FMCG companies finally recognise the value of digital marketing

It was a welcome signal that Unilever, one of the FMCG giants has finally recognised the power of digital marketing and has decided to double its spend in this area as revealed in The Times business section although it’s not revealed how much of its £3.4 billion ad and promotion budget will be moved. Unilever has finally recognised that many of its customers are watching less TV and spending more time on the internet and on their mobile phones, especially in emerging markets. I’m sure their traditional marketing agencies are now thinking about the improved accountability this will deliver for their campaigns.

This brings me to the topic of how you can as a supplier and consultant to a company be a challenger to ask the awkward questions and challenge the status quo. I have a bit of a reputation for doing this but it always surfaces the right issues. However the key learning for me is that unless you have a board sponsor and are working at board level you cannot drive the right change agenda to get large companies to make some of the big shifts demonstrated above. This doesn’t mean change for change’s sake but change that is in tune with changing consumer habits and market forces. I drill into my programmes the need to start with the market and the customer in any analysis. It’s amazing how so often we get fixated with our products and services and forget about the need or pain points they are designed to address and before we know it the market has moved on and a new raft of competitors has entered the fray to meet these new emerging demands.

There are many companies pitching online marketing campaigns as a tactical solution with short term objectives for raising awareness or changing customer behaviour. However brand building in the digital space is no different to the traditional ways of taking the customer along what we call the “customer bonding staircase” from awareness to advocacy – a coveted market position that few brands have achieved with the exception of brands like First Direct or Amazon which have high levels of retention and repeat purchase as they focus on bringing additional value to their customers.

The announcement this week that Amazon has started to sell music equipment has sent a shiver through the UK small music store industry. Which industry sector will they target next and are you delivering enough customer value to survive the Amazon threat? Maybe the FMCG manufacturers and the innovative online players have an opportunity to work together to counter the balance of power which currently favours the UK retailer. If you look at many US websites today you can buy your health and beauty products directly online from the manufacturer and what a great opportunity that offers to have a direct relationship and even test some new products and ideas with your most loyal customers.

Do tell us which market you guess Amazon will target after music equipment.

2 comments for “FMCG companies finally recognise the value of digital marketing

  1. 4 October, 2011 at 13:35

    “Maybe the FMCG manufacturers and the innovative online players have an opportunity to work together to counter the balance of power which currently favours the UK retailer.”

    This could be true, as it allows loyalty to be gained online, which is harder for FMCG to develop. With sales online increasing each year, it is a market FMCG cannot afford to ignore.

  2. Enterprise Britain
    14 July, 2010 at 21:51

    As soon as Katheryn's blog was published last week Amazon announced they were entering the UK online grocery market. As both the blog and the newsletter had been released we decided to leave the blog unamended.
    It would be interesting to hear comments of what the impact might be especially on Ocado and its listing.

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