Wednesday
Brand Building on the Internet
Web sites for packaged foods and drinks make unlikely candidates for popular online destinations, since consumers cannot buy anything on the site and may not need much guidance on how to pour Planters Peanuts into their mouths or Ragu sauce onto their pasta.
But consumer packaged foods companies are drawing many more customers to their Web sites than in the past. And analysts say the sites are keeping those visitors in place long enough to etch their logos in the consumers' consciousness, to "brand" them, in packaged foods parlance. Certainly, the image of Mr. Peanut in a barbecue apron, using a Weber grill, makes at least a partial impression (www.candystand.com/planters/grill).
"They've found the recipe for success online," said Dawn Brozek, an analyst with Nielsen NetRatings, an Internet research company.
Ms. Brozek, who wrote a recent report on the online strategies of packaged foods companies, said that last month the top 10 sites of food and beverage makers attracted a total of 9.5 million visitors — only slightly fewer, for comparison's sake, than the number of visitors to the top 10 university sites. In July 2002, the top 10 food and beverage sites attracted just 5.4 million visitors.
A few years ago, most makers of packaged foods had "pretty dry corporate sites," Ms. Brozek said. "Now they've diversified into cooking content, games, contests, promotions."
And customers keep returning. Ms. Brozek said that roughly a third of the visitors return each month to sites like Kraft's Candystand.com — which promotes Lifesavers and Planters nuts, among other items, with games like Nut Vendor, in which the player assumes the role of a ballpark peanut hawker. Candystand, like other sites, will gather customers' e-mail addresses as they register for sweepstakes, then lure them back with offers of new recipes or products.
With a few notable single-product exceptions — like VanillaCoke.com and the M&M's site (mms.com) — the top food and beverage makers have migrated to what Ms. Brozek termed a "cohort" strategy, gathering several brands under one umbrella.
Take Kraft, which boasts 5 of the top 10 sites in the food and beverage category. For several years the company has followed a "brand portfolio" strategy, Kathleen Olvany-Riordan, the company's vice president for e-commerce, said. "Consumers don't wake up and say `What do I want to do today with Miracle Whip?' " Ms. Riordan said. "They do say, `What will I serve for lunch or dinner?' "
To that end, Kraftfoods.com, Kraft's flagship site, offers meal ideas, food news, instructional videos and recipes that are rated by the site's registered users, who tend to be homemakers. Much of Kraft's other fare is on the three game sites — Postopia.com, for cereals; Nabiscoworld.com for cookies and crackers; and Candystand for Lifesavers, Jell-O Pudding Bites and the like. They are meant to be playgrounds for the children who sway household buying decisions. Kraft says that the Web sites collect children's personal information only for purposes of awarding prizes offered on the sites and that it is not shared with other companies or used for Kraft's marketing purposes.
Ms. Riordan said that although the company always considered the Web a potentially important vehicle for advertising and customer loyalty, Kraft's enthusiasm for the medium grew stronger as the overall Internet audience increased. She noted that the Web now accounts for about 15 percent of the typical consumer's media consumption, a trend that continues to grow.
At the same time, she said Kraft has learned through experience what consumers want, and how to deliver it well — as in the most effective way to use the U.R.L., or Web address, in marketing. Instead of simply placing the U.R.L. in the tagline of a promotion, as in the early days, Ms. Riordan said, "now we'll use the U.R.L. and tie it to a consumer benefit" like the promise of new recipes, a sweepstakes prize or other initiatives.
That growing expertise, Ms. Riordan said, culminated most recently in a promotion to help roll out a new Oreo product, Uh-Oh! Oreo, which reverses the flavors of traditional Oreos, by making the cookies vanilla and the inner frosting chocolate. The promotion, involving online and offline advertising and promotional packaging, solicited consumer opinions on whether the company should continue to make the cookies (which, according to the advertisements, were originally the result of a manufacturing glitch).
Ms. Riordan said that by the time the promotion ended last month, more than 2.8 million people had voted and registered for the $10,000 sweepstakes. "Before the Internet, we might've gotten maybe half that many entries," she said.
Of course, the voters did more than simply enter their names in the sweepstakes. Participants gave Kraft their e-mail addresses — enabling the company to reach them with offers or news if the contestants are 13 or older — and they spent time surfing around the site and viewing what amounted to a continuous advertisement. "This was a much more efficient vehicle than ever before to immerse people in a new brand," she said.
Ms. Riordan said the Internet element of the promotion had helped increase sales of Uh-Oh! Oreos. "But whether it's by 2 percent or 20 or 80," she said, "we don't know."
Kraft has also used its brand sites to make good on its recent promises to help reduce obesity among consumers. On the Oreo site, for instance, the company offers information about its efforts to reduce trans fats in its cookies, as well as information about its low-fat Oreo cookies. And KraftFoods.com, Ms. Riordan said, features a "Healthy Living" section with a meal planner meant to encourage "healthy food ideas.".
Kraft, like other packaged food companies, is working to link online promotions to offline buying behavior, as more consumers use the Web and as the Internet continues to present itself as a cheap and potentially effective alternative to television, radio and print advertising. In Kraft's case, it is paying the audience research firm Nielsen NetRatings an undisclosed amount to survey its panel of 42,000 Internet users about their offline buying behavior.
"There's a long way to go," Ms. Riordan said, "but now we can at least start to quantify it."
Unilever, which makes food and household goods, was one of the earliest companies to devote a Web site to a particular consumer brand when it rolled out the Ragu Web site in April 1995. Since then, the company has grown more creative with its Web approach, said Steve Savino, vice president and general manager for Unilever's Ragu and Bertolli olive oil business units.
This month, for instance, Ragu began a promotion with the football commentator John Madden, calling on customers to rate the best of seven Ragu recipes and entering a contest to win a trip to the NFL All-Pro game in Hawaii, a new sport utility vehicle and $1,000 in spending money. "We're thinking a little bigger in terms of the grand prizes," Mr. Savino said.
The big thinking tends to stop short of selling goods directly to consumers online, not only because it would probably be unprofitable but because it could alienate the retailers who carry the products. The companies are getting better, though, at telling consumers where they can buy the products they are reading about.
Kraft introduced a product locator feature last spring that allows consumers to type in a brand and their ZIP code to find the nearest stores carrying the item. Other consumer companies have been slow to match that feature, analysts said, partly because it is a complex application to build and because most of a major packaged food maker's products are easily found in most grocery stores. But for for specialty dog foods, like Procter & Gamble's Eukanuba, which is sold only through specialty retailers and veterinarians, a locator service might prove valuable.
Manufacturers of other, higher-priced goods, typically are moving quickly toward product locator technologies, said Robert Wight, chief executive of Channel Intelligence, a company in Celebration, Fla., that provides online systems for Hewlett-Packard, Panasonic, Palm and others. Those manufacturers, Mr. Wight said, will generate more than $3.5 billion this year by simply telling people where to buy their products.
"By the time you're on the product page you're pretty convinced you're going to buy," he said. "This just keeps you from straying to another brand."
But consumer packaged foods companies are drawing many more customers to their Web sites than in the past. And analysts say the sites are keeping those visitors in place long enough to etch their logos in the consumers' consciousness, to "brand" them, in packaged foods parlance. Certainly, the image of Mr. Peanut in a barbecue apron, using a Weber grill, makes at least a partial impression (www.candystand.com/planters/grill).
"They've found the recipe for success online," said Dawn Brozek, an analyst with Nielsen NetRatings, an Internet research company.
Ms. Brozek, who wrote a recent report on the online strategies of packaged foods companies, said that last month the top 10 sites of food and beverage makers attracted a total of 9.5 million visitors — only slightly fewer, for comparison's sake, than the number of visitors to the top 10 university sites. In July 2002, the top 10 food and beverage sites attracted just 5.4 million visitors.
A few years ago, most makers of packaged foods had "pretty dry corporate sites," Ms. Brozek said. "Now they've diversified into cooking content, games, contests, promotions."
And customers keep returning. Ms. Brozek said that roughly a third of the visitors return each month to sites like Kraft's Candystand.com — which promotes Lifesavers and Planters nuts, among other items, with games like Nut Vendor, in which the player assumes the role of a ballpark peanut hawker. Candystand, like other sites, will gather customers' e-mail addresses as they register for sweepstakes, then lure them back with offers of new recipes or products.
With a few notable single-product exceptions — like VanillaCoke.com and the M&M's site (mms.com) — the top food and beverage makers have migrated to what Ms. Brozek termed a "cohort" strategy, gathering several brands under one umbrella.
Take Kraft, which boasts 5 of the top 10 sites in the food and beverage category. For several years the company has followed a "brand portfolio" strategy, Kathleen Olvany-Riordan, the company's vice president for e-commerce, said. "Consumers don't wake up and say `What do I want to do today with Miracle Whip?' " Ms. Riordan said. "They do say, `What will I serve for lunch or dinner?' "
To that end, Kraftfoods.com, Kraft's flagship site, offers meal ideas, food news, instructional videos and recipes that are rated by the site's registered users, who tend to be homemakers. Much of Kraft's other fare is on the three game sites — Postopia.com, for cereals; Nabiscoworld.com for cookies and crackers; and Candystand for Lifesavers, Jell-O Pudding Bites and the like. They are meant to be playgrounds for the children who sway household buying decisions. Kraft says that the Web sites collect children's personal information only for purposes of awarding prizes offered on the sites and that it is not shared with other companies or used for Kraft's marketing purposes.
Ms. Riordan said that although the company always considered the Web a potentially important vehicle for advertising and customer loyalty, Kraft's enthusiasm for the medium grew stronger as the overall Internet audience increased. She noted that the Web now accounts for about 15 percent of the typical consumer's media consumption, a trend that continues to grow.
At the same time, she said Kraft has learned through experience what consumers want, and how to deliver it well — as in the most effective way to use the U.R.L., or Web address, in marketing. Instead of simply placing the U.R.L. in the tagline of a promotion, as in the early days, Ms. Riordan said, "now we'll use the U.R.L. and tie it to a consumer benefit" like the promise of new recipes, a sweepstakes prize or other initiatives.
That growing expertise, Ms. Riordan said, culminated most recently in a promotion to help roll out a new Oreo product, Uh-Oh! Oreo, which reverses the flavors of traditional Oreos, by making the cookies vanilla and the inner frosting chocolate. The promotion, involving online and offline advertising and promotional packaging, solicited consumer opinions on whether the company should continue to make the cookies (which, according to the advertisements, were originally the result of a manufacturing glitch).
Ms. Riordan said that by the time the promotion ended last month, more than 2.8 million people had voted and registered for the $10,000 sweepstakes. "Before the Internet, we might've gotten maybe half that many entries," she said.
Of course, the voters did more than simply enter their names in the sweepstakes. Participants gave Kraft their e-mail addresses — enabling the company to reach them with offers or news if the contestants are 13 or older — and they spent time surfing around the site and viewing what amounted to a continuous advertisement. "This was a much more efficient vehicle than ever before to immerse people in a new brand," she said.
Ms. Riordan said the Internet element of the promotion had helped increase sales of Uh-Oh! Oreos. "But whether it's by 2 percent or 20 or 80," she said, "we don't know."
Kraft has also used its brand sites to make good on its recent promises to help reduce obesity among consumers. On the Oreo site, for instance, the company offers information about its efforts to reduce trans fats in its cookies, as well as information about its low-fat Oreo cookies. And KraftFoods.com, Ms. Riordan said, features a "Healthy Living" section with a meal planner meant to encourage "healthy food ideas.".
Kraft, like other packaged food companies, is working to link online promotions to offline buying behavior, as more consumers use the Web and as the Internet continues to present itself as a cheap and potentially effective alternative to television, radio and print advertising. In Kraft's case, it is paying the audience research firm Nielsen NetRatings an undisclosed amount to survey its panel of 42,000 Internet users about their offline buying behavior.
"There's a long way to go," Ms. Riordan said, "but now we can at least start to quantify it."
Unilever, which makes food and household goods, was one of the earliest companies to devote a Web site to a particular consumer brand when it rolled out the Ragu Web site in April 1995. Since then, the company has grown more creative with its Web approach, said Steve Savino, vice president and general manager for Unilever's Ragu and Bertolli olive oil business units.
This month, for instance, Ragu began a promotion with the football commentator John Madden, calling on customers to rate the best of seven Ragu recipes and entering a contest to win a trip to the NFL All-Pro game in Hawaii, a new sport utility vehicle and $1,000 in spending money. "We're thinking a little bigger in terms of the grand prizes," Mr. Savino said.
The big thinking tends to stop short of selling goods directly to consumers online, not only because it would probably be unprofitable but because it could alienate the retailers who carry the products. The companies are getting better, though, at telling consumers where they can buy the products they are reading about.
Kraft introduced a product locator feature last spring that allows consumers to type in a brand and their ZIP code to find the nearest stores carrying the item. Other consumer companies have been slow to match that feature, analysts said, partly because it is a complex application to build and because most of a major packaged food maker's products are easily found in most grocery stores. But for for specialty dog foods, like Procter & Gamble's Eukanuba, which is sold only through specialty retailers and veterinarians, a locator service might prove valuable.
Manufacturers of other, higher-priced goods, typically are moving quickly toward product locator technologies, said Robert Wight, chief executive of Channel Intelligence, a company in Celebration, Fla., that provides online systems for Hewlett-Packard, Panasonic, Palm and others. Those manufacturers, Mr. Wight said, will generate more than $3.5 billion this year by simply telling people where to buy their products.
"By the time you're on the product page you're pretty convinced you're going to buy," he said. "This just keeps you from straying to another brand."
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