information, the marketer can work with the sales team to remedy promotion execution issues, and adjust. Likewise, the marketer can predict the demand implications resulting from these issues and work with the supply chain and manufacturing teams to adjust short-term inventory and production forecasts to avoid excess inventory carrying costs.

3 How can these capabilities help marketing teams develop a better understanding of ROI for marketing spend?
Osborn: Marketing through traditional channels creates impressions, but that is not enough to measure ROI. While a marketer might be able to approximate how many consumers saw a TV ad and extrapolate a corresponding change in consumer demand during the time the ad aired, they’re unable to determine how the consumer responded without conducting qualitative consumer research. By contrast, marketing through digital and social channels creates engagement, providing immediate and ongoing feedback on whether and where consumers saw the information, how they interacted with it, whether it changed their perception of the brand, and if it influenced their decision to purchase. Correlating engagement information with measures of consumer demand by segment, region, retailer or channel, gives marketers unprecedented visibility into marketing spend effectiveness and ROI.