The Nestlé Approachto Consumer Engagement

in a Digital World

Tom BudayHead of Marketing & Consumer Communication

Nestlé S.A.

The Nestlé Approachto Consumer Engagement

in a Digital World

Tom BudayHead of Marketing & Consumer Communication

Nestlé S.A.

Part of the story

94MFans of Nestlébrands onFacebook1

3.7MAverage weekly newfans of Nestlé brandson Facebook2

+100%Growth in fans ofNestlé brands onFacebook H1 ‘12 vs.YAG

2

16MViews for Contrexvideo on YouTube,the world’s mostshared video inOct. ‘11

>50%of Nespressocapsules soldonline

43Markets usingNestlé standardlistening tools

1Through August 26; not unduplicated2July 14 – August 26

3Source: Andy Sernovitz, Hugh MacLeod

Message quality matters most in driving ROBBI1

ROBBI1

High

4

Message Quality

ROBBI1

Low High

Low

1Return on Brand Building Investment

Missing the Point?

5

Our view

• Platforms don’t ‘work’ (or not)

• Brand campaigns andmessages do

• Platforms don’t ‘work’ (or not)

• Brand campaigns andmessages do

6

Message quality matters now more than ever

ROBBI

High

2002

2012Social platforms andconsumer sharing of brand

content, powered bytechnology

7

Message Quality

ROBBI

Low High

Low

Consumer avoidanceand rejection,powered by technology

The Nestlé Way

Minimize avoidance and rejectionMinimize avoidance and rejection

Maximize impact, sociability and sharingMaximize impact, sociability and sharing

8

Maximize impact, sociability and sharingMaximize impact, sociability and sharing

Do it consistently, at scaleDo it consistently, at scale

Maximizing impact - Nestlé TV copy effectiveness

Base: All Nestlé aired ads 2009 (141 ads), 2010 (227), 2011 (151) and YTD June 2012 (59).Numbers shown are percentage of ads scoring in the top quartile of Ipsos/Millward Browndatabase of all tested ads.

A large proportion of viral viewing is predictablebased on creative power

r = 0.63Vi

ews p

er w

eek (

index

of Lo

gged

) 120

110

130

10

Creative Viral Potential

View

s per

wee

k (ind

ex of

Logg

ed)

Source: Creative determinants of viral video viewing, Duncan Southgate, Nikki Westoby and Graham Page, Millward Brown,Published in International Journal of Advertising, July 2010

100

90

80

80 90 100 110 120 130

2012 all advertisers WARC Effie Effectiveness Index

2012 food advertisers WARC Effie Effectiveness Index

Scaling impact capability

Scaling impact capabilityGerber

NescaféDolce Gusto

Milo

NescaféDolce Gusto

Perrier

Guigoz

Nescafé

Maximizing sociability

1515

Do’sDo’s Don’tsDon’ts Overuse cow puns – a few ‘’get moovin’’ references are ok, but stay

away from referring to my Mavens as a ‘herd’ or any other cowstuff. (Use these sparingly – less than 5% of the time)

Give specifics around where I live or my family. Sometimes Mavenswill want to know what pasture I live in or what my family is like. Ijust respond vaguely with something like – ‘’I couldn’t love my digsmore’’ or ‘’I <3 my family, thanks for asking.’’

Initiate or participate in any conversation involving religion, politicsor sexual subjects. Everyone has their own beliefs and I like to stayneutral.

Publicly promise a Maven anything. Other Mavens will feel left outand ask for whatever you’re giving out and it could spiral out ofcontrol. If you want to give a coupon or anything else to a Maven,do it privately and directly.

Insult anyone, even jokingly. Avoid using any vulgar or offensiveslang talking.

Coach or tell my Mavens what to do.

Thank Mavens for wonderful,positive posts

Acknowledge Mavens by theirfirst name when responding

Sign off using my signature:‘’xoxo~Skinny.’’

Scaling sociability

Overuse cow puns – a few ‘’get moovin’’ references are ok, but stayaway from referring to my Mavens as a ‘herd’ or any other cowstuff. (Use these sparingly – less than 5% of the time)

Give specifics around where I live or my family. Sometimes Mavenswill want to know what pasture I live in or what my family is like. Ijust respond vaguely with something like – ‘’I couldn’t love my digsmore’’ or ‘’I <3 my family, thanks for asking.’’

Initiate or participate in any conversation involving religion, politicsor sexual subjects. Everyone has their own beliefs and I like to stayneutral.

Publicly promise a Maven anything. Other Mavens will feel left outand ask for whatever you’re giving out and it could spiral out ofcontrol. If you want to give a coupon or anything else to a Maven,do it privately and directly.

Insult anyone, even jokingly. Avoid using any vulgar or offensiveslang talking.

Coach or tell my Mavens what to do.

16

Sociability framework well applied

17

The benefits of sociability

Impressions ('000) Proportion of Total ImpressionsPaid 364,733 65.6%

Owned 167,460 30.1%Earned 23,723 4.3%Total 555,916 100.0%

18

Impressions ('000) Proportion of Total ImpressionsPaid 364,733 65.6%

Owned 167,460 30.1%Earned 23,723 4.3%Total 555,916 100.0%

Note: contact points include TV, Facebook, and search. Data are for H1 2012

• No Paid Media Support• Reach 85,034• Engaged users 4,675• PTAT 3,804• Success drivers:

imagery, succinctmessaging, timeliness(St. Patty’s day)

Sociability in action

• No Paid Media Support• Reach 85,034• Engaged users 4,675• PTAT 3,804• Success drivers:

imagery, succinctmessaging, timeliness(St. Patty’s day)

• Paid media support• Reach 286,636

• Paid 222,821• Organic 89,614• Earned 20,137

• Engaged users 7,863• PTAT 3,827• Success drivers: effective use

of paid media to increase reachand engagement. Great imageand copy; simple and to thepoint.

Sociability in action

• Paid media support• Reach 286,636

• Paid 222,821• Organic 89,614• Earned 20,137

• Engaged users 7,863• PTAT 3,827• Success drivers: effective use

of paid media to increase reachand engagement. Great imageand copy; simple and to thepoint.

Skinny Cow – Retail Dollar Sales - US

15

20

25

30

TOTAL SKINNY COW - US (xAOC+C-Store) Dollar Trends (Millions)

21

Copyright © 2011 The Nielsen Company. Confidential and proprietary.

0

5

10

15

4W END 01/28/12 4W END 02/25/12 4W END 03/24/12 4W END 04/21/12 4W END 05/19/12 4W END 06/16/12 4W END 07/14/12 4W END 08/11/12

Market DefinitionUS Expanded All Outlets = Food, Drug, Mass (5 retailers), Wal-Mart, Club (2 retailers), Dollar (3 retailers) and DeCA (Military)Mass = Target+Kmart+Shopko+Pamida+AlcoClub = Sam's+BJsDollar = Dollar General+Family Dollar+Fred's

Maximizing sharing

22

Copy EffectIndex*

TotalWomen 30-65

Women 30-49Non-buyers

Women 50-65Contrex buyers

Strong message quality

23

Vélo 234 263 261

*CEI = Impact (Visibility/Link to the brand) and Persuasion (Purchase Intent).Source: Ipsos pre-test

Success with sharing

24

16 million views on YouTube, 12 million earned #1 video viewed in September in France #1 video shared in October worldwide In YouTube’s Top 20 most liked and viewed ever

Sources: YouTube (metrics are for entertainment category); Mashable.com – October 2011 (does notinclude music videos, user-generated content or movie trailers)

Contrex market share in France

7.97.7 7.8 7.7

7.3

7.88.0 7.9 7.9 7.8

Source: IRI hypermarkets + supermarkets, volume market share of bottled water

2011 2012

7.2

6.4

6.0

6.7

7.3

P5 P6 P7 P8 P9 P10 P11 P12 P1 P2 P3 P4 P5 CC P5

We are learning rapidlyBRAND FACEBOOK RESULTS OTHER METRICS

Gerber USA ROI $3.91 for every $1 spent 3.1M Fans

Kit Kat UK ROI £1.31 for every £1 spent 11% of media-driven sales

Nescafé Philippines 10% Rise in Sales 1.25M New Fans

Kit Kat Philippines No. 1 Local Brand Page

Butterfinger USA +6 pt inc brand favorability 90% Fans Reached

Kit Kat Brazil +24-point increase in ad recall 80,600 Fans in 3 daysKit Kat Brazil +24-point increase in ad recall 80,600 Fans in 3 days

Baci Perugina 100K New Fans 1.5M Impressions

Nescafé India ~2M Fans in 2 years

Nestlé chocolateTurkey

55K Fans +15 incr in brand aware.

Infant NutritionGreece

7,000 Fans in 3 wks 40% engagement rates

Nescafe Shake it Up 35K new Fans 7.7M Impressions

Note: ROI = sales return on investment

The Nestlé Way

Minimize avoidance and rejectionMinimize avoidance and rejection

Maximize impact, sociability and sharingMaximize impact, sociability and sharing

27

Maximize impact, sociability and sharingMaximize impact, sociability and sharing

Do it consistently, at scaleDo it consistently, at scale