(In June I will be going to Rome for the P&G Global Alumni Reunion. My parent company, WPP, will be preparing a small magazine for the event, and I was asked to write an article around sustainability. I have to turn it in next week and figured that I would share it here both for your enjoyment and feedback. Please let me know what you think in the comments below.)
In September 2008, Advertising Age challenged the practitioners of green marketing by raising the possibility that support for sustainability would decrease with the imploding global economy. A study by Duke University showed that CMOs ranked marketing that is “beneficial for society” as the last of five priorities over the next year. Meanwhile, in boardrooms and multiagency brand summits around the world, “value” has risen to the top of marketers’ concerns. While most think this is a clear shift from one priority to another, I believe both goals are achievable by shifting to a model of meaningful marketing that adds values to consumers’ brand decisions.
With the meltdown in the global economy, many marketers have given themselves a refresher crash course in the Marketing 101 definition of the “Value Equation”: (Product Benefits + Brand Equity) / Price. This formula naturally leads many brands to refocus their advertising efforts on long-ignored product benefits. Product demos and narrow superiority claims are back in vogue. Results in many cases are mixed.
I believe this textbook formula is due for a new edition—in the form of an addition to the numerator that recognizes the benefit that marketing itself can bring to the value equation. Let’s admit it: Historically, marketing has been dominated by unwanted, interruptive ad messages that hope to gain consumer attention for a few seconds. But with 3,000 ad exposures per day and technology such as DVRs and iPods that have little use for our messages, we are now forced to earn consumers’ attention by adding value through the marketing itself. We call this “Marketing with Meaning”—and examples include the Nike+ system that helps runners track their workouts, Samsung’s laptop-recharging stations in airports, and mobile cold and flu alerts from Vicks. These brands are putting marketing into the value equation:
Six months after Advertising Age raised the question, new studies show that consumers’ interest in buying green has not withered with the economy. A study of CPG/FMCG categories by IRI and TNS found that buying habits have continued a five-year shift toward sustainable spending, and that 30% of U.S. consumers feel it is important to purchase eco-friendly products. Overall, sustainability is still valued by a broad and growing share of the market.
Brands that are making the most gains through the economic crisis have closely tied sustainability between the product and marketing. The SunChips snack brand, for example, delivered on its brand promise to “grow the best snacks on earth” by moving to a completely solar-powered manufacturing plant; and it recently announced that it would release the first compostable bag by Earth Day 2010. Sales in 2008 were up 18%. Clorox worked with the Sierra Club to earn an endorsement of its new Green Works line of cleaners, and quickly rose to 42% share of this growing category.
Promotional efforts can also have a big impact when they allow the consumer to change behavior with help from the brand itself. For example, my team at Bridge Worldwide developed a program for the Kroger grocery chain in the U.S. that allows shoppers to go online and design their own reusable grocery bag. For each bag designed, Kroger offers a free disposable bag. This small step taps consumers’ creativity, encourages them to share, and saves the equivalent of more than 12 million plastic bags each day. The program is driving traffic to stores and increasing registrations to its loyalty-card program.
At the end of the day, the overarching story that encompasses both value communication and sustainability marketing is that consumers demand more than ever before from the brands that they choose to buy. For too long we have failed to turn our marketing itself into part of the value equation that consumers consider. We need to make marketing itself more sustainable. As Jim Stengel said recently, “If the money we spent on marketing can be spent in a way that brings joy, help, and service to people… the industry will be far better off.”