Why is TV beating digital in battle for FMCG ad spend?
As reported on page 4 of the FMCG’s weekly publication, The Grocer, “TV beats web in battle for FMCG ad spend”, food and drink companies are slashing digital budgets to go back to TV. Why? Because, as the head of Premier Foods Gavin Darby recently declared, “it works”. As reported in Marketing, “We are unashamedly sticking with TV advertising and will not be shifting significant spend into digital channels.”
This is not an opportunity to bash digital but like any channel or discipline, each one works well for some areas and not so well for others. For retail and FMCG, big media – TV and outdoor – works best, which is probably why both are seeing growth.
According to Nielsen, 10 of the top 15 FMCG brands – including Coca-Cola, Kellogg’s, Nestle, Unilever and Tesco – have dramatically slashed on-line marketing spend.
Tesco currently spends over £34m on TV advertising (that excludes outdoor and press) but now only budgets 1.4m on digital advertising, less than 5% of TV spend. Is this a trend by the big brands?
Several years ago Pepsi threw it’s budgets at digital, big time, pulling it from TV and promptly lost sales. It then subsequently reversed the move.
It’s a fact that digital is now part of almost every brand’s portfolio of marketing disciplines, along with PR, sales promotion, experiential marketing and the rest. Each sector has its only balance of spend. What works for one may not work for another, each sector has different effective mix.
For some, like travel, digital has become the number one choice, with little need for big media support. For insurance the web has been a dream but almost all the big names use TV to market their brand. The reality is, FMCG brands have found their balance.
Of course, it could be argued that one of the problems isn’t the usual excuses of too much digital noise, poor targeting or brands fining it harder and harder to enter the personal space, it could be most just don’t know how to use digital properly. Anyone can write a song but it takes skill, talent and experience to write a hit, just ask Gary Barlow.
When it comes to social media, well it seems TV ads are probably the number one reason to talk about a brand, just look at John Lewis. The second is PR.
And for all the on-line chat, 80-90% of chat actually happens off-line. That too may surprise you, but in fact it’s been researched and again the media has hyped up the opposite.
TV – getting it right
A brand, if they get their message, execution and media plan right, can expect a 1:3 ROI. That’s turning media spend from a cost into a profit – far more effective than investing it in the stock market.
But just doing a TV ad is not going to deliver instant success. Like I just mentioned, writing a hit song is a skill, so is TV.
Nieslen, the industry’s leading monitor of TV ads, has some sound advice, even for seasoned advertisers. With a few of my own tips, here’s 3 keys things to remember.
• Boring, predictable, rational ads don’t work as well as funny, interesting and quirky ones. It has to emotionally engage consumers. You may only be one ad out of 6 in an ad break but you need to the one ad that stands out and gets remembered. And as the average person watches 4.5hours of TV a night, you have to be the one they recall next day. Think of your 30 seconds as 30 seconds on X-Factor, give it all you’ve got and make one hell of an impact.
• Make sure people know what the brand is. It’s amazing how many ads are recalled but the consumer can’t remember the brand, or worse, names the competition. Nielsen recommend getting the brand in in the first few seconds as well as at the end.
• Budget – you need to invest to get a return. Think big casino, not scratch cards, to get big rewards you need big stakes. TV isn’t cheap but get it right and you’ll hit the jackpot.
On-line shopping myth.
Currently, only 11.5% of retail spend is online, but the government have published an estimate of 12.5% by 2018. This may sound surprising but in reality we spend a lot of our cash out drinking, eating, having fun and in places which can’t do what they do online – like hairdressers or buying petrol. And we still spend a lot in the high street and at major retailers. Overall, 85% is spent off-line, so it’s no wonder brands are looking to target consumers where they spend – hence the growth of Proximity Marketing and Proximity Mobile Marketing (see below). It’s largely been the media that has hyped up the numbers.
A return to common sense marketing – Proximity Marketing and Mobile
Every brand wants to get closer to the consumer, or potential consumer, which is why the philosophy of Proximity Marketing and Proximity Mobile Marketing (PMM) which started in the US, is seen as the next area brands will invest in and a return to “common sense marketing,” as one US brand manager commented.
It’s all about targeting the shopper at the right time, in the right place and in the right buying mindset. And integral to that is mobile.
Mobile is certainly an area brands feel they must be embracing but before you rush out and spend all your hard fought for 2014 budget, you need to consider the difference between on-mobile marketing (push) and off-mobile marketing (pull).
83% of consumers do not like unsolicited messages, especially sales one, on their mobile. Add to that, tough data protection laws, actually targeting people effectively is quite a challenge. It’s also a very small space to try and gain any impact and let’s be honest, most of us aren’t walking about reading the ads at the bottom of apps.
By contrast, off-mobile marketing (and especially PMM) utilises big media – outdoor, and POS, events, field marketing, and anything that connects with the consumer where they shop, eat, drink, have fun and socialise. Which is of course where they are spending that 85% of spend.
The principle is simple, instead of just doing a nice poster, for example, you turn it into a vehicle for engagement, encouraging consumers to visit the brand’s website, campaign pages, etc.
Here they can get more information, download offers, content, get directions to a store… the possibilities are endless.
And with the growing number of NFC (Near Field Communications) active posters (Clear Channel have over 10,000 NFC active Adshel poster sites nationwide) and POS, consumers only need to tap their phones on a tag to active a website. Pure genius and convenience for consumers – a much smarter way to use smart phones.
A need for more honesty from agencies
As an integrated marketer, I have always taken a pragmatic view of the many channels, disciplines and techniques available to the industry. I think it’s the role of agencies to recommend what works for the client’s objectives, (once you actually define the right ones).
But constantly I see poor advice, or worse, clients steered towards areas that are going to give more profit to the agency than to the client. Ok, I may a lone ethical voice here in an industry that can often put their profits before the clients, but I do believe that if you make your client rich you get a greater reward for that.
So for 2014 I’d like to see less hype (especially from the media), more honesty and clients being a little more pragmatic about how they spend their money and not be afraid to ask, “Yeah I know it’s all the rage but will it work?” After all, how much money have big FMCG brands wasted to discover what some of us could have told them in the first place? An expensive lesson.