David's blog

I attended OMMA’s AdNets conference in NY on November 6th. The conference invited leading so-called horizontal and vertical ad networks as well as a host of luminaries from the agency and client marketing side. Here are a few notes and observations from the first half of the day:

Part 1: Morning Sessions

Samir Arora, CEO of Glam Media, spoke to the “media paradox of the Internet” to explain the rationale behind the growth of vertical media and advertising networks. Arora indicated that the Internet is the only media where there is no control over distribution. Even a major online portal such as Yahoo – with 74% reach among Web users – commands only 7% of overall Internet usage. By contrast, if you look at the top three TV networks, you’ll find they command a much larger percentage of usage.

Arora also argued that even if the Internet is not the most authoritative medium it is the most influential one, particularly for younger adults who spend more time online than watching TV. Reaching those key audience segments across the fragmented online media space, creates the need for aggregators such as vertical networks to combine audience reach in targeted categories.

Havas’ Digital Chief, Don Epperson, outlined a new “virtual brand network” that would allow the agency to plan, buy, manage and even reallocate online inventory. The virtual brand network will be powered by its Artemis system, a database management and reporting system that claims to have profiled more than a third of the world’s online user population. Epperson stressed that the system is still formative and that ‘we still have a lot to learn, but envisioned that it might evolve into a “futures” marketplace for upfront buys.

The next panel billed as a “smackdown” between horizontal and vertical ad networks suggested that media buysers are not necessarily choosing one at the expense of the other. Jocyelyn Griffing from Icon International said that higher-end marketers want more targeted busy in vertical categories while those looking for “tonnage” in impressions seek horizontal networks. In recessionary times, the panel agreed that marketers are increasingly turning to performance-related buys that focus on accountability and return on investment. Vertical networks such as Good Health Advertising and the Travel Ad Network emphasized their differences and value adds in contrast to traditional (horizontal) ad networks. For example, both vertical networks focused on the fact that because they are managing far few sites, they are able to achieve a level of custom integration and reach that was previously possible on large portals and publishers.

Next: Part Two: Afternoon Session and Commentary on the Major Themes

Links:

 OMMA AdNet

Cause-related marketing can increase sales as much as 74 percent in certain consumer-goods categories, according to a recent study by Cone and Duke University's Fuqua School of Business. In particular the study found a:

•  74 percent increase in actual purchases of a shampoo brand after it had been associated with a cause. Nearly half (47 percent) of participants who saw the cause-related message chose the brand, while only 27 percent of those who saw the generic corporate ad chose the brand.
• 28 percent increase in actual purchase for a toothpaste brand when associated with a cause. More than two-thirds (64 percent) who saw the cause message chose the target brand vs. 50 percent who viewed the generic corporate ad.

Researchers exposed participants to either a cause-related or a generic corporate ad for one of four focus brands in the toothpaste, shampoo, chips and light-bulb categories. The participants then entered a mock convenience store with nearly 150 SKUs and were given real money to purchase a product of each type.

To validate these sales increases for shampoo and toothpaste, Cone and Duke then replicated the study online among a sample of more than 1,000 adults, finding:

• Participants spent nearly twice as long reviewing cause-related ads vs. general corporate ads.
• This resulted in a sales increase (19 percent) similar to the lab study for the target toothpaste brand.
• Though the shampoo brand increased only by a modest 5 percent, sales among its target audience of women increased by nearly 14 percent.

Thus, the study revealed higher sales in two of the four categories (toothpaste and shampoo), and modest increases in the other two categories (chips and light bulbs) because of the cause-related ads.

Consumer responses demonstrated that the issue, the nonprofit organization involved with the brand, and the inherent nature of products were key factors in cause-related purchasing.

Sources & Links:

Marketing Charts

Cone

PricewaterhouseCoopers (PWC) and the Grocery Manufacturers Association (GMA) released today (August 26th) a four minute video clip entitled, "Sutainability Matters to All Stakeholders". The video focuses on consumers attitudes towards green and perceptions on sustainability.

The video supplements the recently released report by PWC and GMA on the the increasingly greening state of the food industry entitled, “The 2008 Food Beverage and Consumer Products Industry Report: Achieving Superior Financial Performance in a Challenging Economy." That report concludes that sustainability has become a business imperative that can boost corporate value.

As someone who interned for GMA for three summers during college, I can say that GMA and the food industry has come a long way (ok, it's been a long time too :-). Sure, the industry still supports GMOs and food irradiation, but their endorsement of the sustainability market underscores that it is blossomed from obscurity to maturity in a few short years.

Coca-Cola Co is working to on several prototype beverages using Chinese herbal cures. Analysts have speculated the project could be as important to the company's future as its original 1886 formula, which fused coca leaves with African kola nuts.

The secretive project involves employees throughout the company but executives have only mentioned the collaboration in a short news release issued when Coke and the China Academy of Chinese Medical Sciences opened a research center in Beijing last October.

Coke might be reluctant to talk about potential drinks inspired by Chinese medicine, but analysts have commented that whatever executives are working on could be important.

With consumers increasingly concerned about their health and wary of sugar-laden beverages, Coke is "looking for exotic herbal ingredients to make a completely new drink and sort of revolutionize the whole soft-drink industry," said Matthew Crabbe, director of Access Asia.

In October, Rhona Applebaum, a Coke vice president and the company's chief scientific and regulatory officer, said the laboratory "will ultimately help us bring the insights and benefits of Traditional Chinese Medicine, which has a history of thousands of years,  to consumers all over the world," according to a company press release.

Source: Austin American Statesmen. See article at Statesmen.com

Coca-Cola recently announced specific, strategic goals for progress in sustainability. According to Coke CEO John F. Brock. "We continue to embed CSR throughout our business [and] it is playing an increasingly important role in helping us to capture operational efficiencies, drive effectiveness, and eliminate waste."

Coke's recent sustainability document (PDF) reports the following specific goals in the areas of water stewardship, sustainable packaging, and emissions reduction.

- Water Stewardship: Coke is committed to reducing water use at its manufacturing plants by 10% by 2010. Longer term, the company aims to establish a sustainable manufacturing operation in which just one liter of water to produce each liter of product. (In 2007, Coke used 1.77 liters of water per liter of product, a 3% improvement in efficiency over the previous year.)

- Sustainable Packaging/Recycling: The company has pledged to reduce packaging material by 100,000 metric tons, or about 3% of total materials use, by 2010. Coke aims to recycle more than 90% of waste materials from production facilities by 2010. (Coke subsidiary Coca-Cola Recycling has set up recycling centers at each of the company's manufacturing facilities.) By 2010, Coke says it will increase recycled content in PET plastic bottles to an average of 10% "where commercially viable." Coke reports a "long-term" goal of recycling or reusing materials equivalent of 100% of product packaging.

- Emissions Reduction: Coke has set a short-term goals of reducing manufacturing emissions 5% from 2004 level by 2015. In 2008, Coke will calculate its carbon footprint in every country where it operates as a benchmark for setting specific, regional emissions-reduction targets. The company has also begun to "consider carbon emissions in our evaluation of capital expenditure plans," according to the report.

Download Coke's new sustainability report here (PDF).

Three out of four executives say they are willing to sacrifice at
least 1% of their salaries to fund their companies’ green initiatives,
according to an April 08 Korn/Ferry survey.

A small minority, three percent of respondents would be willing to
sacrifice upwards of 10 percent of their salaries, while about
one-quarter (27 percent) would be unwilling to sacrifice
any portion of their salary to support sustainability efforts. Almost half of executives report that their companies have
allocated existing staff, or hired new staff to support green programs.

Despite this there remains widespread belief green initiatives are not financially sustainable.
69% of the respondents believe that “green” initiatives will take a
back seat to profit-driven activities in these uncertain economic
times. Only 29% believe that the current economic situation will not
have an effect on “going green". 

The study suggests that top executives feel that both a personal and professional stake promoting in sustainability and corporate
responsibility. “Clearly, the high number of executives willing to personally
contribute to their company’s green initiatives signals a change in
thinking around the importance of sustainability today,” said Jay
Millen, senior client partner with Korn/Ferry International.

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Sources:

Korn Ferry Survey

Sustainable Life Media

 

Media and advertising are awash in "going green". Time magazine's April cover story -- featuring a green cover logo and a mashup of the famous Iwo Jima photo (in which soldiers hoist a tree instead of an America flag) -- symbolizes that a new era of green marketing has arrived.

Although this isn't the only era marketers have used the environment as a central theme, the current green wave signifies a much larger and deeper shift by consumers and producers alike. The view that green is a shift and not a fad is supported by several recent studies of marketing trends (see below), including one by eMarketer called "Green Onine: Growing Awareness", which opines that the shift and interplay between consumer and producer is being driven and played out on the Internet (with support from traditional media channels of course) to much different results.

The trend towards green is no longer the case of niche consumer groups and activists pulling reluctant corporations into making vague green claims. Sure, there are allegations of widespread "greenwashing" and there probably always will be. But there is no denying that corporations of all sizes, ranging from mega retailers, such as Wal-Mart and Home Depot, to major consumer packaged good companies, such as Unilver and Protor & Gamble, are making large investments in environmental programs that go to the core of their businesses (e.g. material sourcing, product design and manufacturing). And they are seeking to tout these investments and programs as an essential part of their corporate and product branding efforts. According to Jessica Hogue, research director, Nielsen Online, "last year was the tipping point for green marketing as a whole. Every type of company is now getting into the mix." eMarketer, May 2008.

And with today's green marketing, the Internet radically alters the playing field. Consumers who must interpret green marketing efforts are increasingly using blogs and forums to review and discuss marketers' claims.

Perhaps, more important, consumers are also integrating environmental concerns into basic purchase decisions for products and services. For instance, eMarketer found that a majority of consumers perceive themselves as green on some level and a significant number are now willing to pay extra for eco-friendly products and to support corporations they perceive as doing the right thing on the environment.

Here's some additional green online metrics that demonstrate the shift towards all things green:

• US online retailers that sent Earth Day emails in 2008:  16%. (Mail Experience Council , May 23, 2008)
• US adult online buyers who consider it very/extremely important for companies to be environmentally conscious:  60% (DoubleClick Performics, April 7, 2008)
• US adult internet users who are willing to spend more on environmentally friendly products: 57% (Accenture, November 19, 2007)
• US adult Internet users who reduced the amount of energy used in their homes:  63% (Harris Interactive, April 18. 2008)
• Green marketing as the most important marketing trend according to US marketing executives in Oct-Nov 07 poll:  32%  (Anderson Analytics, MENG Marketing Trends Survey Nov. 2007)
• US adult Internet users who viewed green advertisements “frequently” in the last three months: 45%  (Burst Media, April 2008)

Amidst the sudden media adoptions of all things green, blog subsequent entries here will report on a handful of recent studies to address to basic questions:

• How real and economically grounded is the growing green market?
• What are the risks of a consumer backlash from this over-saturation and how do companies mitigate these risks?

General Sources:

• eMarketer: "Green Onine: Growing Awareness". June 1, 2008
• Nielsen: "Who's Winning the Green Race Online". Webinar: April 1, 2008

 

 

 

Al Gore announced the “we” campaign, a $300 million effort to raise public awareness of climate change — both the problem and its potential solutions. The goal is to create bottoms-up pressure on legislators to tackle the issue.

Lots of details in the Washington Post and in Grist, so here's some brief observations and links:

• $300 million is an unprecedented amount for a public advocacy campaign. Can that really be spent on grassroots advertising? Does $$ buy a bottoms-up movement?
• By the first glimpses, the campaign is smartly trying to balance urgency with optimism and attempting to bridge political divides. That's bold. For example, it frames climate change within other national triumphs (World War II, moon landings, civil rights movement). And it tries to cross the political gulfs, by featuring commercials that pair unlikely combos like Pelosi and Gingrich, or Sharpton and Robertson.
• Check out the first ad, narrated by William H. Macy, below
• check out and sign-up wecansolveit.org

This radio interview by GreenBiz of Judah Schiller of Saatchi and Saatchi provides interesting insight on how his firm is helping to encourage Wal-Mart's employees to embrace sustainability. It offers practical tips for companies looking for ways to engage workers on sustainability and wider corporate and community responsibility initiatives.

Transcript of Interview and Links to mp3 download and iTunes

Companies are increasingly motivated to pursue corporate social responsibility (CSR) programs for growth opportunities, rather than a necessitated by public or community relations posturing, according to a new global study released recently by IBM.

Driving this shift is the unique role of the Internet in influencing buying behavior by providing easily accessible, in-depth information about companies, their global supply chain partners, and their impact on society and the environment.

To gauge how deeply CSR has penetrated the core of the corporation — it's strategies and operations, IBM surveyed more than 250 business leaders globally and found that two-thirds of them are focusing on CSR activities to create new revenue streams

Many companies now believe that putting social responsibility principles at the core of their corporate strategy will make them more competitive and able to attract/retain top talent. According to the study, 68 percent of those surveyed focused on generating revenue through CSR activities. In addition, 54 percent believe CSR initiatives contribute to giving their corporations a competitive advantage.

Driving these beliefs is the rising influence of customers who are becomming increasingly aware of a range of values and issues -- from concerns about climate change, to product safety issues, to labor practices, to community accountability.

Although customers are driving much of this increased focus on CSR, many businesses surveyed still don't feel they understand their customers' CSR concerns. Nearly two-thirds of companies surveyed believe they have sufficient information about the sources behind their products and services to satisfy customer concerns, but half of those admit they don't understand their customers CSR expectations well.