When General Mills was planning the launch of its Yoplait Kids product line earlier this year, the marketing team knew that reaching mothers of toddlers, the target audience, was critical to its success.
"It was definitely a 'mom' strategy to get people talking about it," says Greg Zimprich, director of brand PR for General Mills.
Part of that strategy included traditional tools like SMTs, press kits, and RMTs, but the fact is that this target audience is no longer glued to a TV in the middle of the afternoon. Instead, these women are often voracious consumers of online media and enthusiastic participants in Web communities.
As such, in addition to establishing a Yoplait Kids Web site, which promoted an offer for a free coupon to encourage sampling of the product, General Mills also partnered with sites like Sittercity, Mom Central, and The Coupon Mom. Using those sites' networks, the team was able to distribute information about sampling and free coupon offers.
Ultimately, the team received more than 200,000 requests for free coupons for the product, which Zimprich credits for the launch's success and, ultimately, the high volume the product has moved in its short time on the shelves.
"Fundamentally, [online] is where your consumers are," says Mark Addicks, CMO of General Mills. "I think all good marketers try to follow the consumer and make sure that [the company] is at the touch point where it is going to be most relevant and where it's going to be immediately relevant. Increasingly that is digital or new media."
Certainly the use of digital and social media is not new for marketers, but it is a discipline that is on a steady and significant rise, according to the results of the 2008 PRWeek/MS&L Marketing Management Survey. Of the respondents, 75.4% expect spending for digital/online initiatives to increase, compared to 42.5% for direct marketing spend, 36.5% for PR budgets, and 32.5% for ad budgets.
"Digital is definitely here to stay as a global capability that big agencies need to have," says Mark Hass, CEO of MS&L. "Clients are beginning to understand that the nature of the discussion they have with their constituencies has changed. They get it. They can no longer use words like 'dialogue,' and advertising has this monologue nature to it and even [in] more traditional PR there's this dialogue. It just doesn't work because there's a conversation going on all around them. It's what we refer to as a 'multi-logue.'
"If you are a client or a brand, you are not a part of every conversation about your brand," he adds. "You are probably part of a very small percentage of them. Then the question becomes, 'What's causing that?' And what's causing that is digital. What has created a multi-logue is the explosion of digital technology and the way people use it."
Southwest Airlines is just one of the many companies that has responded to this growth with an increased investment in digital.
"The percentage that is being allocated toward social media and new media is growing," says Kevin Krone, VP of marketing, sales, and distribution for Southwest. "We are making tradeoffs in the marketing world between traditional media and new media. We are definitely moving more into digital than we have in the past. There are new tools, new trends, and new opportunities that we're evolving into."
For Southwest, the move toward digital, which has been gradual over the past few years, has been a natural evolution, he adds.
"[Travel] very much lends itself to an online and social experience, especially the research phase of it," says Krone. "People are really very accepting of other people's experiences and want to learn from what others have done. That creates an environment that fosters lots of interaction with customers as they research trips. It's [very] natural for us to be there and be part of that."
Indeed, consumer behavior is dictating the increased focus on digital for several companies.
"We are definitely following our customers into this medium full force," says Bill Agee, CMO of Ikea US. "It goes across all disciplines. It's not just advertising. We actually look at it as a media that's available to all of our marketing efforts, whether it's direct marketing or customer relationship marketing, advertising, or [PR]."
And the digital medium offers the chance to directly connect with consumers, something which has become increasingly important as media fragmentation continues.
"Digital has been an important part of our mix and [will] continue to be," says Anja Carroll, director of US media at McDonald's. "We look at the landscape relative to our consumer and where they're spending their time. [We] ensure that we're picking those contact points that really engage with our consumers in their favorite environment."
In fact, Carroll says nearly all marketing campaigns at McDonald's now have a digital component.
"What's great about the digital space is that it opens up a whole new world of opportunity for a creative format," she adds.
Last month, McDonald's took advantage of that creative potential when it introduced its Southern Style chicken sandwich and Southern Style chicken biscuit, the company's first breakfast item to contain chicken. Built around the age-old question of "Which came first, the chicken or the egg?" the company created a Web site, http://www.whatcamefirst.com/, to help seed the message about the new menu items and notify consumers about a nationwide sampling event on May 15.
Visitors to the site could upload their picture to be on a chicken or an egg and then have their creations participate in a "dance-off." McDonald's also employed traditional and online advertising, blogger outreach, and online/TV/ radio promotions to publicize the sampling event. The site has garnered about 165,000 unique visitors so far and the nationwide sampling event gave out nearly 2 million breakfast biscuits and 5 million sandwiches.
The Flexibility Factor
Another reason for digital's growth is the flexibility it gives marketers.
"There are so many fewer variables for digital than for classical media," says Arjen Linders, VP of marketing for the shaving and beauty business at Philips North America, an MS&L client. "There are no upfronts. There is no three-month plan for print. You can learn on the go; you can spend your money while measuring your effectiveness. You don't have to commit to a budget three months in advance, then spend it, evaluate, and do something else the year after."
That flexibility as far as spending has become especially important as the US grapples with an economic downturn and marketers are facing either slashed or frozen budgets.
When asked which disciplines would be most likely to be cut if forced to do so because of economic conditions, digital was the least likely with only 11.1% of respondents noting that they'd cut budgets for those initiatives. Advertising was the most likely to be cut (58.3%), followed by point-of-sale marketing (55.6%), direct marketing (41.3%), and PR (35.3%).
"You're always confronted with budget freezes and cuts. The key is in how you make your budget more flexible so you are able to spend your budget if you do have a cut," says Linders. "If your [budget is] frozen for the rest of the year and you have all of your money invested in long lead print, you're quite inflexible. In a volatile economy where I have to be flexible, I'll think twice before I double my print budget."
Indeed, for many marketers, the appeal for using digital media is related not only to its flexibility, but also the possibilities it presents as far as measurement.
"The great thing about digital is that you can see instantly a lot of your results," says General Mills' Addicks. "If you put something on YouTube, you can see how fast, how viral, and how entertaining an ad is. You can see as you distribute an e-mail newsletter and some of the content that's bundled into them, like sampling offers and coupons, how viral they are. It's very much like direct mail used to be, except it's faster and more instantaneous, and frankly more interactive."
Philippe Schaillee, VP of marketing, strategy, and R&D for Sara Lee North America, agrees that the digital space makes measurement easier for some disciplines.
"I feel the online space is one of the most effective spaces to make advertising measurable," he says. "Even before this potential economic downturn, the focus of all CPG (consumer packaged goods) companies on ROI has been increasing. This new pressure of being squeezed on the one hand by rising commodity costs and on the other hand by consumers and shoppers [who] have less purchasing power stresses for us even more that every dollar that we're investing in marketing needs to be effective."
Linders says that the digital space also forces marketers to think about new ways of measuring success.
"Do you want to go for the maximum number of impressions or do you want to find the exact target group that you're looking for? Reach isn't important, but that selection of people is," he says. "You have to end up communicating with the right number of people that you need. That audience knows the rest of the consumers.
"What you see happening is that the b-to-c model is changing into a b-to-c-to-c model," adds Linders. "Companies talk with influencers, with key opinion leaders, [and] with he innovators in the target group and the innovators do the [marketing] for you."
When Philips launched its Body Groom product a few years ago, it set up http://www.shaveeverywhere.com/ as a destination for men to find information about the sensitive topic of below-the-neck shaving, as well as to promote the product.
Those first people to visit that site basically served as the "ad campaign" for the product, Linders says. Due to the buzz centered on the Web site, the company was able to double its sales target, with a media budget of only $350,000. The site has received 7 million visits to date and has been updated to reflect new products.
"Low budgets are becoming an eye-opening surprise for marketers to do creative things," Linders says. "They're almost liberating. If your budget is so low, you will do the thing that makes a difference."
Though PR is not the discipline most at risk when it comes to possible budget cuts, the reasons among those who would cut PR reflect a nagging problem for the industry - measurement and ROI. When asked why they would consider cutting PR budgets, 65.9% of those respondents cited difficulty to quantify ROI, lack of effectiveness, or inability to measure PR efforts.
"I believe marketing is never going to be an exact science; [there's] always a little bit of art and gut in it," Sara Lee's Schaillee says. "PR is a difficult one to measure."
What makes the measurement of PR easier, he says, is having a clear target audience and focused message. For work on the Senseo brand, which is geared toward "coffee-loving explorers," the company has been able to measure the effectiveness of PR within the media mix, yet still finds measurement of PR to be difficult overall.
"The more specific the message that you're bringing and the more narrow the target, the more measurable PR will be," he says. "We measure brand health on a consistent basis across all our brands - it measures the impact of our different media mix elements. I cannot say that it is currently doing a good job at picking up the effect of PR. We're struggling with it as most other CPG companies are."
In an economic climate where budgets are tight, research and measurement are very often the first portions of a PR budget to be cut. Yet measurement is necessary to prove ROI, which can help increase budgets, providing a Catch-22 situation for firms and in-house PR pros.
"PR is vulnerable unless it can convince its clients to invest in measurement," says MS&L's Hass.
"[Clients] value PR, but question its value because they think it can't be measured," he adds. "It can be measured; they're just not willing to spend the 5% or 10% of the program budget to have it measured."
Despite those challenges, several companies have been able to put into place programs that measure the impact of their PR activities.
Yet PR firms are still struggling to prove their worth to clients in comparison to other disciplines. According to the survey, only 30.6% of respondents believe PR agencies do an "excellent" or "very good" job of measuring the effectiveness of their performance. This falls behind direct marketing agencies (54.8%), internet/new media shops (53.2%), advertising agencies (35.7%), and media agencies (31.3%).
"Public relations is vulnerable if it can't establish its ROI and values, so we need to do more as an industry," Hass says. "If we're going to continue our inroads, we need to figure out a way to demonstrate our value in an objective way instead of a subjective way."
A Prime Opportunity
That digital is almost "recession-proof" ultimately presents an opportunity for PR to prove that it can handle many aspects of such programs, says Hass.
The survey shows that only 15.1% of respondents would consider a PR firm first to handle a digital strategy.
"I still think the issue for our industry is to clarify what it is we do... which part of digital it is that we do. It's not all of digital," he says. "Managing the social network space, the relationships in there, the content that goes in there, all are things a PR firm is best suited to do."
At General Mills, the in-house PR team has taken the lead on the company's social networking outreach, using a proprietary platform.
"One of the great things that's happened on our team is that PR has really been transformed in the past three years from more traditional PR methods," says Addicks. "PR has led us in the social media area."
Ikea's Agee says the company typically starts by meeting with its agency partners within a specific discipline and then judging their capabilities before seeking a specialist agency to work on digital initiatives.
"It needs to come with the strategy developed with our discipline partners first and foremost," he says.
"We keep a very tight relationship with our agencies and feel that while they [may] not be specialists in working digitally, the contributions that they bring in terms of their specialty and their knowledge of Ikea are more important."
For example, Ikea is working with Ketchum on an online promotion with Universal Pictures surrounding the upcoming release of the ABBA movie musical Mamma Mia!, a nod to the company's Swedish heritage. Part of the campaign involves the "Ikea 'I Do, I Do, I Do Want to Get Married at Mamma Mia! The Movie' Wedding Event," which asked couples to enter for the chance to win a wedding ceremony celebration at an Ikea in Burbank, CA, on July 17, one day before the premiere of the film.
PR's ability to have a firm grasp on digital becomes even more vital as agencies are facing new competition in other areas of the business. The survey shows in the past two years, 13.9% of marketers have been approached by a non-marketing consultancy, such as Accenture, to do communications work.
Hass says that in an age where firms like PriceWaterhouseCoopers and McKinsey could become the new competitors for PR agencies, emphasizing digital capability is something that can ultimately raise PR's profile even more.
"Each of these professional services firms lines up with one of the jobs that a CEO has," he says. "One of these new jobs [of] a CEO is this idea of a keeper of the authenticity of the enterprise [or] the chief culture officer. And [PR agencies are] in the best position to help them manage that problem, manage that opportunity, which has been created by digital. Because we traditionally work in that space of reputation and culture communications, I see digital as a bit of a Trojan horse to get us - not a seat at the table - but a permanent place in the C-suite as counsel to the CEO."
Along with the expansion of the digital space comes the exponential growth of consumer-generated media (CGM). Certainly participating in such venues where CGM is rampant relinquishes the control that marketers have on brand messaging. But as time goes on, it seems as though marketers are becoming more comfortable with that idea. According to the survey, 65.9% of respondents were "very willing" to let consumers play a significant role in shaping their marketing program, up from 58.8% last year.
"It's an illusion to think anybody but the customer controls the brand," says Southwest's Krone. "At the end of the day, it's their experience that drives [the conversation]."
Southwest invites participation through its blog, NutsAboutSouthwest, which is managed by the PR team and includes posts from 40 internal bloggers, a weekly video, and a weekly podcast. The company also has a presence on Facebook, Linked In, and Twitter.
For the relaunch of its Cherry Coke brand last year, Coca-Cola formed a partnership with MySpace to allow those in the community to use the brand assets to design and "skin" their homepage. The winning page became the homepage for all MySpace users for one day.
"It was pretty earth-shattering," says Michael Donnelly, director of global interactive marketing. "That is one of the most heavily trafficked pages on the Web today."
According to the survey, 67.5% of marketers believe that consumer-generated media is "very important" to brand awareness, while 64.3% believe it is "very important" to building a brand.
Sony Electronics is in the process of creating an integrated social media platform for both internal and external communications, which will allow for the development of communities and microsites around a variety of topics and special interests, says Rick Clancy, SVP of corporate communications. The company expects to launch it later this year.
"Clearly our marketing team is looking at an array of strategies to reach and engage the consumer," he adds. "Increasingly, corporate communications and corporate marketing are partnering by teaming people to have a particular focus on the consumer experience - activities that actually touch people and get people involved with our brand."
Even those companies within industries that have been traditionally slow to embrace digital strategies, such as financial services and healthcare, are recognizing the value of inviting consumers into the conversation.
American Express Open developed its Open Forum a little more than a year ago as a place where small business owners could not only get advice from third-party contributors, but also connect with each other. The site also invites people to post their own videos that tell of their experiences as small business owners.
Marcy Shinder, VP of brand strategy and marketing for American Express Open, says such a strategy is a logical choice in today's environment.
"We look at it that people are talking anyway," she says. "You need to put enough substance behind your brand. That's why being authentic is really important. If you're inauthentic, then people are going to talk about it."
Kate Quinn, VP of market and brand strategy for health benefits company WellPoint, admits the industry has been slow to embrace social media because of its history of being conservative. Yet, the company has recently ventured into the space, launching a tool with Zagat's where users can rate healthcare providers. Also, it has built online forums called "Anthem Advisors" where people can post comments and questions about experiences with certain providers.
"I just think that the nature of the beast now is that you can't control everything that's said about your brand," she adds, "so you might as well try to create positive forums where people can communicate with each other."
While consumer-generated and new media tools like YouTube, Twitter, and podcasts are generating a lot of use and interest from the marketing community, many are still focused on the more traditional online tactics. The survey shows that 51.2% of respondents cited traditional online activities/Web sites as their top priority over the next six to 12 months.
Ikea's Agee says the company dedicates a lot of "time, effort, and money" to its Web site, which receives 1 million-plus visits a week.
"In terms of devotion of spending, we look at the Web site as an extension of our stores," he says. "As a retailer, we look at our stores as the customer who has made the effort and spent the money on gas to get to the store deserves to have an excellent experience. We see the same thing with the Web site."
Among the other top priorities for marketers in the next six to 12 months were targeting influentials (37.7%), grassroots marketing (33.3%), and CGM (28.8%).
Natalie Johnson, manager of social media communications for General Motors, an MS&L client, sees the company's use of social media and networking as "a true grassroots approach" to PR. "Fundamentally we're trying to go out and build relationships with those users who are interested in connecting with other people."
In early April, GM launched IMSaturn.com, a social networking site built on the Ning platform, which allows Saturn owners to connect and share experiences about their cars, as well as connect with employees at GM. The site currently has almost 1,800 users.
"The beauty of the growth of social media is more and more you have the two-way dialogue," says Johnson. "You can learn from [consumers]."
Perhaps because of the growth of the digital space and more possible threats to reputation, some marketers are devoting even more attention to PR. Ikea, for example, has gradually increased its investment in PR in recent years.
"My feeling is that we have a lot of product stories and social and environmental stories behind Ikea, behind the blue and yellow facade, that we have spent enough time trying to communicate to customers," Agee says. "And we feel the best way to do that is [PR]. You see an ad for a company that is advertising its green initiatives [and] we feel that's not as reliable or dependable as communicating through the media."
WellPoint's Quinn notes that the company has put more of an emphasis on PR, as it has shifted from straight product promotion to building reputation.
"I think PR is taken a lot more seriously and is a much more important component of communications strategy now than it was ever before, especially in our industry," she says. "The healthcare industry right now is under a lot of scrutiny because of the election and all of the dissatisfaction with all of the different players in the system. Going out there and doing the 'shiny happy people' type of advertising is a waste of money.
If we want to communicate positively with people and have some credibility to what we are trying to relay as a message, it has to be with other types of communications strategies like PR."
One of the downsides to the growth of the digital space is that it creates an extra layer of possibilities for breaches in marketing ethics. Despite the public examples of companies that have been exposed for fake blogs, providing gifts to bloggers without disclosure, and altering company Wikipedia entries, the survey shows that it has not had much of an effect on actual marketing practices. When asked if the marketing industry is following ethical guidelines in new media more than it did a year ago, 53.2% responded "no."
And though the numbers are small, there still exists a certain amount of unethical behavior among marketers for traditional media as well.
According to the survey, 7.9% of respondents have either paid for or provided a gift to an editor in exchange for a news story about their company. In addition, 18.7% have bought advertising in return for a news story and 10.3% have had an implicit/non-verbal agreement with a reporter or editor that advertising will result in favorable coverage.
Like other companies, General Mills has internal marketing guidelines - covering both traditional and non-traditional media - that all employees must sign annually and to which partner agencies must adhere. Last month, the company had all of its marketing employees meet with representatives from YouTube, Facebook, Google, and Yahoo, as part of a digital immersion training session.
"If anything, we've expanded the presence of guidelines in the past five years," says Addicks. "The key word is transparency. There is a level of transparency required certainly for our brand. If you're not transparent, you're going to be called on it."
Sara Lee, too, has been committed to marketing ethics.
"We have preferred to be fully transparent in our efforts [and] fully branded," Schaillee says. "If you take the approach that some brands have taken in the end, you've violated a trust with your... prime prospect. In the long term, it hurts your brand."
And especially as the digital space alters the definition of a journalist, Hass argues that marketers should play a role in maintaining standards of good journalism.
"I think marketers should sup-port editorial quality," he says. "I think they should put their money into publications and media that have excellent journalistic standards. That, in the end, is good for them. The idea of having an earned media outlet is important to the whole marketing mix. It's also important to the credibility of brands and ideas."
The 2008 PRWeek/MS&L Marketing Management Survey was conducted by PRWeek and Millward Brown. E-mail notification was sent to approximately 10,000 marketing executives, and 252 people completed the survey online between May 1, 2008 and May 19, 2008.
Results are not weighted. Excel files of raw data are available for $150. Please contact firstname.lastname@example.org.