Nielsen shows creative thinking achieves incredible results
Innovation in the consumer packaged goods (CPG) arena is notoriously difficult. Writing in MediaPost, Karl Greenberg quotes daunting data from a recent survey by digital media firm Catalina (Launching CPG Product Harder Than Launching A Rocket).
- New CPG product failure rates ran 60% to 80%
- Just one quarter (24%) of initial triers repeated within six months
- Only 11% of initial triers were still engaged after a year
- Less than 1% of buyers accounted for 80% of the average new product volume – in fact, only one of fifty products studied boosted its core customer base above 2%.
Despite these chilling statistics, new CPG products continue to arrive as brands struggle to boost share and ROI.
Nielsen, recognizing what it describes as “sluggish sales growth across the consumer goods landscape,” has just published a remarkable demonstration of the power of creativity.
Just how creative?
Well, how about turning a market research investment of $50,000 into $13 million in incremental sales creative?
Nielsen reports this was achieved when 20 randomly selected new CPG products used evolutionary optimization to identify and refine winning concepts. Cross-functional teams brainstormed a wide range of ideas that were entered into software capable of generating millions of variations for interactive consumer testing.
It bears repeating: an innovative $50,000 research investment returned $13 million in profits. What’s more, it was achieved without – gasp! – actual advertising.
Which makes a key strategic point: creativity is about way more than great ads. It’s about great ideas. And great ideas arise anytime someone is prepared to step out of the box of conventional thinking.
Revolutionary creativity that helped shape Boomer world
August 13th marked the 104th anniversary of the birth of Mad Men giant, Bill Bernbach. Doyle, Dane and Bernbach, the agency he formed in 1949 with partners Ned Doyle and Mac Dane, produced some of the most creative advertising Madison Avenue has seen, before or since.
In ADWEEK’s 2011 tribute on the occasion of what would have been his 100th birthday (Bill Bernbach: Creative Revolutionary), Chip Bayers noted Bernbach’s work came to define the 1960s for leading edge Boomers as much as rock n’ roll did.
Mention DDB’s iconic Think Small campaign for the VW Beetle to anyone over 60 and chances are you’ll put a smile on their face.
Like Nielsen, Bernbach believed in the multiplying power of innovation; “properly practiced, creativity can make one ad do the work of ten” (HT Bayers).
Eventually, revolution became the norm and “creativity” came to mean the execution of ads themselves. It’s a narrow view that blinds many mainstream brands today – CPG included – to boosting market share.
It’s time to creatively rethink what creative thinking really means.
The 50+ space: THE dominant CPG force
In 2012 Nielsen published a definitive study of the spending power of Americans over fifty, with emphasis on the Baby Boomer generation, Boomers: Marketing’s Most Valuable Generation. It’s an innovation-fodder bonanza hiding in plain sight.
While conventional mainstream brand thinkers dismiss consumers outside the 18-49 demo, Nielsen estimated only 5% of ad dollars are directed to the 50+ space – the report shows older Americans dominating in 119 out of 123 CPG segments.
With over 12 million additional consumers arriving through 2015, we estimate Americans over 50 now buy 60% of U.S. CPGs. Oh yes, and half the new cars and two-thirds of home improvement products and … well, you get the picture.
With trillions in uncontested Boomer-Plus dollars on the table, let’s keep in mind creative solutions are not collaborative but about grabbing share from complacent competitors.
Sure, CPG category sales growth may remain sluggish, and new product introductions will remain risky, but disruptors don’t have to settle for category average results. Instead they can choose out-of-the box engagement with the the Boomer-Plus Generation™, comprised of Baby Boomers and their siblings born 1940-1945, 93 million strong and ready to rock.
Brands – all brands – should stop thinking small: innovation isn’t just about great ads.