This research analyst addresses how Consumer Packaged Goods marketers should be using the Internet for more effective ROI.

As director of Consumer Packaged Goods (CPG), Netquity™, Rob Rubin (bio) is the lead analyst, responsible for defining the direction of this research program. Rubin joined Forrester Research as program director of Technographics in 1997, after spending eight years at Inteco (a subsidiary of Gartner Group), where he helped launch several successful research programs.

Rubin has been a featured speaker at many industry conferences and has also appeared on national TV programs, such as “Good Morning America,” as an industry expert. He’ll be speaking at e-centive’s Interactive Marketing Executive Seminar, June 18 in New York and June 19 in Chicago, addressing the question: “How can Consumer Packaged Goods marketers build share of consumer and demonstrate effective ROI?” He gives us a preview of that presentation here, and talks about what CPG marketers should be doing online.

iMedia Connection: How much interactive marketing are CPGs doing today? How much should they be doing?

Rubin: Some are doing quite a bit. They’re all doing something. Are they doing as much as they could do? Probably not. I think that one of the things that they do is they look at the Internet sometimes as a separate medium as opposed to focusing on its ability to integrate activities that they’re already doing.

iMedia Connection: What type of advertising are they focusing on in terms of interactive?

Rubin: The things that they’re doing a lot of right now are coupons and e-mail marketing activities; they’re not really doing much banner advertising. But sweepstakes, contests, and things like that they’re doing.

iMedia Connection: What should they be focusing on?

Rubin: They should be trying to build campaigns where they take their existing traditional offline campaigns and integrate the Internet into those activities. And some are doing that. Sweepstakes are good examples of that. You can drive consumers online to enter in information; do the data entry for sweepstakes as opposed to asking them to mail in things, which gets to be expensive.

iMedia Connection: Who would you say is doing the best job communicating with customers via interactive marketing channels?

Rubin: P&G does a very good job. They have a lot of interesting initiatives that seem to be working pretty well. Homemade Simple is a good example. I think Kimberly Clark also does some interesting things every now and again; and Pepsi has done some interesting things with its Pepsi Stuff campaign.

iMedia Connection: You’ve done some reports on the gap between marketers and consumers. What is that gap? What needs to be done to fill it?

Rubin: I wrote a report called “Manage Cohorts, Not Brands,” which suggests that CPG manufacturers should be consolidating their brands not by categories, which is what they do today, but instead by consumers. So that they would market brands that appeal to the same group of consumers as opposed to brands that don’t appeal to that group. A good example would be looking at some of the General Mills brands. They organize their brands by category. These categories are by cold cereal or yogurt, to take a couple. If you look at usage, the best way to organize is by lifestyle or by consumer segments so that they could put their brands into an organizational structure that actually aligns those brands by lifestyle. So for example, in the General Mills example, a lot of consumers who buy Cheerios also buy yogurt but the company isn’t really leveraging that fact in its marketing efforts. Right now, most companies aren’t cross promoting because the brand manager for Colombo Yogurt doesn’t really care about selling Cheerios, but in fact the same consumer is purchasing both products.

iMedia Connection: At the conference you’ll be talking some about how new technologies will change the way manufacturers market their brands. Can you share any of this with us now?

Rubin: When I said new technologies, it’s this ability to target individual consumers as opposed to large groups. So e-mail is a technology that will change the way they can market to consumers. One example, which I think is a really interesting example, is to look at the diapers category. Instead of sending a coupon to a household, or having a household clip a coupon for a diaper, what you could do is you could offer them the ability to buy an annual supply of diapers online. And what you would mail to them would be vouchers so that when they go to the store they could pick them up and you could offer them a special deal. What it does for the manufacturer is it gives the manufacturer the opportunity to sell these diapers in bulk and actually retain the consumer’s business over the whole course of a year.

It’s the idea of selling direct, the idea of using e-mail to capture and win customers so you create e-mail databases so you can then target these consumers directly. It’s about leveraging your marketing dollars. A good example of using technology is today they’re using FSIs (the coupon insert sections in Sunday newspapers), that’s a media buy. So they buy media, they get it out there to 50 million households and they get a one and a half percent redemption. But the companies can’t call back those people who use the coupons, they don’t know who they are. So instead, you could market to those households by selling them in the FSI the opportunity to go online and register to save more. So you use the FSI to get to the audience, and then what you’ve done on top of that is you’ve offered them an opportunity to go online for more but what you’ve done is you’ve captured their e-mail address. So now you actually have someone you can call back and re-contact.

iMedia Connection: The question on the table for the conference is how can consumer packaged goods marketers build share of consumer and demonstrate effective ROI? Again, without sacrificing your presentation, can you give us your thoughts on that?

Rubin: It’s some of the things I’ve been talking about around e-mail marketing, the opportunity to reach these consumers broadly.