How the 2007 financial crash changed marketing forever

The last decade has been tough for FMCG marketers, as I wrote in a recent Campaign column. The financial crisis of 2007 proved to be a catalyst that accelerated several forces  already disrupting the traditional FMCG growth model: the rise of the discounters and subsequent discounting by mainstream retailers that hit marketing budgets hard and risked devaluing brands.

So, what have been some of my key learnings from my last 10 years experience in senior marketing roles at PepsiCo/Premier Foods/Unilever and more recently at the brandgym?

1. The Premier years: refresh what made you famous

Almost exactly 10 years ago I decided to leave Pepsico and join the upstart of the UK food and drink sector, Premier Foods, for a marketing director role. Working on the turnaround of the Hovis brand showed me the importance of remembering and refreshing what made you famous, even when there is extreme financial pressure.

Premier was struggling under a pile of debt used to make acquisitions, with a Sunday Times article asking, “Is Premier Foods Toast?” On Hovis the brand had cut costs to protect profit, leading to a decline in quality. This in turn hit sales, which meant more cost cutting and on it went.

We worked to re-connect with and refresh what made the brand famous, based on the idea ‘As good as its always been’. We upgraded the product and packaging with the rallying call. We also revamped an ionic advertising campaign with the “Go on Lad” TV commercial. As we blogged on here, this campaign built on memory structure from the original ad which aired 20 years before.

The Hovis re-launch gave me an early indication of the power of the right ‘content’, at a time when YouTube was two years old, and Facebook was yet to be properly launched! Valuable PR worth an estimated £2 million came from tapping into popular culture and baking into the campaign what today is called ‘buzz’: i. The advert was 122 seconds long, one second for each year of Hovis’s history; ii. One of the UK’s most watched TV shows, Coronation Street, cut two seconds from its programme to accommodate the advert; iii. Journalists and employees were used as extras in the film

The results were positive, with £50m of incremental sales driven by increased penetration.

With the continued pressure of discounters and demands for financial returns, are you remembering and refreshing what made you famous. Or have you lost touch with your brand roots and focused too much on cost cutting and tactical marketing?

2. The Unilever years: learning from ‘brand insurgents’

From Premier Foods I moved to Unilever, where I ran the UK food and refreshment business. Life didn’t become any easier! Unilever was feeling the consequences of the financial crisis just as hard as anyone.

And we were losing share to small start-up companies like Pukka tea and Method Home. I took several important learnings from these ‘insurgent brands’:

  • They were nimble and fast moving, partly thanks to using third party manufacturers
  • They were stepping into more premium price points vacated by ‘legacy’ brands
  • They had highly distinctive positionings and mixes, which appealed to big retail customers looking to  to differentiate themselves from the discounters Aldi and Lidl
  • They were making smart use of digital media channels.
Unilever responded innovatively and bravely. On existing brands major programmes were implemented around digital transformation, purpose-driven brands, partnerships with tech start-ups and zero based budgeting. Driving physical availability in emerging markets has also helped drive growth.

Unilever has also made a series of small brand acquisitions. As the start-ups have started to scale, Unilever has bought some of the most promising: Dollar Shave Club in personal care; Grom and Talenti in ice cream; T2, and Pukka in tea. These acquisitions have introduced a new set of capabilities, particularly marketers who are true digital natives and understand intuitively how FMCG brands can embrace data, search and social media to drive sales.

What can you learn from insurgent start-up brands in your market? How can you apply these insights to your existing business? And are there opportunities to buy brands early in their growth cycle and then scale them? Imagine if Blockbuster had taken the chance to buy Netflix early in its history, rather than turning it down!

3. The brandgym years: rebooting branding

This brings me on to the last 12 months, operating across a broad range of clients and sectors as a brandgym partner. Increasingly I’m working with online businesses who are ‘rebooting’ branding.

On the one hand, they are using the same approach I did on Hovis, harnessing the broad reach of TV as an effective medium to build their brands for the long term.

On the other hand, they are masters at supporting this salience-driving activity with a smart blend of SEO and SEM and field activity that brings their brands to life in their customers’ real lives.

They are incredibly comfortable with data; the divide between marketing, sales, finance and IT is almost invisible. They know how every penny of investment works and continuously refresh their plans to optimise their return on investment. But they also appreciate the value of qualitative research to get rich insight into their customers.

This is harder for FMCG brands to understand the path to purchase than it is for an online brand. However, FMCG companies can learn from these highly successful online businesses and become way more obsessive about what drives sales. I had the good fortune of hearing Harriet Green speak at a recent Marketing Society event. Harriet is the former chief executive of Thomas Cook and now runs the Watson AI programme at IBM. Two of the many fascinating things that she shared stuck with me; the importance of every person in a business to drive cash and the fact that 80% of the world’s data is not publicly available and sits, often unused, within large organisations.

How can you blend the best of conventional marketing and new media channels to reboot your branding approach? And how can you combine data analytics with the rich insight from real-life immersion?

In conclusion, I feel excited about the current era and the huge opportunity that FMCG marketers have to embrace this powerful data and convert it into progressive brand-building strategies and plans which will ultimately sell more stuff.

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