Mondelez’s growth analytics manager, Matt Stockbridge, is tired of being pitched by digital advertising companies that don’t understand the FMCG giant’s challenges.
Campaign 12th October 2016
Speaking at IAB Engage 2016, Stockbridge mocked the language of digital companies that cold-call him. Mondelez is open to pitches from digital advertising companies, he said, but they need to be aware of the company’s challenges.
Here he outlines four key challenges prospective digital partners need to be aware of.
Innovation in FMCG is tough
“We get accused of not moving fast enough,” says Stockbridge. “But all I have known about this business is constantly changing and evolving.”He pointed to the failed takeover of Hershey as an example. “It’s not happened, it may happen in future – it’s constantly changing,” he said.
Mondelez also has less leeway than other categories, he added. Stockbridge pointed out that a car manufacturer that spends $1m advertising a $25,000 car only needs to sell a few vehicles to see a strong ROI. “It’s more difficult for us – we have a massive range of brands,” he said, adding that Mondelez targeted “incremental growth”.
He said it is rare for an FMCG brand to continue growing past its first year. He pointed to Belvita, the breakfast biscuits that rival standard cereal. “It’s targeting breakfast on-the-go, where there are lots of established brands,” he said. Belvita has continued to grow beyond its first year, he said before quipping, “Anyone from Kellogg’s here?”. Another example of innovative marketing is Mondelez’s Creme Egg Cafe, launched in January. Tickets sold out fast, despite continued press criticism over the changing taste of Cadbury’s chocolate since its acquisition by Mondelez.
Despite the coverage of Oreo’s outdoor eclipse campaign, such stunts don’t yield much in terms of immediate sales, Stockbridge said. “It’s all very well talking about instant returns, 100 clicks and this that and the other,” he said. “For what we’re trying to make, the products are not particularly expensive, so we have to drive a lot of sales. “A lot of advertising spend in 24 hours probably isn’t going to provide a big return. That doesn’t mean we don’t do it, it’s about finding balance.” He added that Mondelez is “absolutely” investing in digital, pointing to the company’s partnerships with Facebook, Google and Twitter.
Supermarkets are squeezed
Mondelez’s margins are constantly squeezed by the fact its items are often sold discounted. Stockbridge illustrated his point by showing a pile of Oreo packets discounted and stacked next to a full-priced pile of Quavers. “It’s how to understand the balance of consumers, what’s happening at the discounters, and how that effects price, value and the decisions customers make in-store,” he said. The confectioner also has to consider where growth is coming from in groceries – Aldi and Lidl – without contributing to the issues of its biggest customer, Tesco’s.
How people buy snacks hasn’t changed
Despite the growth of online shopping and increasingly “frictionless”, on-demand options such as the Amazon Dash button, ecommerce is difficult for a firm like Mondelez.
“We want to sell our stuff online if we can find a profitable way of doing it [but] the traditional way people buy snacks hasn’t changed,” Stockbridge said, adding that ecommerce was “difficult” for retailers to do well. Nonetheless, he hinted there could be a Cadbury’s Dash button in the works.