Business and Marketing

They must locate and promote to the one out of every 143 consumers who make or break their new products.

Consumer packaged goods marketers have long been aware they play a high-stakes game. Growth for them depends on successful new products and line extensions, but the failure rate for new listings has long hovered at around 80%. Now a study released by Catalina offers them a cure for their age-old problem, difficult as it may be: Target the 0.7% of shoppers who account for 80% of the volume for a new food or beverage product.

That's right, in every grouping of 143 consumers, just one of them determines the fortunes of a new breakfast cereal, soft drink, or frozen dinner, according to the Checkout Coupons company's analysis of more than 260 million consistent shoppers at 30,000 drug, mass, and grocery stores.

“The percentage of households that make or break the success of new CPG products is very small, says Catalina SVP of Strategy Marla Thompson. “Our study shows that purchase-based targeting can be a cornerstone of successful new product launches.”

Of the 50 new food and beverage products analyzed, just eight showed shopper concentrations of more than 1% driving 80% of volume. Only one had a concentration surpassing 2%. The study also uncovered extremely low retention rates for new products, with just 11% of triers still engaged with a new item one year later.

Catalina defined a consistent shopper as one who shops at least two times every eight weeks for seven consecutive eight-week periods.

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The pact is Sysomos' effort to provide its clients access to anonymized and aggregated Facebook topic data.

Social intelligence company Sysomos today announced a partnership with DataSift to provide its clients access to anonymized and aggregated Facebook topic data.

Sysomos' social listening and analytics products—MAP and Heartbeat—will soon include the addition of the social networking behemoth's data. With that social data, those tools will attempt to provide marketers insights into what audiences are engaged by and sharing on Facebook about events, brands, subjects, and activities. 

“More than 1.4 billion people use Facebook to engage with what interests them, and well over half visit Facebook every day,” Lindsay Sparks, CEO, Sysomos, said in a release. “The crucial addition of Facebook topic data to the Sysomos platform will enable marketers, advertisers, and agencies to better understand customers; reach new, relevant audiences; and more importantly, deliver more targeted and relevant customer experiences.”

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But its CPM of $6.29 is almost double that of its owner's.

Picture this: Instagram bests its owner.

Instagram released its advertising API to third-parties last month and is already posting some positive numbers, according to Salesforce.com, whose Marketing Cloud is an Instagram partner.

Instagram's click-through rate for August thus far is 1.50%, almost double that of Facebook, its parent company. At 42 cents, its average cost-per-click is two cents higher than Facebook's. But while Instagram shows promise as a direct marketing tool, right now it may be a tad pricey for brand marketers. Its cost per thousand of $6.29 exceeds Facebook's to the tune of 90%.

Salesforce analysts say it's likely that Instagram's large format ad type contributes to its high engagement rate. “Instagram is a relatively new platform for digital advertising, but these results show it has the potential to be a powerful one,” says Marketing Cloud CEO Scott McCorkle.

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Marketers have been handed magic tech beans to lift them to unheard-of heights. But according to a new study, they are developing acrophobia.

In the old English fairy tale Jack and the Beanstalk, young Jack's cow stops giving milk and, on the way to the market to sell her, a man (Is that Marc Benioff?) gives him some magic beans. He plants the beans, a giant stalk grows, he climbs it, and finds himself in the lair of a giant counting his money. He steals a bag of gold and climbs back down the beanstalk. Then he climbs back up and steals a goose that lays golden eggs. On his third foray, he steals a harp that plays itself, but this time he is caught. The giant chases him and will surely kill him, so he cuts the beanstalk down.

Not a bad allegory for the advent of digital marketing, is it? Marketers have been showered with magic technological tools allowing them to erect towering new business platforms seemingly overnight. But the tools are so many, and the platforms so unwieldy, that few are able to keep it up and many may even daydream about—like Jack—chopping it down.

“We have this big responsibility on our shoulders now. It's going to make us or it's going to crush us,” said Liz Miller, SVP of the CMO Council.

This week the CMO Council released a report based on input from 268 senior marketing executives that placed them in two distinct camps as concerns digital marketing. Split almost 50-50 were the leaders who saw themselves ably working the system and the laggards who admitted they're adapting slowly or not at all.

“If you look at marketers' job descriptions today, they're doing a billion things. It's become a huge, massively important job,” Miller said. “Senior management has embraced digital and is saying, ‘Hey marketing, here are your nine million tasks for today.' So you have a lot of marketers reverting to their comfort zones, just grabbing the walls for a second.”

The poll indicated that marketing executives were in a tizzy managing the three legs of the digital stool—the API economy, the emergence of the digital enterprise, and the looming explosion of the Internet of Things (IoT). One of the most noteworthy findings was that leaders assigned all three of these areas high importance, while the laggards didn't. Asked what technology would “very significantly” impact customer engagement, only 28% of laggards named IoT compared to 89% of leaders. Three quarters of the pace-setters awarded similar status to digital enterprise and APIs versus only 43 and 24%, respectively, of slow adapters.

The dearth of digital proficiency among marketers became clearly apparent when they are asked how well they executed multichannel campaigns. Only 5% said they did it “extremely well,” and just 14% rated themselves “very good.” More than a quarter (27%) said they were slowly evolving in multichannel and 18% admitted they were “not good at this time.”

“Each one of these areas is complex,” Miller noted. “The access to third-party plug-ins through the API economy seismically shifts the very direction of commerce and data. All of a sudden one in-store experience in Best Buy also impacts Whirlpool. That leads directly into IoT, where it's not just my fridge telling me to pick up OJ, it's people sending out important data through their pacemakers or insulin monitors. And digital enterprise is not just about marketing, it's about supply chain.”

Miller said that this report, among the many reports issued by the CMO Council, sounded a singular alarm to her. “I got this overwhelming sense of marketers saying, ‘We're doing moderately well.' The fact that it's now seemingly okay to say ‘We're evolving a little bit' was terrifying to me.”

She wants to tell all those marketing Jacks and Jills running away from the giant to steel themselves, turn around, and face him. If they don't, they could well miss being a part of history.

“We're changing business! Marketing, the coloring-in department is changing business!” Miller exclaimed. “Those laggard marketers are going to go the way of brand marketers if they don't change.”

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Nutrition is the main concern among millennial mothers when preparing their child's lunch—more so than price and convenience.

Mobile may assume a bigger role this year, but another player in the back-to-school game has emerged: healthy foods. Indeed, marketers should take note that millennial mothers hold nutrition in a higher regard than even price and convenience.

According to a survey from Influenster, nine out of 10 millennial moms prepare healthy lunches for their children. Of this group, nutrition (88%) is the main concern—more so than price (65%) and convenience (52%)—when shopping for lunch food. In addition, gluten-free (8%) is the lowest concern; well-balanced (74%), tastiness (69%), low sugar (43%), and low fat (19%) are other concerns.

The survey—which polled more than 5,000 millennial moms—shows that six out of 10 millennial moms prepare their children's lunches differently than their mothers prepared theirs. On the other hand, millennial moms share a bond with the “old-fashioned” way in that despite the demographic being the most digitally connected generation of mothers, they still prefer to shop in supermarkets (88%) as opposed to online (7%). Big-box retailers (81%), farmer's markets (42%), local delis (23%), and convenience stores (13%) are their preferred places to do business. However, 57% do all their researching on the Internet before they head to the store.

Not much of a surprise as word of mouth (79%) is the top influencer for millennial moms trying to make a shopping decision. Online reviews (59%), social media (57%), brand websites (43%), television (37%), news websites (16%), and newspapers (15%) are the other influencers.

Top foods
Millennial moms rank the following packaged foods as healthy lunch box additions:

1. Yogurt (87%)
2. Cheese (82%)
3. Cereal/granola (72%)
4. Juice boxes (70%)
5. Peanut butter (67%)
6. Dried fruits (54%)
7. Milk (51%)
8. Nuts (49%)

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It acquires A/B testing and segmentation company Maxymiser.

Oracle added a new weapon to its marketing cloud arsenal today with the acquisition of Maxymiser, a company known for A/B testing and software that parses out metrics based on customer segments. An Oracle statement announcing the deal, which did not disclose terms, credited Maxymiser with being in possession of the “most powerful solution for optimizing Web and mobile customer experiences.”

Maxymiser is the latest plum to be picked among a slew of recent marketing cloud acquisitions among Oracle, Salesforce.com, and Adobe. The New York-based Maxymiser's client list includes Calvin Klein, HSBC Bank, Lacoste, Lufthansa, and Wyndham Hotels. Optimizely is one of its competitors.

The canned quote from Oracle's press release expresses the same hopes for multichannel relevancy and personalization that accompany all of these acquisitions. “Companies are increasingly seeking innovative ways to differentiate their brands while increasing both ROI and loyalty based on optimized customer experiences,” was the reasoning behind the buy attributed to Thomas Kurian, Oracle's president of product development.

Based on its segmentation analyses, Maxymiser's cloud-based software can deliver customers predictive offers and product recommendations based on their online behavior.

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Direct mailers and catalogers worry that the Postal Service won't be able to predict on-time delivery by the advent of the fall mailing season.

Late mail increased by 494 million pieces in the first six months of 2015, a 48% rise over the same period last year, according to a management alert released last week by the Office of the Inspector General (OIG) of the U.S. Postal Service. Due to drastic changes in service standards implemented in January, a rise in delays was expected, yet the sheer volume of lateness has big mailers concerned about the status of their fall mailings.

“The Postal Service made some massive changes with the 24-hour operational clock that has taken some time to recover from,” said Hamilton Davison, president and executive director of the American Catalog Mailers Association.  

Single-piece First Class Mail was eliminated in January and a significant portion of Standard Mail was shifted from a two-day to a three-day service standard. USPS backed the move in part with a 2014 survey of consumers, 80% of whom said that the change would have no effect on them or that they could adjust to the change.

Mailers agreed to adjust as well, and they expected a falloff in delivery times. What they're more concerned about is being given ample time to adjust to them.

“At last weeks' MTAC  meeting, USPS officials explained why they feel ready to handle the busy fall mailing season with the usual level of performance,” Davison said. “But we need to have better mechanisms to understand what it is actually running rather than receiving after-the-fact reporting. Given notice, we can adjust to most anything.”

The Postal Service noted that several severe winter storms exacerbated the challenges presented by network and operational changes. Indeed, the OIG report notes that on-time delivery improved along with the weather. There were 472 million late deliveries in January 2014, 85 million in April, and only 64 million in June.

The Postal Service uses an External First Class Measurement system, which has IBM sending out test mailings and tracking them to obtain a view of delivery standards. It's an imperfect metric, said Grayhair Software analyst Jody Berenblatt, something USPS itself recognizes. “We can have a better system when and if the Postal Regulatory Commission approves the Postal Service's request to perform real-time measurement itself,” she said.

But bad metrics weren't the problem in the first half of 2015, Berenblatt maintained. “I get the weather and the significant operational changes, but they said they sent out tiger teams to fix the problem, so why wasn't it fixed?”

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Five mailers groups petition the PRC to define what constitutes trivial rate increases in operational changes installed by the Postal Service.

Upset over Postal Service procedure in which operational changes translate into de facto rate increases for certain classes of mail, a coalition of mailer associations filed a petition with the Postal Regulatory Commission (PRC) to address the problem yesterday.

At the heart of the group's petition is a desire for the PRC to define the legal term de minimis, literally “trivial,” in relation to changes made in postal operations. Currently, the Commission defers to the Postal Service's estimation of a de minimis increase in rates when instituting a change. Mailers argue, however, that attendant costs that go along with procedural alterations can be exorbitant, or even prohibitive.

One current example is the Postal Service's effort at creating the “perfect bundle” for the Automated Package Processing System (APPS) to minimize costs of broken bundles. “We have situations where certain mailer providers could not afford to make the investment in new equipment needed to create the perfect bundle,” says Joe Schick, director of postal affairs for Quad/Graphics. “It would change the cost structure and outweigh the benefits.”

The petition also asks the PRC to create a rule-making proceeding that would require the Postal Service to file a notice of an operational change and give mailers at least 15 days to respond with their evaluations. Should, based on those comments, the PRC decide that the proposed change will have a greater than de minimis rate effect, the Postal Service should be ordered to file a notice of rate change, say mailers.

“[The Postal Service comes] at you with a proposal: 'This is for efficiency and here's what we want you to do.' That change does not currently require a rate review in terms of what impact it may have on the rate cap,” notes Gene Del Polito, president of the Association for Postal Commerce (PostCom). “They don't even get around to making any determination at all whether it costs the mailers anything. We are asking the PRC to tell the Postal Service, ‘Hey, here's a yardstick.'”

Changes afoot in procedures for the Intelligent Mail barcode and pallets for the Flats Sequencing System could also add to mailers' postal costs above and beyond a CPI rate increase, mailers contend. Groups who took part in the filing of the petition include PostCom, the Alliance of Nonprofit Mailers, the Major Mailers Association, the Association of Magazine Media, and the National Postal Policy Council.

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