Notes and Thoughts on Grocery 2.0

The above IAB Chart does a good job of showing that CPG spending online still lags other segments’ advertising spend. The latest Pew Internet study does a great job showing that 81% of US consumers use the internet for product research and 71% purchase online. If 2/3+ of the online adults are ready, why haven’t we seen a larger corresponding move in media dollars?

Three primary reasons:

1. It is hard to buy digital with many fragmented publishers and to many ad formats.
2. A transparent set of metrics: Is it the click? ROI? Engagement? What drives consumer product adoption and ultimately sales?
3. It takes effort and time to re-evaluate your media mix.

The IAB has done a good job addressing some of the issues with Measurement Guidlines and The Universial Ad Package . Yet, I think what is really pushing us forward is the economic downturn. There is no longer a paper in Denver to buy print ads on. That forces a reexamination and increasingly digital is the winning choice.

MyWebGrocer announces that Peapod, serving 14 major US markets, is joining the MyWebGrocer Ad Network. With the addition of Peapod, the majority of retail Grocery Ecommerce transactions occur within the MyWebGrocer Advertising Network.

The addition of Peapod, Peapod by Stop&Shop, and Peapod by Giant to the ninety other leading retailers on the network means that the network now has significant store density in the key New York, Chicago, Washington DC, and Boston DMA’s.

“The addition of Peapod, who has set the bar in e-commerce, is a significant milestone in our Ad Network’s rapid growth” explains Rich Tarrant, CEO of MyWebGrocer. “In less than a year we have demonstrated the power for our network to drive sales at the digital shelf for both retailers and CPG manufacturers. If a brand manager wants to communicate with online grocery shoppers, then the MyWebGrocer advertising network is the place to find them with credit card in hand.”

“We believe that the targeted nature of grocery specific advertisements within the MyWebGrocer Ad Network will be of value to our Peapod customers”, said John Burchard, Senior Vice President of Peapod. “In addition, Peapod’s website, with its large base of active online grocery shoppers, will be an attractive destination for CPG manufacturers to engage with consumers. We are very excited to pursue an advertising partnership with MyWebGrocer.”

About Peapod
Founded in 1989 as a smart shopping option for busy people, Peapod today stands as the country’s leading Internet grocer, serving 14 U.S. markets including the metro areas of Chicago, Milwaukee, Boston, Suburban N.Y. and Washington, D.C., and communities in the states of Illinois, Maryland, Massachusetts, Connecticut, Virginia and Rhode Island. The Skokie, Illinois-based company, a wholly-owned subsidiary of Royal Ahold in The Netherlands, has achieved over 13 million deliveries since its late 1980s inception. For more information on Peapod, call 1.800.5.PEAPOD (573.2763); e-mail service@peapod.com or visit www.peapod.com.

About MyWebGrocer
MyWebGrocer was one of the first to launch online Software as a Service for retail grocers in 1999. MyWebGrocer increases basket size, acquires new customers, retains current customers, and drives revenue in-store and online business for their clients. MyWebGrocer has the largest grocery advertising network in the country covering 85% of the US, earning their clients direct ad revenue. Some of their clients include Shoprite, Lowes Food Stores, Big Y, Food Lion and 90 other leading grocery chains. For more information please visit www.mywebgrocer.com or call 1-888-662-2284.

Major grocery chains across the country have found a silver lining in recent consumer spending. Financial concerns have not only driven more customers out of restaurants and into grocery stores, they have pushed consumers to question whether their favorite brands are worth the extra cost.

Enter store brand products, which are cheaper than national brands and more profitable for grocers. These lines, often featuring premium ingredients and pleasing packaging, are attractive to consumers not wanting to sacrifice quality to save on groceries.

For decades, grocers thought of private label products as inexpensive imitations of popular brands like Cheerios and Coca-Cola. Consumers, likewise, have been skeptical, that is, except during recessions. As Jan-Benedict E. M. Steenkamp, marketing professor at the University of North Carolina Chapel Hill, says, whereas past recessions temporarily gave consumers a reason to trade down from national brands, this time, the change may stick because the quality and consistency of store brands have improved. “Sometimes, [the consumer experience] will be disappointing,” said Mr. Steenkamp. “More often, it will be better than expected.”

While store brands grow and private label products improve, major branded consumer packaged good companies still insist that their branded products offer better quality through taste and innovation, justifying the higher price. The bottom line is, the only instance in which it matters whether private or branded products provide more value, is in consumers’ perceptions.

As Sharon Frey, a Kroger shopper says, when deciding between private label and branded products, “A lot of it depends on what product it is. If it’s eggs, it doesn’t matter. I would buy Heinz. I prefer Heinz ketchup.”

For grocery chains trying to increase profit in a down economy, private label is the key to continued growth. To compete with popular brands, increase category market share and continue to deliver a sound message of quality for less, retailers need to promote store brand products at every point of purchase. That includes online grocery shopping. Retailers should utilize changing consumer habits by advertising private label lines where cost-conscience consumers can buy with one click.

Rachel

When it comes to the search results page, anything in the top 3 positions encourages clicks, the ads in the side panel can have great click through too – as long as they’re above the fold. The ads that drop below, well, let’s hope your competitor’s ads are less targeted than yours.

When someone is browsing a blog, or shopping, does it make a difference to the CTR if the ad is at the top of the page, a skyscraper on the side or that big ol’ 300 x 250 rectangle right in the middle of the page? Yes. Yes it does.

According to Gord Hotchkiss of Enquiro, that top of the page placement can make a difference.

“There is brand lift that comes from dominating the top of page. The biggest question for our first study was, how valuable are those top-of-page slots? If you own the organic position, do you need to buy the top sponsored spot? Is there lift by owning both spots? The answer is yes, to both. The lift we saw in most metrics was well into double digits, significant for marketers. You gain a bigger share of mind when you own more top-of-page real estate.”

Owning the top spots in organic and paid search is great. I am a bit wary against the click cannibalism (do you want to pay for a click when you could get it for free?) But that’s another other discussion…

“You lose brand awareness when you’re not there. For generic keywords, even if you have a strong brand in a category, if you’re not in a result set and your competitors are, your position of dominance will start to erode. In fact, we’ve seen people looking for dominant brands in a result set when they weren’t present, and their confidence in both the quality of the search results and the brand position started to erode. Often, it’s the biggest and strongest brands that are the least concerned about their search visibility. This arrogance could wipe them from the consideration set of many prospective buyers.”

Don’t lose your mindshare. Yes, you may have become the generic name for a category, such as Kleenex, but if you’re not owning that top position people are going to notice and wonder why someone else is in your place. Maybe the other brand is better? The consumer doesn’t know, or really much care, but they do know that you’re not where they expected you to be and have now turned their attention to the brand who is.

“Competition on the results page is a good thing. If domination of a results page is good, total domination must be better, right? Well, no, actually. We found more engagement with the top-of-page results when there were a couple of well-known competitors, and engagement led to an overall lift in brand awareness for the test brand. The reason has to do with the intent of the user. If a user is launching a search looking for alternatives to consider in a purchase decision, a results set with only one brand isn’t a very good match to that intent. The user will spend less time considering it, because their confidence is lower. But a results set that brings back two or three well-known brands is a better match, resulting in more engagement. Of course, you’re now competing with those brands, so effective messaging, positioning and landing page strategies become more important. But you already knew that, right?”

Competition is fabulous. We all know this but like to believe that total domination will result in all clicks going to you. It’s possible, but chances are people will search harder to find your competition. Level the playing field and position yourself next to them, just make sure your marketing is on target.

Brand awareness and mindshare have always been a top priority for marketing; but make sure that you position yourself not only in the consumer’s mind, but on their screens as well. With everyone spending more and more time on the internet it is essential that your brand be online too. Improving your online visibility will only prove to be more beneficial as users become technologically savvy.

As people are searching it’s important that they can find you – on Google, Yahoo! or MSN, on blogs and Shopping Applications.

Elise

** Read the full article “Brands On Search: Connecting During Consideration” by Gord Hotchkiss at Search Insider

Consumers depend on the internet for information. That is a fact. If they didn’t, Google wouldn’t be processing over 3 billion searches per day. The Web provides businesses and brands with cheap, unlimited space to provide what their consumers want and need, which includes information. But while many have embraced the web and all it offers, far too many businesses underestimate the power of the internet to connect with consumers.

“The reason Google is so valuable is because it’s the linchpin of the expansive, information-driven age. It links seekers of information to providers of information in the most accurate and efficient way. It proves that there’s a marketplace for information unlike any we have ever known. And modern brands must compete in that marketplace,” says Barry Wacksman of AdWeek.

Websites, at the very least, should be loyalty driving vehicles, where goal oriented consumers can connect with brands, make purchasing decisions and seek product related information. In addition, consumer dependence on the internet provides great potential for Internet-based directional advertising, for both retailers and brands.

A recent OMD study that tested consumer perceptions about advertising found that 81% of consumers said advertisers need to continue to communicate about their products, especially during a recession. Consumers said they would be more receptive to cost-savings messages and products that are positioned as investments. For low involvement products, marketers need to communicate brand benefits.

“The task for marketers therefore is to explore more efficient ways to connect and listen to their consumers in order to reduce costs, while still maintaining a presence in the marketplace and connection to their consumers,” says Joe Marchese, President of Socialvibe. “It’s possible that this economy will force marketers to innovate, and finally begin the shift of massive, high-waste, traditional media budgets into more engaging, measurable interactive marketing initiatives.”

When your consumers go online, will you be there?

Rachel