Are Your CPG Brands Maximizing the Return on Your Digital Investment?

October 2, 2012

22

Who we are

John LaRoccaVice President, Media SolutionsdunnhumbyUSA

Judy BaharySr. Vice President, Agency & CPG Market SolutionscomScore

Ryan KrennSenior Manager, CPG Digital Marketing SolutionsAccenture Interactive

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About our companies

dunnhumby is the leader in personalizing the world’s experience of retailers and brands. We help companies put the customer at the center of every decision by using our insight to improve customers’ experiences and communications to earn their lifetime loyalty..

Accenture is a management consulting, technology services and outsourcing company, which has offices and operations in more than 200 cities in 54 countries.

comScore is a global leader in measuring the digital world and preferred source of digital business analytics.

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Agenda

Background: The Need for this Study

Research Methodology

Findings

Key Takeaways

Future Research

55

The need for this study

Effectiveness of CPG websites is a mystery– CPGs invest millions in brand websites and social media, yet struggle to show how they

influence sales

Little is known on what works online– Digital agencies are always coming up with new ideas and recommendations for CPG

websites, but little is known about what works

Gap between web and in-store sales– Web analytics & online panels measure browsing leading to an online purchase– Most CPG purchases are made offline - gap between site visits and offline purchase

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Research objectives

Do consumers visiting a brand’s

website buy more than non-visitors?

Where are brand buyers

spending their time online?

What website features drive in-

store sales?

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Integrating data sources

1 MillionUS Internet Users

60 Million Households

Advertising Exposure

UPC Scan Data

Website Visiting & Search

Online Transactions

Video

Loyalty CardSingle-source,

privacy protected

data linking online

activities and

in-store buying

behavior

at the HH level.

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Accenture Web Evaluator (AWE)52 metrics scored with benchmarking for 350+ leading global sites

BrandingClear “welcome to brand” contentCompelling brand propositionConsistent message onsiteClarity of message

Engagement Surveys, demos, live chat, tools,

tutorials to interactively engage Downloads - apps, audio, video,

buying or ‘how-to’ guides, games Contest, sweepstake, promotions

GlobalizationEasy switch to other countriesLocal language content &

currency, customer serviceConsistent look & feel across

languages & countries

Relationship BuildingLoyalty program, CRMPersonalization & customizationLogin registration provides custom

content, news, games, product recommendations, saved basket

Link navigation, call-to-actionSimple menus, fast load timesUser driven intuitive navigationSite mapsMultiple integrated routes

Navigation

Daily refreshed contentProduct comparison featureRatings, reviews, product benefitsProduct selection featuresSeparate product & corporate info

Information

Instructions, manuals, recipesEffective self help, demos, FAQsService via email, chat, phoneAllow feedback via reviews,

surveys, forums

Service CommerceEasy, secure purchaseClear pricing & promotion infoAccessories & related productsOmni-channel on+offline - returnStore locator

SocialPopular social featuresActive community posts & UGCBrand participation with lively

discussions, deep knowledgePromotional events Nike+ 10K run

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Research methodology

Examined 10 food & beverage + household product brands: – Between $40 million and $3 billion in annual sales– 5%+ household buyer penetration– Between 100,000 and 2.3 million unique site visitors a month

Study period: September 2010 - February 2011

For confidentiality, individual brand results cannot be disclosed

Represent a wide range of website and buyer behaviors

Findings presented to the FMI and GMA (joint sponsors of the research)

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10

Findings

1111

Most CPG brand websites attract relatively few visitors

Under 100 100-199 200-299 300+

64%

24%

4% 8%

Websites of 25 Largest CPG Brands(Defined By Buyer Penetration)

No. of Monthly Unique Visitors (000)Source: comScore, 2011

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Some CPG websites drive incremental in-store spending

On average, website visitors spend 37% more than non-visitors …

but one brand achieves a 105% incremental spend from visitors vs. non-visitors

For 20% of brands, web site visitors bought LESS THAN non-visitors. What does that say about the quality of the online experience?

High

Low

Average

205

83

137

Brand Spend

1313

High

Low

Average

102

71

92

Brand Price/Unit

Website visitors pay less per unit than non-visitors

On average, website visitors pay 8% less per unit than non-visitors … couponing strategy?

but some marketers earn 2% higher unit price from visitors using brand value messaging

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Engagement does not translate to exclusivity

Website visitors spend 53% more in the category than non-visitors …

and purchase 58% more units in the category

Series1

$6.86

$4.83

Visitors Non-Visitors

Series1

6.4

4.5

Visitors Non-Visitors

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BRAND X Baseline

Annual Website Visitors 5,979,041

Incremental sales per HH/Year $8.64

Incremental sales per Year $51,658,914

Est. Contribution Margin 30%

Incremental Margin per Year $15,497,674

Illustrative case for CPG digital marketing

Internet ROI Study results

Value of one Brand

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Features of CPG brand sites

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Web site features that drive traffic, engagement, and sales

BUYER INDEX  Time on Siteper Month As time on site increases, brand purchase in store increases

What Drives Time on site? • Fresh Content • Engaging experience via product ratings, sweepstakes, contests,

user generated content, recipes, video, & tools, surveys, demos, live chat, downloads - apps, audio, buying or ‘how-to’ guides, click-to-buy, and advergames

• Brand value messaging that provides reasons to buy brand

Philanthropic Mission

Presence of social cause on the brand site increases likelihood of in store brand purchase

Content Scroll More content on the brand site increases brand purchase in store

Which CPG web site features maximize off-line sales?

Business impact: Marketers need to generate a constant stream of fresh content in all channels to keep consumer attention and increase purchases.

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Who is doing it right?Product Ratings & Reviews (Video)

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Who is doing it right?

Printable Coupons

eNewsletter Program Signup

2020

Who is doing it right?Gamification

2121

Who is doing it right?

Click-to-Buy

2222

This is a BIG opportunity to drive engagement with the brand!

Illustrative case for CPG digital marketingWhat if Brand “doubled” traffic and engagement?

BRAND X Baseline AfterAnnual Website Visitors* 5,979,041 11,958,082

Incremental sales per Year $8.64 $8.64Incremental sales per Year $51,658,914 $103,317,828

Contribution Margin 30% 30%Incremental Margin per Year $15,497,674 $30,995,349

Incremental annual margin from digital brand experiences that create consumer engagement deliver rich experiences generate awareness engender an emotional connection to brand

margin +$15.5 million

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5 Key Takeaways

1. CPGs have significant potential to build engagement and preference

2. Most miss this opportunity because too few consumers visit their site

3. A few CPGs have online experiences that generate incremental sales

4. Requires fresh content and a clear call to action

5. Integration of online and in-store data needed to measure the impact of digital for CPGs

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Future Research: Brand websites vs. social networks

Brand WebsitesSocial Media

Fans Friends of Fans

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Are Facebook fans responsive to the messaging?

Total Internet Brand X Fans

2%

6%

BrandX.com Visitation

10%

90%

Facebook Activity

Commented on or "Liked" a post by Brand X

Did not respond to any of Brand X's messaging

Evaluate Facebook activity including commenting or “liking” a post

Look at online behavior of exposed fans: do they visit your website?

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Are fans & friends of fans more valuable?

Spend per Household for Brand X and the Category

Look at offline spending of fans, friends of fans and non-fans Compare fan spend to brand website spend

Brand Spend/HH Category Spend/HH

$8.52

$19.96

$6.80

$17.32

$5.23

$10.55 Brand X FanFriend of FanNon FanBrand X Friend of Fan

Non Fan or Non Friends

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Who is visiting your brand site and who are your Facebook fans?

Compare the demographics of your website visitors and Facebook Fans to total Internet composition

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Females Males

52% 48%60%

40%65%

35%

GenderTotal Internet BrandX.com Visitors Brand X Fans

Hispanic African American

12% 10%16% 10%22%

11%

EthnicityTotal Internet BrandX.com Visitors Brand X Fans

55+

45-54

35-44

25-34

18-24

< 18

14%

9%

18%

31%

20%

8%

20%

13%

16%

25%

14%

12%

23%

16%

16%

15%

11%

19%

Age

Total Internet

BrandX.com Visitors

Brand X Fans

2828

Thank You!Ryan Krenn(414) 698-8523ryan.t.krenn@accenture.com

Judy Bahary(312) 775-8836 JBahary@comscore.com

John LaRocca(513) 632-0613 John.LaRocca@us.dunnhumby.com

Accenture

comScore

dunnhumbyUSA

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Appendix

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Web site features that drive traffic, engagement, and sales

Buyer Index Importance  

Time month 69% As time on site increases, brand purchase in store increases

Philanthropic Mission 10% Presence of social cause on the brand site

increases likelihood of in store brand purchase

Content Scroll 7% More content on the brand site increases brand purchase in store

86%

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Web site features that drive traffic, engagement, and sales

Time Per Month Importance  

Fresh Content 74% More content refresh increases time spent on brand site (seasonal / monthly)

Promotion 8% Presence of brand value messaging (reasons to buy brand), increases time on site

Value Add Tools 4% Product ratings, user generated content, recipes, video, and tools increase time on site

Buy Online 4% Presence of a click to buy features increases time spent on site

90%