Aligning the Organization for Shopper Marketing

Are shopper marketers being home grown, transferring in from customer teams, or just rotating through from sales and brand? Which way should shopper marketing teams be oriented: customers or brands? And at the end of the day, who really holds the budgetary authority?The answers to these and other staff alignment questions were pursued by A.T. Kearney executives in the "2011 Shopper Marketing Organization" survey. It was conducted in the late spring over a list of marketing executives, director-level and up, created by the Path to Purchase Institute. A total of 26 executives were interviewed.The survey was designed by Gil Krakowsky, principal at A.T. Kearney, with the assistance of panelists who took part in a related symposium at the 2011 Shopper Marketing Summit:April Carlisle, leader, shopper marketing COE, Procter & Gamble North America;Rob Colarossi, vice president, category leadership, Hostess Brands;Karen Stermitz, shopper marketing manager, Hewlett-Packard;Mike McMahon, formerly senior vice president of integrated customer marketing for ConAgra Foods, and now executive vice president-shopper solutions, Alcone Marketing Group; andGeoff Jackson, formerly director, integrated shopper marketing, Campbell Soup Co., and now president, sales and marketing, BoxTop Media LLC."The companies with more mature shopper marketing organizations [defined as older than three years] are more open to giving their sales and brand executives the option of doing a rotation through shopper marketing," says Gil Krakowsky, principal at A.T. Kearney. "I wouldn't say it's become mandatory yet, but it's strongly recommended. "At P&G, for example, it is very difficult to become a brand director unless you've done a rotation through shopper or customer marketing. It gives brand managers a view of how things really work at retail. Companies that don't rotate tend to have problems with brand managers who grow up in an ivory tower.""The biggest constraint to creating cross-brand or cross-category campaigns is whether the shopper marketing organization controls its own funding," says Krakowsky. "If they're forced to beg the individual brands for funding each time, it's nearly impossible to create shopper solutions that they can take with confidence to a retailer as a multi-month, multi-category campaign. We think that a 'tax' on brands – where the shopper marketing organization controls its own funding – is the best approach.""The issue here is whether shopper marketing organizations can build campaigns that reach across the entire corporate portfolio, either across brands within a category or preferably across categories," says Krakowsky. "Because ultimately, we're talking about creating solutions, and solutions are most effective for a manufacturer when they leverage the entire corporate portfolio."“Most shopper marketing organizations grew organically out of customer marketing,” says Krakowsky. “And that made sense: You’d learn about a need from a retailer through the customer teams, so it grew up in sales and was customer focused. “Today, you must create an organizational structure that facilitates some form of coordination between what’s happening with the brand and what’s happening at the customer. As the chart suggests, we’re now seeing this evolution to dual brand/customer-facing teams in some of the bigger, more mature organizations.”"Typically at a CPG manufacturer, the individual brands get together with their agency partners and internal centers of excellence to define a brand strategy for the year," says Krakowsky. "But even though shopper marketing is increasingly mainstream, this chart suggests that most shopper marketing organizations are still struggling to get a seat at that table. Two-thirds of companies 'never,' 'infrequently' or only 'sometimes' involve their shopper marketing executives in these discussions. "The next big evolution in shopper marketing will be a focus on the overall path to purchase – the broader context of 'plan, shop, buy, experience' and the various ways organizations can engage with consumers and shoppers. The companies that already involve their shopper marketing organizations with brand planning tend to be the best-in-class manufacturers."In some organizations, the terms "campaign," "program" and "platform" have very distinct and precise meanings; in others, they're used interchangeably. For purposes of this chart only, the word "campaign" was used throughout as an all-encompassing term to help highlight which party – the retailer or the brand marketer – originates most shopper marketing efforts."While short-term, one-off promotions still dominate, the best organizations are moving toward strategic, multi-execution programs and platforms," says Krakowsky. "Ideally, you look for a solution that focuses on the particular need states of a retail chain's shoppers and create a platform that can be used for many executions."Why is 'long-term' three months? A while back, a manufacturer that we consider best-in-class insisted that in order to involve their shopper marketing resources, a campaign must last a minimum of 90 days. They said, 'Shopper marketing must drive improvement in both the retailer's and the manufacturer's brand equity.' Any effort that ran for less than 90 days could not accomplish that, 'so you should deal with our promotion guys.' That created a useful precedent, I think, for the industry.""The fact that search and in-store digital ranked lower on this list is not surprising since we consider those to be 'next wave' technologies," says Krakowsky. "And there's no doubt that manufacturers are struggling to figure out what to do with their apps, the vast majority of which are rarely used. Retailers are far more advanced in this area, and we think that manufacturers are going to have to learn how to play within the confines of retailers' apps."The most surprising result in this chart was the high ranking for 'social media' such as Facebook and micro-sites. A.T. Kearney just released a study on the Facebook marketing behavior of Interbrand's 'Top 50 Global Brands.' We found that most are not very savvy at using their social media to drive engagement and house discussions with their loyal consumers. They are, however, fairly effective at using Facebook for basic things like distributing deals, and I think that's what you see reflected here.""The best shopper marketing organizations use an 'integrated communication process' where a brand manager gets all agencies – media, creative, PR, shopper, digital – together to co-create an integrated communications plan," says Krakowsky. "But too many manufacturers still see their shopper marketing agencies as tactical order takers. As a result, they fail to get the shopper side of the path-to-purchase represented when creating a brand's communications strategy."You need to treat your shopper marketing agency as a true strategic partner by giving them a seat at the table with the other major agencies of record.""The last ANA [Association of National Advertisers] ad agency compensation survey showed that 46% of agencies are compensated by major advertisers using a form of performance incentives," says Krakowsky. "For shopper marketing, it's 35%. But there's a big problem here. Just because it says 'performance incentive' doesn't mean that the incentive is particularly well designed or that the performance is actually evaluated through a well-structured management process of quarterly or bi-annual feedback.

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