Google CPG blog - News and Notes from Google"s CPG Vertical

Got Buzz?

Wednesday, July 25, 2007

Many marketers are looking for alternatives to traditional marketing to create buzz around their brands. We're not suggesting that CPG brands totally eliminate traditional marketing; using word-of-mouth tactics alongside more traditional methods has always been important for brands. The difference is technology and a willingness to test new campaign types, be they blogs, viral campaigns, or other methods that drive awareness.

According to a recent article in Online Spin, A.C. Nielsen evaluated nearly 80 new CPG products across several subcategories that were launched in the U.S. in 2005 and 2006. Here are highlights:

  • Advertising is best predictor of buzz: After analyzing blog buzz volume, ad spending, purchase intentions and actual product sales, researchers found that the best predictor of buzz for a newly launched CPG is a large advertising budget.
  • Greater media spend equals greater buzz: On average, the top 10% of products with the most buzz spent nearly $20 million on paid media for the launch. In contrast, the companies that generated the next 40% of blog buzz spent an average of $15 million; the companies that generated the bottom 50% spent an average of only $5 million.
  • A few products dominate CPG buzz: Not all CPG subcategories and products generated buzz at the same level. In fact, 10% of brands accounted for 85% of total CPG buzz in the study. Over-the-counter (OTC) drug brands have higher buzz, partly driven by consumers' higher level of involvement with them. Edgy brands were also among the top 10% of products with the most buzz.
  • Buzz precedes sales peaks: Buzz tends to occur very early in relation to a new product launch, with peaks in buzz preceding peaks in sales two-thirds of the time in the launches studied.
  • Buzz enhances sales forecasting accuracy: For the select products that generate substantial buzz, this study provided the first-ever evidence that buzz volume can positively influence sales. In a regression-based sales forecasting experiment, incorporating actual buzz levels resulted in a meaningful accuracy improvement to forecasting models, by as much as 20%.
  • Brand uniqueness prompts buzz: Beyond media spend and distribution, category familiarity (as indicated by higher purchase frequency) and product distinctiveness show value when attempting to anticipate or predict buzz.
These findings show that an increase in online spending can result in generating more buzz - and who doesn't want that? With the growing popularity of blogs and gadgets (aka widgets) to strike a winning balance of traditional marketing and word-of-mouth, the opportunities to achieve the ultimate buzz are endless and attainable.