How is the social media wave affecting the CPG industry? In some general ways the application

of this work is not very different from how other businesses are using it. What is unique in CPG,

however, is the overall effect social media is having in liberating consumer-driven businesses

that are now breaking free of inscribed restrictions accepted for decades. While the mass-media

of television, radio and print had a substantial hand in creating the great brands and houses we

know so well, they failed -- by no inherent fault of their own -- to nurture a deeper, more

satisfying and, ultimately, sustainable relationship with the consumer.

As a result, manufacturers became increasingly dependent on retailers, who have always been

able to create a face-to-face dialogue with their customers. In the age of the Internet, social

networking and social media now offer a range of channels for direct one-to-one, one-to-few and

one-to-many, end-user interactions. This is hugely empowering for manufacturers as it will

dramatically alter the landscape for how our industry conceives, designs, makes, markets and

distributes today's brands and tomorrow's new products.

What This Means for CPG

We are at the virtual beginning of a revolution now transforming how we communicate with -

and learn from- consumers, with implications across the entire value chain.

For example, with private labels thriving and great brands coming under assault through

commoditization, both driving down margins and weakening brand essence, manufacturers are

searching for ways to differentiate their products. Insights gleaned from social media can help in

understanding and interpreting critical perceptions about your products as well as competitors,

making possible the creation of truly unique messages with improved consumer appeal.

Social media can also offer niche market opportunities with the "long tail" of the consumer

demand curve much easier to assess and target. Manufacturers can now obtain rich downstream

data directly, without having to exclusively rely on retailers or third-party data providers for this

crucial information.

With consumers joining distinct communities it is also easier -- and more effective -- to reach

them through their chosen networks versus mass media where they were previously targeted as

individuals or within households. These cohorts, with their shared passions, are what make social

media such a powerful tool for niche marketing and for the marketers who want to address their

particular needs and need states.

For promotion and advertising managers, the potential for social media's influence in directing

shoppers to their brands at a particular moment has never been higher since targeting can take

place in real-time. A great example of a tool that makes this possible is "foursquare" now the

latest craze in social networking. With this mobile application you can "check in" at any bar,

restaurant or retailer and instantly download an offer or information about a product or service.

You can also receive offers, targeted to your preferences, from neighboring retailers.

Thinking it Through

Before you create an online community, or even a Facebook/Twitter presence, you will first need

to consider what you actually want it to achieve. Users may visit your page initially, but holding

their interest over a period of time takes concerted and dedicated effort. If your messaging

acquires a reputation for being "hollow or shallow", it will be hard to win your audience back.

Social media is about creating a dialogue, which makes it a distinct form of communication from

mass media. If your consumers feel you're using it to disseminate static, insincere or otherwise

boring messages you will be ignored. For manufacturers accustomed to the one-way, old-age

media messaging, this idea can take some getting used to.

Like any two-way conversation, negative comments and criticisms are practically inevitable.

Some of these comments may be constructive, others may not. However, the opportunity to

engage with consumers is too valuable to let such opportunities for engagement slip away. The

key is to monitor the conversation and be prepared to adjust your tone and offers accordingly.

Several good examples of getting it right include Diet Coke and Zappos, where consumers have

created their view of the brand, taking an "ownership" stake for themselves. Likewise, Pepsi's

"Refresh" project is not at all about brand-driven content, but about the consumer who votes on

various causes that are of interest to them. And if you have a chance, visit "Pampers Village",

where parents are sharing their personal experiences in a video cast entitled "Welcome to

Parenthood" while also obtaining great advice and product offers.

To find these "passion communities" for your product, you need to go where your consumers

are. This is where you'll pick up the most valuable insights. For example, when Sea World set

out to market a new ride (Journey to Atlantis), it located and targeted existing online

communities of coaster enthusiasts, inviting some of them to try out the ride before the launch. It

also posted visuals of the ride on YouTube and Flicker, which resulted in a huge number of

downloads, i.e. interested visitors.

Locating and targeting influence communities is a much more effective way of sending out a

message than just broadcasting to a vast population who may or may not care for what you are

offering. The advantage of social media is that it extends the mutual trust existing within a

community, creating a bond with not just your product but between and among all those using it.

It might be hard to accept, but the voice of a fellow community-member is far more likely to

carry greater credibility than that of the marketer.

Ford Motor Company is leveraging this pretty effectively. When the Fiesta was to be launched in

the US, Ford ran a contest to select one-hundred people to act as social media "agents" for the

car, driving it for six months and posting their first-hand experiences.

When trying to read the consumer, the advantage of conversations over surveys lies in the fact

that the latter are usually designed to get manufacturers the information that they are looking for.

A free-flowing, online conversation, however, allows for the unexpected and can reveal

information you did not know you needed to know. The insights gained here are invariably rich,

and can be of great value.

But what if nobody is talking about your product? While this is every brand manager's worst

nightmare, it doesn't necessarily mean that there's an urgent need to jump in and start generating

'buzz'. Often, there's a lot to be learned just by listening to whatever related topics are being

talked about.

With a social media listening platform, you can obtain many valuable insights into the minds of

your target audience, well beyond what surveys or focus groups might. You can also learn how

your competitors are being judged as well as what your trading partners are doing and how they

are perceived by their customers.

As an example, there could be conversations having nothing to do with the quality of your actual

product, which nonetheless impact your sales. Starbucks received negative feedback for their

labor practices, and one of the largest CPG manufactures in the world was the target of an online

boycott campaign based on accusations of animal testing.

The point; the comments of your company's supporters and detractors can play a vital role in

shaping your brand's image, so you need to get to know what is being said and how you will

respond before momentum piles up in the wrong direction. Once you have gathered and analyzed

all the data, you will be in a much better position to decide what message is best suited to your

consumers at any given time or circumstance.

Finding Your Feet

To say to marketers that this might be a good time to look beyond marketing may sound

heretical, but in today's hyper-alert world, communicating with the consumer is not just about

influencing choice. Never before have CPG's had the opportunity to discuss so many aspects of

their products with their consumers. Now, when a new product is launched consumers can be

involved at practically every step, from product design, testing and sampling, to actually creating

content for your advertising and promotion campaigns.

Keep in mind that while social media allows you to engage your communities in a myriad ways,

it's more than simply starting a blog, an online community for your product, or just joining

conversations on existing forums.

This all takes courage, but in a digital age our industry has little choice. You either manage the

conversation through active listening and participation, or you will be managed by it as

consumers share information within their cohorts, controlling and setting the message for

themselves.

In summary, it may take some time, trial and error before you find the approach that works for

your company. But, when consumers understand that you are making a genuine effort to build a

relationship by understanding and serving them according to their needs, they are often all too

happy to meet you halfway becoming not just consumers, but advocates for your brands among

all that use them.

Mad Men, watch out!

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About the Authors

Reeta Mehrishi is TCS's Social Media Analyst . As part of her current role, she monitors the

trends in Social Media Marketing and develops strategies that can be adopted by enterprises.

Michael Forhez, who regularly writes for and speaks on subjects germane to the CPG industry,

is TCS's Director of Business Solutions for the Consumer Markets, a vertical he has served for

over twenty years. Forhez will also be speaking on this topic at the 2010 Consumer Goods

Growth & Innovation Forum, September 22 - 24, 2010 at The W Hotel | Miami, FL (South

Beach).