The Internet is breeding newly empowered consumers who are turning the old notions of branding and marketing on their heads, the co-founder of Reflect.com, Procter & Gamble’s Internet marketing experiment, told delegates to Strategy’s Online to Profit conference last week in Toronto.
Not even a global marketing powerhouse like Procter & Gamble can ignore the fundamental influence of the Internet, said Nathan Estruth, marketing director of Procter & Gamble’s I-Ventures – the Internet arm of the Cincinnati, Ohio-based packaged goods giant.
‘We have gone from the old-world of brand as a finite definition – we know what it is, we have created it in our hallowed halls of marketing and we push it out to the world – to a brand that becomes what an individual consumer desires it to be. And if it doesn’t have the flexibility to become that, it is in danger of becoming obsolete,’ he warned.
P&G has long specialized in producing products designed to appeal to the largest number of consumers. But those products have little place in the Internet marketplace where Web-savvy shoppers are demanding unique and personalized products and services, he said.
‘The products that have the most mass appeal are the products that move the fastest through that retail space and thus give us the most return for our investment,’ he said, explaining the long-held view within P&G and many other packaged goods companies. ‘But the Internet has flipped that on its head. We have gone from limited SKU selection to an infinite SKU selection (on the Internet).’
Reflect.com, P&G’s first major Internet venture, is an online cosmetics marketing site created in partnership with Calgary-based interactive marketing agency Critical Mass that allows individual consumers to buy products that have been customized and packaged for them.
‘We don’t care about the brand name being on the package,’ Estruth said. ‘All we care about is shelf impression, but a different kind of shelf impression. It’s not the shelf impression of what it will be in the store because it is never there. It is the shelf impression of when a woman puts it on her vanity.’
The Internet is forcing P&G to re-examine the way it advertises all its products, including cosmetics, of which it sells about US$7.5 billion worldwide annually. P&G is one of the world’s largest advertisers, spending more than US$3 billion a year – with as much as 95% of that on television.
However, the company is being forced to examine new ways of communicating with consumers.
‘The mass media era is over,’ Estruth said. ‘I am a bit of a radical. I go around and yell at all the brand managers and marketing directors telling them they that have their head in the sand because in three years that talent…is basically going to be meaningless. The high-value consumers are going to be demanding we talk to them one-on- one and we don’t know how to do that.’
