CPG’s Love/Hate Relationship With Social Media

In terms of progress in social media, 2009 was a rough one for Consumer Packaged Goods Brands - otherwise known as CPGs. From Motrin Moms to the Skittles Interweb, it's no wonder some CPG marketers are apt to describe their relationship with their product's social media strategy as "complicated."

On one hand, CPG marketers have always been wary of social media because they love control and predictability.  They are used to drawing on decades of market data to tell them that if they put X amount of dollars into a traditional ad buy on television, radio and/or print, they have a pretty good chance of getting Y level of return. Social media, as a relatively young and evolving channel, doesn't have that kind of predictability.  That tradeoff tends to weigh heavily when it comes to determining marketing spend for a brand with sales expectations upwards of $1 billion per year.

On the other hand, social media has also always held an allure for CPG marketers.  It appeals to an aspirational desire for consumers to take ownership of the brand. Diet Coke and Zappos are prime examples of instances where consumers have created their own messages on behalf of a brand because and in doing so create a sense of ownership for themselves.  Not only does this type of messaging and behavior tend to benefit a brands' reputation; once a consumer feels they "own" a brand, it is very hard for them to be convinced to switch to a competitor.

The question is, will CPG ever be able to truly embrace social media not only for what it is, but also for the unique balance of risk and calculation that it takes to really succeed in it? 

Here at NMS, we're definitely working towards that goal with all of our CPG clients.  Though there may not be a single right answer that applies to all brands, but we can say that there are three things we know for certain:

1 - Social Media can be measured

Despite reports to the contrary, the impact of social media is not impossible to track - you just have to know what they are looking for.  Sure, data sources like Google Analytics, Facebook Insights and the measurement of online sentiment may not tell you much on their own.  However, once you start folding data on top of data and actively experimenting with things like online coupons; you are able to see a much clearer picture of how consumer dialogue in social media affects in-store purchases.

2 - You have to take smart risks to win

In the modern marketplace, it's no longer enough to have a brand and a message.  Market leaders, particularly those aspiring to consumer ownership of their brands, must have a personality.  That means some consumers might not relate to that personality and yes, you might have to give up the ability to target all demographics at once.  However, by selecting the right kind of personality and the right social media platforms to compete on, you can hedge your bet that consumers will react favorably to your brand's presence in social media.

3 - Social media is the ultimate barometer of brand health

Though some CPG marketers may not like to hear it, one of the most prevalent reasons products don't succeed in social media is because the products just aren't that good.  You might be able to spin the positive attributes of a so-so product in a television ad but when it comes to consumers, social media is absolutely a "no-spin zone."  Regardless of what category you're in, if you have a good product that consumers actually like and a smart social media strategy for appealing to their online behaviors, consumers are going to want to talk about it.  

Social media has a different set of rules. CPG brands wanting to compete in this space need a different toolkit than in traditional media. However, despite the differences, social media really is an excellent match for the goals and needs of CPGs brands.  Now that we are in 2010, it will be fascinating to see what transpires as consumers continue to move more of their dialogue into the social media space.