The Path of Today’s CPG Brands

Increased competition from niche brands has not only weakened traditional brand loyalty, but has also created a paradigm shift for how CPG brands do business. Our Director of Client Development, Cyndi McMaster, explores the challenges and opportunities for today’s marketers.

Read the full article on Retail TouchPoints.

What marketers are missing about zero-party data

What is zero-party data? It’s a key that can unlock entirely new models for customer engagement, if marketers embrace it. It can also fulfill the promise of true personalization and build a foundation of loyalty and trust with your audience.

Our SVP of Marketing & Client Development, Christian Jones, examines how to leverage zero-party data to drive successful engagement. Read the full article on VentureBeat.

Advertise in the Metaverse? It’s Complicated.

If the metaverse becomes a place where billions of real people interact and have expendable currencies, brands will leverage experiences to drive consumers down a purchase funnel, just as they do in the physical world. But how that ecosystem of brand/advertiser, media and consumer take shape is still in flux. Our SVP of Marketing Christian Jones has some things to consider when jumping in.

Advertise in the Metaverse? It’s Complicated.

If you’re confused about the metaverse — what it is, how it’s changing the way people interact with each other and brands, whether marketers can create value from metaverse ads, etc. — you’re not alone. The metaverse is still taking shape, and the long-term implications of ephemeral or persistent virtual worlds that can be accessed via augmented reality (AR), virtual reality (VR), mixed reality (MR) or even a humble browser (via platforms like Decentraland or Roblox) are as yet unknown.

A recent article in Wired compared today’s discussions about the metaverse to people talking about the internet in the 1970s. The pieces of a new way to interact are coming together, and it has massive implications for society and enormous commercial potential, but we’re not sure what final form it will take. Personally, I think of the metaverse as “XR”, not as a catchall for AR, VR or MR but instead as “extended reality”. In the metaverse, we’ll interact as virtual extensions of ourselves in some form, human or otherwise.

Marketers are curious about the potential of the metaverse, and some are frantically trying to get up to speed due to fear of missing out. Since the metaverse is still taking shape, it makes sense for marketers to watch closely and understand the factors that may influence its direction. How might the metaverse emerge and what could it mean for brand building and marketing now and in the future?

Driving Virtual Consumers Down a Real Purchase Funnel

If the metaverse becomes a place where extensions of billions of real people interact and have expendable currency — whether via in-world crypto, tokens or offline official government currency accessible via digital wallets — brands will have an opportunity to use advertising and/or curated experiences to drive consumers down a purchase funnel, just as they do in the physical world. But how that ecosystem of brand/advertiser, media and consumer take shape in the metaverse is still in flux.

In the physical world, the mechanics of advertising are well known. We’re familiar with ad units by channel, and we can calculate how much those units or impressions will cost and factor in the value of an impression in terms of meeting critical KPIs. That’s not to suggest it’s simple — the real world ecosystem is fractured and constantly in flux, but it’s knowable, manageable and familiar too.

But in an entirely new world, how do we value a new set of ad units or XR engagements? Audiences are often anonymous, and demographics are potentially inscrutable. Is the person behind the avatar a 63-year-old professor or a high school sophomore? We don’t know, so how can a brand or advertiser measure value? Non-fungible tokens (NFTs), which provide proof of ownership of a digital asset, are forming the connecting bridge, for the moment at least.

NFTs function as a talisman for brands, a way to engage virtual audiences and confer status on NFT holders. Brands like Stella Artois, Papa John’s, Acura, the NBA and many others are experimenting with NFTs, some to promote products or provide product functionality, others to highlight good causes and support charitable work. AdAge keeps a continually updated list of how brands are using NFTs.

Another way brands connect with virtual consumers is by creating experiences on platforms like Roblox. At Nikeland on Roblox, one of the earlier, high-profile brand entries in 2021, users could dress their avatars in branded sneakers and apparel, play games and unlock sports superpowers. Branded virtual apparel as a digital commodity is a straightforward implementation. Gucci just upped their profile from Gucci Garden to Gucci Town – dropping virtual bags and apparel within limited-time windows to style your Roblox avatar. Other recent brand implementations include a McLaren F1 Racing experience and a Chipotle Burrito Builder event – the possibilities are staggering.

The Value Conundrum

As these examples illustrate, major brands are already betting on the metaverse, and their participation generally falls on one of two tracks. The first is brand integration, like the user experience strategy Nike, Gucci, Hyundai or Chipotle have pursued on Roblox. Users can interact with the brand, hopefully developing an affinity of lasting duration that extends to the brand’s products in the physical world.

The second track is to create NFTs and associated content, placing assets in virtual storefronts or other digital venues and marketplaces. This strategy requires finding a way to create scarcity because virtual land and digital content like NFTs are valuable in proportion to their perceived authenticity and ability to generate demand that exceeds supply. As Scott Galloway observed “credible scarcity and authenticity will unlock real value in digital markets”.

So, the question remains: what is the value of a potential customer interacting with an avatar brand representative in your virtual apparel showroom? What’s the value of out-of-home signage for your virtual showroom if placed on a plot of land adjacent to Snoop Dogg’s virtual plot? How much will it cost to design and build a truly immersive virtual brand environment, and what’s the return on that investment?

The truth is, we just don’t know yet. It’s not a coincidence that most of the brands now active in the metaverse are there to drive awareness rather than conversions, at least so far. The metaverse may develop in unexpected ways, so for marketers who want to get their digital feet wet, now is a good time to watch closely, drop into some virtual worlds and interact with whoever is there now. Just like traveling to a new country in the physical world, take some time to observe with an open mind and respect the local customs of that corner of the metaverse. It’s complicated, but then again, isn’t any new world?

Personalization at Scale: What Synthetic Media’s Rise Means for Brands

Advancement in artificial intelligence (AI) is giving rise to synthetic media. But is it something brands should lean into? Here, Christian Jones, head of marketing, Hawthorne Advertising, discusses synthetic media’s advantages and how marketers can integrate it into their brand strategy.

 

Synthetic Media Can Drive Personalization at Scale

Consumers expect personalization. It’s table stakes in 2022, and brands that can’t deliver the personalized content people expect are at risk of losing customers to competitors who can. But while companies of all sizes can define customer segments, it’s difficult to personalize digital content using traditional methods due to the expense. Smaller companies and startups, in particular, find the price tag impossible.

The emergence of synthetic media makes producing personalized content fast, easy, and affordable.

Synthetic media, as defined by Wikipedia, is “a catch-all term for the artificial production, manipulation, and modification of data and media by automated means, especially through the use of artificial intelligence algorithms.” In sum, it’s content produced by technology, not by humans directly. The most visible type of synthetic media at this stage is “deepfakes.” While there are countless creative examples, the Tom Cruise deepfake is often referenced based on his global familiarity and an admirable character impression. But what if customers could interact with your brand’s spokesperson or representative as a deepfake, as museum visitors in Florida did with surrealist painter Salvador Dalí? This kind of interaction could be game-changing.

Deepfakes (and their more nefarious implications) aside, synthetic media has many non-video applications that are immensely useful, including AI-written text generation, music composition, realistic human photogeneration, voice synthesis, and more. As technology advances, the toolsets for creation will become easier and more accessible.

For specific examples of how synthetic media may be of immediate use to brands, consider the avatar as a virtual spokesperson and brand representative. What if technology could render your products already on a consumer or an avatar that represents your target audience? It’s easier to see yourself buying shoes or a new hoodie if you’ve already tried it on, creating brand affinity within audience segments.

In Roadrunner, the Anthony Bourdain documentary, filmmakers leveraged synthetic media to create a realistic voice-over from Bourdain that he never actually voiced. Synthetic media also creates new possibilities for companies with a global customer base. This is deeply distressing to anyone who knew or loved the late author and television star. But it does illustrate the possibilities of editing and creating video content with synthetic media.

After developing video content with a host speaking a message in one language, synthetic media toolsets make it simple to translate a video message and “voice-over” into dozens of other languages. Creating new ad spots without additional voice-over recording, reshooting, or dubbing? It’s almost unheard of. Script changes are also a snap — edit the script, and the facial movements and VO follow along. The tools to generate synthetic media can essentially eliminate traditional “linear” production processes for localization, customization and personalization.

How Synthetic Media Will Evolve in the Near Term

The advancements in the production capabilities to generate synthetic media are evolving quickly, so it’s a good idea for brand marketers to know its advantages and understand its limitations. Currently, one of those limitations is the uncanny valley phenomenon. As the technology evolves and target audiences become accustomed to synthetically generated content, that will likely be less of a concern. But a measured approach over the next 2-4 years is probably best.

Synthetic media is already making inroads with consumers, and the acceptance rate of the emerging technology may follow a trajectory similar to photo filtering, widely popularized by Snap and Instagram. Photo filters have been a gamechanger in the photo-sharing space because algorithm-driven platforms make incredibly complex operations simple for everyday users. That’s starting to happen with synthetic media too.

Younger consumers are experts with filters on Instagram, more receptive to tools like digital face-swapping technology and more comfortable interacting through digital personas. Platforms like Rosebud let users map their facial expressions onto avatars to tell stories and bring old photos to life, giving users a “decentralized Hollywood on your laptop,” according to the creators.

Integrating Synthetic Media Into a Brand Strategy

As synthetic media usage on consumer platforms grows, the impact on brand marketing will increase because the potential advantages are massive. In addition to the ability to personalize at scale, synthetic media can fundamentally change concepts like spokesperson name and likeness usage. This provides brands with PR crisis-proof spokespeople (since non-human avatars are impervious to scandals, for now at least) and boosts the productivity of human spokespeople by reducing the need for recording sessions.

Brand marketers will need to be thoughtful about how they integrate synthetic media into their strategy. For companies that have a synthetic and/or tech-forward focus, it might be a natural fit, whereas brands that are high-touch and/or human-centered should proceed cautiously. The target customer is also a consideration; younger audiences are definitely more receptive.

It hasn’t fully escaped the uncanny valley, but synthetic media and other technologies will eventually automate many creative processes associated with video production, including scriptwriting. As the palette of tools becomes more advanced, marketing, as we know, will change; but we’re not there yet. For now, brand marketers should keep a sharp eye on the explosion of new tools to exploit this new tech and be ready to jump in when the time is right.

The Great Consumer Reset

Lady using mobile phone
Credit: Getty Images by Elena Noviello

2022 is in full swing, and while marketers are “innovating” with applications of new dressings on old sales models, many are missing the paradigm shift that’s also upon us. The machinery of consumerism is in disrepair: supply chains are broken, prices are rising on household goods and other items thanks to inflation, the U.S. Postal Service is intentionally slowing down, and many shelves are quite simply bare. Strong headwinds, to put it mildly.

It’s important to realize that it’s not just the mechanics of efficient supply and demand that’s been disrupted. There’s a psychological component that has been building for years, and a seismic shift in the way people think about buying goods and services has already occurred. This year, the “Great Consumer Reset” may show up in unexpected ways, and marketers need to be ready.

The Shift in Consumer Thinking Was a Long Time Coming

We experience earthquakes as sudden events, but in reality, pressure builds slowly and almost imperceptibly until tectonic plates shift in a sudden release. Similar pressures are at work in the Great Consumer Reset, which has been building for more than a decade. Millennials and Gen Z experienced the Great Recession and the failures of previously solid institutions and economic ideals during their formative years, which made a lasting impression.

Unsettling political and socioeconomic events sowed seeds of doubt about ingrained cultural concepts, including immediate gratification for consumers, globalism, and capitalism itself. Climate change is another pressure that’s impossible to ignore. Add the devastation and confusion of the pandemic to the mix, with the resulting global economic dislocation and social isolation, and millions are rethinking how they’ve ordered their lives.

This resetting of priorities may be what’s prompting record-breaking numbers of Americans to leave their jobs. People are questioning what they need and want, and they’re reassessing what they’re willing to do and how much they’re willing to spend to get it. And it’s all happening as millennials and Gen Z are stepping into their peak purchasing power as consumers. A general theme that seems to be emerging is simple: less is more.

That doesn’t necessarily mean people will spend less this year, though inflationary pressures will affect budgets. Marketers need to keep in mind that the purchase consideration timeline has lengthened, making impulse buys less likely. People are taking more time to think about the necessity of a purchase, considering DIY options and assessing brand values before clicking “proceed to check out.”

Marketing After the Great Consumer Reset

So, what does this mean for companies that produce goods, and marketers who sell them? Products will need change to meet emerging consumer expectations. Sustainably sourced and ethically produced goods have already gained mainstream traction. That trend will accelerate, affecting industries like fast fashion and other sectors with a reputation for toxic production processes and negative environmental impact. Inflation will drive price sensitivity, but consumers will also take time to evaluate their needs and assess production processes and the impact of their purchases.

The Great Consumer Reset could lift up companies that focus on small-batch production, hyperlocal products, artisan goods and farm-to-table ecosystems. The shift in mindset opens up new opportunities for companies that stay in sync with evolving expectations and marketers who tell a compelling story that aligns with customer values.

Turning Customers Into Brand Advocates

For marketers, the most salient fact is that the purchase funnel has changed. There’s now an extended consideration phase. Broken supply chains forced consumers to wait, but now waiting and taking the time to consider broader priorities has become a habit. Marketers can adjust to that with a sequential messaging strategy that goes well beyond product features and instead becomes a timely and honest narrative during the extended consideration phase.

Features and benefits are still important — potential customers need to know that the product provides what they need. But now, there’s an opportunity for marketers to address consumers’ other priorities by talking about what the brand is doing to create a greener, more just world, whether through sustainable sourcing, ethical business practices, or contributions to charitable causes.

Marketing in general after the Great Consumer Reset will be different because priorities and expectations have shifted. Marketers will need to give people a deeper reason to buy and a true, verifiable story that builds trust in the brand, turns customers into advocates, and drives long-term value and return on investment.

Christian Jones is currently the head of marketing at Hawthorne Advertising and brings over 15 years of proven success in business development and sales, creative digital media, and technology to his role.

OK Boomer: How to Sell Online to Consumers Age 60 and Up

When the Baby Boom generation came of age in the U.S., it was the largest generational cohort in history. Boomers reshaped product marketing as the then-most-coveted consumer demographic and also as creatives who changed the advertising world. But the rise of the internet and even more populous cohorts shifted merchant focus to digital natives who buy online: Millennials and Gen Z.

Then 2020 happened, and the pandemic drove Boomers to embrace online shopping in droves. A study cited in The Washington Post says Boomers are now the fastest growing segment of online shoppers, spending 49% more online in 2020. Boomers also have the highest level of disposable income, and their brand loyalty makes online merchants newly eager to attract and retain them as customers. But how?

Find Boomers Online and Advertise Where They Are

While their Millennial children and Gen Z grandchildren might scoff at their digital chops, most Boomers are tech savvy and online, they’re just not on the same apps. For example, Millennials love Instagram, with almost 60% saying they are active users. Less than a quarter of Boomers are on Instagram, but nearly 60% are on Facebook, so marketers targeting Boomers should plan social outreach accordingly.

Another thing to keep in mind is that Boomers tend to index much higher for linear TV than younger generations do. That means ad buys on traditional network, cable and syndicated programming can effectively reach this demographic at scale more than campaigns that are focused on streaming media channels that demand higher CPMs. That said, 70% of Boomers are on YouTube and nearly a third use Pinterest, so campaigns on those channels can work if the content is relevant to

Another generational consideration to keep in mind is that while Boomers are definitely online and use their devices (desktops and tablets more often than phones) to conduct product research, they tend to rely on top search results rather than delving more deeply. So, paid search is a good strategy for reaching this group, as is raising page rankings organically.

Keep Boomer Customers When the Brick and Mortar World Reopens
Boomers are typically loyal customers if a brand meets their service expectations and offers good value. During the pandemic, familiar brands like Target and Walmart and many regional grocery chains capitalized on the shift to online buying by making the process as frictionless as possible for Boomers. The question now is, will Boomers resume their old shopping habits when the virus is under control?

There’s plenty of evidence to suggest they won’t. As one retail consulting firm CEO put it in The Washington Post article, “There’s going to be a lot more mixing and matching: ‘Maybe I want to go to the store to squeeze my own vegetables, but I’ll get non-perishables and dry goods delivered.’” So, how can retailers make sure their Boomer customers keep shopping online?

Digital offers and coupons can help. Like any other demographic, Boomers respond to bargains, and digital coupons and deals are a great way to engage shoppers at the top of the sales funnel. Boomers also tend to engage with longer-form content and print ads at higher rates than other generations, so those can be productive channels for digital coupons or offers, such as print ads with a QR code.

After the Boomer Business Boom
Retailers who sell 100% online and those who have brick and mortar stores that grew their online sales during the pandemic have something in common: both want to sustain the growth of ecommerce sales, which require less overhead. As a practical matter, that means retaining new customers who were first-time online buyers last year, many of whom will be Boomers.

Techniques that recreate the retail experience online can help merchants retain shoppers who are more accustomed to the in-person store experience. Online campaigns that drive in-store traffic can also work well. Digital video targeted to the Boomer demographic and delivered on frequently used channels can be an effective strategy, and continuing convenient offerings like curbside delivery can also help.

The pandemic showed that even a consumer group that was hesitant to fully embrace ecommerce would do so in huge numbers when they had to. Boomers remain a large, affluent and highly desirable customer segment. Millions of Boomers became online shoppers last year out of necessity, but soon it will be up to ecommerce retailers to earn their business when they have other choices.

Christian Jones
About the Author: Christian Jones is currently the Head of Marketing at Hawthorne Advertising and brings over 15 years of proven success in business development and sales, creative digital media, and technology to his role. His work has been nominated for Webby and Grammy Awards.