How america searches cpg

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How america searches cpg

  1. 1. HOW AMERICA SEARCHESConsumer Packaged GoodsSurvey conducted by Harris Interactive®Report written by iCrossing REPORT December 2006 The consumer packaged goods (CPG) industry generates nearly $2 trillion in sales in the U.S. alone, and CPG companies are second to none when it comes to total advertising expenditures. Although they will spend an estimated $15.6 billion to advertise online in 2006, according to PricewaterhouseCoopers and the Interactive Advertising Bureau, this spending accounts for just one percent of their total advertising outlay. CPG marketers should consider increasing their use of online and search engine marketing, targeting leading search engines, retailer websites as well as brand and specific product sites. These channels represent opportunities for engaging affluent and female consumers and reinforcing key brand attributes around three distinct consumer interests: finding offers, locating information and conducting commerce. In particular, as marketers focus on driving on and offline purchasing conversions, they should apportion their Web collateral with an eye to the high degree of correlation between search activity and buying intent. To better understand the online opportunities available to CPG marketers, iCrossing commissioned Harris Interactive® to conduct a survey of the online adult population in September 2006, concentrating on how and the degree to which the online adult population in the U.S. searches for consumer packaged goods online, the types of websites they frequent, the factors driving them to search for CPGs online and their attitudes about buying products both on- and offline. WOMEN LEAD CPG SEARCH ACTIVITY In terms of the frequency of search activity among online adults in the U.S., 39% confirmed they have performed a search for CPGs online, with one in five (20%) indicating they do so at least monthly and one in ten (9%) claiming they do so weekly. This puts CPGs in the same rank as real estate and financial products and services, but well behind media and entertainment, which remain key ingredients in the weekly online diet of online adults. FREQUENCY OF SEARCHING FOR CONSUMER PRODUCTS ONLINE FIGURE 01 How often do you search for the following consumer products online? (daily, several times a week, once a week, 2-3 times a month, once a month, less than once a month, never) Base: U.S. Online Adults (n=2,345) 100% 80% 60% 40% 20% 0% Ever Monthly Weekly Media (such as books, music, movies/video) Financial products and services Entertainment Real estate Electronics Consumer packaged goods (e.g. grocery store items) Travel and hospitality Other products © Copyright 2006. iCrossing, Inc. | www.icrossing.com Atlanta | Chicago | Dallas | New York | San Francisco | Scottsdale | 1.866.620.3780 1
  2. 2. REPORT | December 2006HOW AMERICA SEARCHES: CONSUMER PACKAGED GOODS Several characteristics about those who have ever searched for CPGs stand out: they are likely to be well educated, wealthy and female and fall into the 35-44 age bracket. Education, income and gender disparities tend to even out as search frequency rises, but in general, the offspring of baby boomers constitute an attractive target demographic for most home products, particularly for marketers of clothing and cosmetics, for which women are far more avid searchers than men. SITE PREFERENCES GENERATE OPPORTUNITIES CPG searchers make nearly equal use of search engines, retailer websites (such as costco. com), and brand/product sites (such as bettycrocker.com and tide.com) to search for CPGs online, with 67% citing search engines, 61% selecting retailer websites and 61% choosing product and brand sites. By contrast, only about 20% to 25% go to shopping comparison sites like bizrate.com and product ratings sites. Women are considerably more likely than men to frequent product and brand websites (67% versus 52%, respectively), while men are nearly twice as likely as women to go to product ratings sites (25% versus 13%, respectively). The scope of this online searching activity puts brand marketers in the driver’s seat because they do not have to try and lure back potential customers; those customers already go to their sites or are looking for branded product content on search engines and retailer websites. In targeting these different audience segments, CPG marketers should bear in mind that search engines are more effective vehicles for reaching younger (18-34 year-old) audiences practiced in starting their online sessions with search, while retailer and product sites are more likely to attract CPG searchers in the 35-44 and 45-54 age groups. TYPES OF SITES VISITED TO SEARCH FOR CPG PRODUCTS, BY AGE FIGURE 02 What types of sites do you go to in order to search for these products? Please select all that apply. Base: U.S. online adults who search for consumer packaged goods online (n=1,071) Search engines Retailer websites (such as Costco.com) Product and company websites Total (n=1,071) (such as bettycrocker.com, kraft.com) 18-34 (n=349) 35-44 (n=217) Shopping comparison sites 45-54 (n=202) (such as Bizrate.com, 55+ (n=303) MySimon.com, Nextag.com) Product ratings sites Other website(s) 0% 10% 20% 30% 40% 50% 60% 70% 80% © Copyright 2006. iCrossing, Inc. | www.icrossing.com Atlanta | Chicago | Dallas | New York | San Francisco | Scottsdale | 1.866.620.3780 2
  3. 3. REPORT | December 2006HOW AMERICA SEARCHES: CONSUMER PACKAGED GOODS FOOTWEAR, APPAREL AND FOOD DOMINATE SEARCH QUERIES Among specific product categories, footwear and apparel, for which woman are far more avid searchers than men, generate the most interest, followed by food items, personal care products, pet food and supplies and cosmetics. Interestingly, the gender skews seen with the clothing and cosmetics categories are not evident with food, beverages and dietary supplements, suggesting more equal decision making about what goes on the table as well as a similar preoccupation with overall health. Respondents from households with children appeared to have slightly greater than average likelihood to search for items such as footwear and apparel, cosmetics, household cleaning products and perfume. By contrast, higher household income does not necessarily correspond to greater than average search activity. Households earning under $35,000 per year appeared to be more eager searchers for food, household cleaning items, dietary supplements and beverages than are $75,000+ homes. TYPES OF CPG PRODUCTS SEARCHED FOR ONLINE, BY GENDER FIGURE 03 What types of consumer packaged goods do you search for online? Please select all that apply. Base: U.S. online adults who search for consumer packaged goods online (n=1,071) Footwear and apparel Food items Personal care products (such as toothbrushes, hand cream) Pet food and supplies Total (n=1,071) Cosmetics Men (n=503) Household cleaning products Women (n=568) (such as cleansers, detergents) Dietary supplements Beverages (such as soda/soft drinks, juice, water, beer/spirits) Perfume Tobacco products (such as cigarettes) Other consumer packaged goods 0% 10% 20% 30% 40% 50% 60% 70% © Copyright 2006. iCrossing, Inc. | www.icrossing.com Atlanta | Chicago | Dallas | New York | San Francisco | Scottsdale | 1.866.620.3780 3
  4. 4. REPORT | December 2006HOW AMERICA SEARCHES: CONSUMER PACKAGED GOODS INFORMATION, OFFERS AND PURCHASING DRIVE SEARCH ACTIVITY CPG searchers’ online activities revolve around finding special offers and coupons to use offline (60% and 52%, respectively, indicated these as reasons for searching) and locating information (general as well as about new and upcoming products and ways to use products they already own). The extent of this activity spells opportunities engagement, comprising use of offline assets to build and maintain customer relationships. CPG marketers can take cues from cereal manufacturers like Post, for example, which puts calls to action on its product packaging to direct consumers to postopia.com, a product site that facilitates interaction through gaming and other “info-taintment” vehicles. Interest in commerce also motivates online adults to search for CPG products online: 53% search to find stores where they can buy CPG products offline while 49% search with a more general intent to purchase, either off- or online. Of particular note, online adults in higher income households appeared more likely to cite interest in buying products or finding stores where they can buy products offline as reasons for conducting their CPG searches than those in lower income homes. REASONS FOR SEARCHING ONLINE FOR CONSUMER PACKAGED GOODS, BY GENDER FIGURE 04 For what reason(s) do you look for consumer products online? Please select all that apply. Base: U.S. online adults who search for consumer packaged goods online (n=1,071) To see if the company has any special offers To look for coupons to use in a store To look for sweepstakes/contests to enter To find more information about them To see what new products the company is offering or planning to offer To look for ways to use the companys products (such as recipes, accessories, activities) To find information about the company (such as corporate philosophies and policies, job openings) To look for stores where I can buy products offline To buy products To see if the company has any games/screensavers To watch the company’s commercials Other 0% 10% 20% 30% 40% 50% 60% 70% Total (n=1,071) Men (n=503) Women (n=568) © Copyright 2006. iCrossing, Inc. | www.icrossing.com Atlanta | Chicago | Dallas | New York | San Francisco | Scottsdale | 1.866.620.3780 4
  5. 5. REPORT | December 2006HOW AMERICA SEARCHES: CONSUMER PACKAGED GOODS There is little evidence at this point to indicate that CPG searchers are interested in seeking out CPG companies’ video advertising, with just four percent citing this as a factor in their searches. As a result, advertising on or posting commercials to sites such as YouTube, Yahoo! Video and MySpace are less effective avenues for connecting with the overall audience of CPG searchers. There is very limited data to suggest that online males in the 18-34 and 35- 44 age brackets are slightly more likely than average to seek out CPG commercials online. Similarly small samples indicate that online males in the 18-34 and 35-44 age groups and online females in the 35-44 age bracket are the most likely to seek out CPG company- sponsored games, screensavers, videos and ring tones, making these segments to watch in terms of targeting emerging ad formats. However, in both of these two cases, the data should only be used directionally. Synchronizing search marketing and display advertising with the creative in high-cost, high- visibility television commercials and placing those commercials on brand sites may still be worthwhile, however, especially given the high percentage of CPG consumers who do their searching on product and brand sites. In general, TV spots remain effective branding vehicles and even if CPG searchers currently are not seeking them out online, TV ads remain important drivers of search activity and purchase intent. And for searchers already predisposed to visiting brand or product sites, posted commercials can reinforce branding goals and raise engagement metrics on specific product sites. This kind of offline-to-online synergy is a key for advertisers who want to stretch their budgets in the most efficient way possible and maximize their returns from the exposure they got both during and after the TV campaign. SEARCH ACTIVITY INDICATES BUYING INTENT The strong relationship between searching and purchase intent also creates opportunities for CPG marketers looking to boost sales conversions. About two-thirds or more of those who search for nearly all consumer packaged goods indicated they would buy the product type somewhere – either online or offline. Tobacco products are the only strong exception, and this could be due to a combination of cyclical decline in smoking activity and regulations on the sale of tobacco products online. However, marketers will need to focus their energies on both clicks and bricks as most CPG searchers, while disposed to buying products online, are more likely to take their search results offline, where factors such as brand reputation and word of mouth are strong contributors in generating purchase intent, particularly among male CPG searchers. Approximately 5% of CPG searchers across all product categories claimed they would buy online exclusively, while for most CPG categories, one-third or more said they at least would “consider” buying online. CPG company websites appear to be bigger factors in driving offline purchase intent than other online assets such as banner advertisements and where a company appears in search engine results. Bearing in mind the “research online, buy offline” dynamic, CPG companies should take basic steps such as making coupons available on their websites and usable in brick-and-mortar stores, in order to fully exploit online-to-offline conversion opportunities. © Copyright 2006. iCrossing, Inc. | www.icrossing.com Atlanta | Chicago | Dallas | New York | San Francisco | Scottsdale | 1.866.620.3780 5
  6. 6. REPORT | December 2006HOW AMERICA SEARCHES: CONSUMER PACKAGED GOODS SEARCHING FOR CPG PRODUCTS ONLINE AND BUYING ONLINE/OFFLINE FIGURE 05 If you searched for these items online, would you buy or plan to buy them online or offline (buy/plan to buy only online, buy/plan to buy only offline, buy either online or offline, I would not buy these products at all)? Base: U.S. online adults who search for consumer packaged goods online (n=1,071) Would consider buying online Footwear 63% or apparel Food items 36% Household cleaning 33% products Personal care 38% products Beverages 27% Dietary 41% supplements Pet food 35% and supplies Cosmetics 39% Perfume 38% Tobacco 12% products Other consumer packaged goods 64% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Would buy Offline only Offline or Online Online only CONCLUSIONS Effective CPG marketing requires attention to multiple online channels. The fact that retailer and product/brand websites are of nearly equal importance to CPG searchers as search engines themselves means that CPG marketers must deploy their search and display budgets carefully. Optimizing for key product and branded terms and accompanying this effort with targeted micro-sites or full-blown Web experiences can help capture the information seekers as well as boost brand awareness around certain key attributes. One example is what Betty Crocker has done with recipe content and accompanying customer reviews on bettycrocker. com, which helps to increase site stickiness. Another is the way in which Timberland has built its Web presence around social responsibility in addition to playing on its reputation as a manufacturer of durable footwear. Given that many CPG searchers are looking for time- sensitive offers such as coupons to use in a store or sweepstakes and contests to enter, CPG marketers should use a combination of paid keywords, display advertisements and website real estate to put offers in front of interested consumers. © Copyright 2006. iCrossing, Inc. | www.icrossing.com Atlanta | Chicago | Dallas | New York | San Francisco | Scottsdale | 1.866.620.3780 6
  7. 7. REPORT | December 2006HOW AMERICA SEARCHES: CONSUMER PACKAGED GOODS ENDNOTES METHODOLOGY Harris Interactive® fielded the study from September 19-21, 2006, via its QuickQuerySM online omnibus service, among a nationwide sample of 2,345 U.S. adults (aged 18+), of which 1,071 search for consumer packaged goods online. Data were weighted to reflect the total U.S. online adult population on the basis of region, age within gender, education, household income, race/ethnicity and amount of time spent online. In theory, with a pure probability sample of 2,345, one can say with 95 percent certainty that the overall results would have a sampling error of plus or minus 3 percentage points; a pure probability sample of 1,071 would have a sampling error of +/- 4 percentage points. Sampling error for data based on sub- samples may be higher and may vary. However that does not take other sources of error into account. This online survey is not based on a probability sample and therefore no theoretical sampling error can be calculated. CONTACT For more information on this report, please contact us at howamericasearches@icrossing.com. For information regarding our market research services, please call 1.866.620.3780 or contact us at findus@icrossing.com. ABOUT ICROSSING iCrossing is a different kind of digital marketing agency committed to people’s desire to find. The company develops online campaigns, programs and experiences designed to help people find what they are searching for. Through a proven combination of talent and technology, iCrossing helps its global client base – including The Coca-Cola Company and 32 Fortune 500 companies – find solutions for complex digital marketing challenges. Founded in 1998, the company is headquartered in Scottsdale with offices in Atlanta, Chicago, Dallas, New York and San Francisco. iCrossing was named the 2005 Agency of the Year: Best Search and one of the Top 25 Interactive Agencies by OMMA: The Magazine of Online Media, Marketing & Advertising. iCrossing was also ranked no. 2 of the Top 20 search marketing agencies by Advertising Age. Find out more at www.icrossing.com. ABOUT HARRIS INTERACTIVE® Harris Interactive is the 12th largest and fastest-growing market research firm in the world. The company provides research-driven insights and strategic advice to help its clients make more confident decisions which lead to measurable and enduring improvements in performance. Harris Interactive is widely known for The Harris Poll, one of the longest running, independent opinion polls and for pioneering online market research methods. The company has built what could conceivably be the world’s largest panel of survey respondents, the Harris Poll Online. Harris Interactive serves clients worldwide through its United States, Europe and Asia offices, its wholly-owned subsidiary Novatris in France and through a global network of independent market research firms. The service bureau, HISB, provides its market research industry clients with mixed-mode data collection, panel development services as well as syndicated and tracking research consultation. More information about Harris Interactive may be obtained at www.harrisinteractive.com. To become a member of the Harris Poll Online and be invited to participate in online surveys, register at http://go.hpolsurveys.com/PR. © Copyright 2006. iCrossing, Inc. | www.icrossing.com Atlanta | Chicago | Dallas | New York | San Francisco | Scottsdale | 1.866.620.3780 7

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