Is Your New Product Buzz-worthy ?

October 28, 2009

Positive and impactful new product “buzz” is something that every Marketing executive aspires to, but few achieve, particularly in the CPG space. Much has been written about word of mouth (including my previous post “What’s Wrong with Word of Mouth Marketing“) but too little has been focused on the more narrow topic of what is known about buzz and how it contributes (or doesn’t) to CPG new product success.

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New Product Buzz -- What Really Drives It ?

I recently read an insightful Nielsen white paper on this topic:  “The Origin and Impact of CPG New Product Buzz” (disclosure:  I now work for Nielsen).  For this purpose, “buzz” was defined as product specific mentions and discussion on blogs–positive or not. Nielsen researchers reviewed buzz and sales data to better understand and isolate the key drivers of new product buzz and it’s impact on sales. What did they learn ?

Key Learnings — Buzz in CPG New Product Launches

  • A very few CPG brands account for most of the buzz.  Only 10% of products account for almost 85% of the buzz within a category. Many new products experienced little to no buzz whatsoever. This raises an important question for Marketers: are there some categories and brands that are simply un-buzzworthy? Is it just a waste of time and resources to try and build buzz in some categories? Or is it just that many new products failed to go to market with an effective buzz generating plan?
  • Ad spending and distribution play a significant role in driving buzz.  This learning defies conventional wisdom, as many people think of buzz as being more “pure” than paid media. On closer inspection, it makes sense, though. Advertising and distribution are both key factors in driving awareness, and consumers must be aware of a product to talk or blog about it. So, it’s not entirely surprising that buzz is driven to some degree by advertising and distribution.
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Buzz Levels -- Directly Related to Ad Spend

  • Buzz can be predicted to some extent by category purchase frequency and distinctiveness.  The more frequently consumers buy the category, the more likely they are to experience your new product. Perhaps even more important, the more distinctive and unique your product is, the more likely people are to talk about it. This is especially true if it solves for a very important consumer need that other products haven’t solved.
  • Buzz tends to peak before sales.  Does sales drive buzz or vice versa? Obviously, there is some interactive effect that works in both directions. However, the data clearly shows that buzz builds and peaks in advance of sales, which you would expect if buzz is truly driving consideration and purchase.

Most important of all, the research also demonstrates that the level of buzz directly impacts sales. Statistical analysis showed that the quantity of buzz was a key variable in predicting sales. And, new product volume forecasts with buzz included were more predictive of actual sales results than the same models without buzz included.

Implications for CPG Marketers

The learnings above have several important implications for Marketers:

  • Launch new products that provide distinctive solutions against unmet needs. This sounds so obvious and basic, but it needs to be stated. Too often, firms are guilty of creating and launching undifferentiated products. Products which are different, special and better than competitive offerings are more likely to generate strong buzz.
  • Not every new product should be striving for buzz with their product launch. There are some low involvement categories and products which are simply unlikely to generate buzz no matter how much the Brand Manager would like it to be otherwise. If your category is low involvement, and your new product is a very close in concept to the parent brand and/or doesn’t score high on uniqueness in concept and use testing, you should think twice before investing in a strong buzz program.
  • A buzz only Marketing program is unlikely to succeed. Of course, we can all find examples of new products which have launched successfully which didn’t invest in traditional advertising. But the facts show that advertising and distribution are significant contributors to buzz levels. Category purchase frequency, uniqueness and solving for important unmet needs are all prerequisites for generating buzz. In turn, these are amplified or not by the amount of awareness creating advertising and distribution.

What the learning doesn’t address is the key role of “influencers” on the web, and how Marketers should engage highly influential bloggers who can have disproportionate impact on a brand or new product launch.

Every brand should seriously consider a buzz inducing program as part of their new product launch plans. Key to success, though, is having a distinctive product focused on solving an important need, significant investment in advertising and distribution, and development of plans which leverage early momentum in the new product launch.

What do you think — is your new product buzz-worthy ?

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Learning From the Hidden Success Factors of the Hyundai Assurance Program

October 19, 2009
At a recent M50 CMO Conference, I had the privilege of listening to two senior Hyundai executives, Joel Ewanick, V.P.Marketing, and David Zuchowski, V.P. of Sales, discuss the success of the Hyundai Assurance Program.
Hyundai Assurance Program

Hyundai Assurance Program

If you haven’t been following this story closely, Hyundai is one of the very few bright spots in a downright ugly automotive sector. Hyundai U.S. unit sales year to date were up +1.4% and September was its 9th consecutive month of year-over-year gains in retail market share.

The Hyundai brand is clearly one of the few auto companies to be driving both sales and brand equity, consistent with some of the learnings described in a previous post, “Should Your Brand Focus on Energy to Drive Growth?”

Hyundai Assurance Program

The Hyundai Assurance program, and its success, has been well reported in the media and other blogs (see Brand Channel’s “Hyundai Formula: Inconspicuous Luxury Plus Empathy),” so I don’t need to go into great detail here about it. Essentially, Hyundai recognized that U.S. consumers were reluctant to buy cars when they feared losing their jobs. So, they launched the Buyer Assurance program which allows Hyundai buyers to return their car within 12 months, no questions asked, if they lose their job.

Success Factors – Beyond the Obvious

That’s the story. But actually, it’s not. Listening to Joel and David, it was clear there were other equally important aspects of the program that drove success. What were they?

Consumer Insight – The basic insight was simple: potential new car buyers were afraid to purchase because they feared losing their jobs. The answer, the Hyundai Buyer Assurance program, was anything but. It actually communicated two very subtle, but important additional messages:

  • “Hyundai understands me.” Consumers felt that Hyundai was really listening to them and acknowledging their real world concerns. Everyone else was just offering bigger discounts and O% APR financing. Consumers always want brands that they feel listen to and understand them.
  • “Hyundai is providing hope.” In the depths of the financial crisis, consumers were looking for something, anything — to provide hope. The Assurance program provided a simple message of hope in an industry with almost none. The program met a very real and powerful need for consumers to latch onto something that would connect them with a positive future.

Product Quality – Hyundai had a perception gap. Over the years, car quality improved significantly, yet the perception of “cheap and inferior” was deeply rooted in consumers psyche. The great recession of 2009 provided an opening for Hyundai, just as the gas crisis of the late 70’s did for the Japanese.

An opening for consumers to actually reconsider and try a less expensive Hyundai as an alternative to higher priced U.S. or Japanese models. And when they did, most consumers were surprised at the quality: “Wow—this is a really nice car.” This “surprise” generated positive word of mouth, which in turn reinforced business growth.

Media Spending – Hyundai historically spent its advertising in 1/3’s: one third for “brand” advertising, one third for dealer ads, and another third for individual dealer model promotions. Working together, Sales and Marketing consolidated all of the spending behind the Assurance Program, effectively tripling the media weight versus a standard marketing program. This enabled a fully integrated marketing program from TV ads down to dealer POP.

3 Key Lessons for Marketers

  1. The Hyundai example illustrates the power of a great consumer insight. Connecting your brand’s benefit to a compelling need is a great way to engage consumers and make them feel like your brand is for them. Hyundai identified and tapped into basic powerful consumer insights about hope and understanding.
  2. Getting consumers to rethink your brand is easier when you can connect to an external event that prompts reconsideration. Executing a new Marketing program to capitalize on an external event gives consumers permission to reconsider. Consumers wanted less expensive options during the crisis, and the Assurance Program gave them a reason to reconsider Hyundai with less risk.
  3. When you have a recognizably big idea, really put your money behind it. Hyundai tripled-down on the Assurance Program media and delivered an end-to-end fully integrated campaign in support of it.

The Hyundai Assurance program has all the earmarks of fundamental marketing done extraordinarily well – great consumer insights, a quality product, innovative marketing programs, integrated marketing — and a measure of boldness and daring-do that’s all too rare in Marketing.

Wouldn’t it be great if your brand could do the same?

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5 Ways Google Sidewiki Could Change Your Marketing

October 14, 2009

In case you didn’t notice, Google recently launched an interesting, and potentially disruptive new product called Sidewiki. Currently for Firefox and Microsoft Explorer, Sidewiki allows anyone to post comments on any webpage, anytime.

Sidewiki -- Making Every Webpage Social ?

Sidewiki -- Making Every Webpage Social ?

Web strategist Jeremiah Owyang, in a recent post, “Google’s Sidewiki Shifts Power to Consumers–Away From Corporate Websites,” writes about this development as part of a larger Google strategy to “envelop” the web with a stealth social web strategy to compete with Facebook and other social networks.

When the Entire Web Becomes Social

What’s even more interesting for me than Google’s social strategy though (although that’s obviously really important), are the Marketing implications of Sidewiki. What happens when every page of the entire web becomes social? Let’s start with your brand or corporate web site: It will become social whether you want it to or not.

Leading edge companies have enabled their web sites to be part of the “conversation,” by encouraging comments, user generated content, etc. and encouraging an on-going dialogue with consumers. However, many have not, and their corporate web sites are often bastions of protected spin and uni-directional marketing speak.

Sidewiki creates the opportunity for anyone to leave comments or content on any page at any time, right on the side of your website—whether you like it or not. Companies which have not, heretofore, been social, will be social by virtue of Sidewiki. To be clear, Sidewiki is almost nowhere to be found in action at the moment, but it’s now enabled and coming—and the only question is how fast and with what impact…

SideWiki -- 5 Ways It Could Impact Your Brand's Marketing

SideWiki -- 5 Ways It Could Impact Your Brand's Marketing

Implications for Marketers

Now’s the right time for CMO’s to be thinking about where Sidewiki might lead—as yet another conversational stream that invites participatory marketing and new angles for Marketers to compete on.

Defensive Marketing – At a minimum, Sidewiki raises the stakes for monitoring your website. It’s another conversational stream that needs to be monitored—or else. Brands which have elected not to participate in the social web will soon have to monitor their websites virtually 24/7 to understand comments and react in real time—even if they haven’t enabled anyone to comment. Imagine a comment right next to the United Airlines web site with a link to the now (in)famous YouTube “Broken Guitar” video…

Offensive Marketing – Sidewiki opens up some interesting possibilities for conversing with consumers. Your target consumers are going to your competitor’s web site and many others as well. What’s to prevent your brand from using Sidewiki to talk to them? A few possibilities:

  • Challenge Your Competition – In the future, if you don’t agree with competitors claims or want to challenge the efficacy of their product, why not use Sidewiki to point this out to consumers? Sidewiki enables you to comment on their website—right next to their web site—whether they want you to or not.
  • Participate in Sidewiki Conversations – Yet another opportunity is to participate in any side conversations on your site. Respond to comments, add your perspective, challenge untruths, and give a real “voice” to your brand that humanizes and differentiates it. Sidewiki will be another stream to leverage in your conversational marketing mix.
  • Market from Complementary Websites – Another potential opportunity is to identify brand websites or pages whose equity or products are complementary to yours. Offer suggestions, relevant content, or wikis that encourage complementary website visitors to visit your site or download a wiki and engage with your brand.
  • Direct Consumers to 3rd Party Content – Not every use of Sidewiki would need to direct consumers to your website. Instead, you could encourage target consumers to visit 3rd party sites which provide relevant content and perspective which you think they would be interested in—even if they’re still just prospects. Consumers appreciate and value brands that put their interests first.

And as I discussed in a previous blog post, “How the Future Social Web Will Transform Marketing,” Sidewiki will likely eventually also enable you to filter Sidewiki comments by people in your social graph–providing even more credence and power to this tool.

It should go without saying, but a  key to doing anything with Sidewiki is transparency. It has to be clear that your brand is the one engaging in conversation on Sidewiki.

Beyond this, the key point is this:  Sidewiki will give you another conversation based web channel to target and communicate with consumers, using any page on the web, at any time, to do so.

Is Sidewiki in Your Future?

Sidewiki is new and unproven. But so was Google search a few years ago. As was Facebook, Digg, etc. Need I go on? Sidewiki is another example of how the web continues to morph and evolve, particularly in the area of social media. These changes reinforce the need for Marketers to fully embrace the conversational opportunities on the web, and increasingly put companies which don’t on the defensive.

What other marketing opportunities do you see Sidewiki creating for brands in the future?

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