To Increase Digital Spending or Not?
At a time when companies are looking to decrease their digital marketing spend (looking at you P&G), L’Oréal has taken the exact opposite approach. The cosmetics business said it has benefited from higher digital ad spending over the last four years despite growing concerns from its peers that their own investments aren’t working. During the past five years, digital’s share of its media budget more than doubled, to 30 percent in 2016 from 13 percent in 2013. On the other hand, P&G has still been seeing growth (P&G still delivered over 2% organic sales growth on 2% volume growth, suggesting that what was cut “was largely ineffective”.) Even though they have cut between $100m and $140m from its digital ad budget last quarter because of brand safety concerns and “ineffective” ads. In a statement, P&G said the move was temporary as the brand looked to ensure its ads were not being placed in digital forums that did not meet its standards and specifications. Hey don’t stop what is working for your business
Heineken is also following the digital route- in efforts to boost brand awareness. While digital channels are valued for their ability to highly target audiences and personalize messages, Heineken is instead viewing them as a mass medium it can leverage to reach large numbers of people across broad demographics in a manner similar to how brands have traditionally used linear TV advertising.
These developments all reinforce that marketers are still not entirely sure how best to handle digital, or where it delivers the most value. While TV may be a more assured bet for broad audience targeting, ratings are down overall amid a trend toward cord cutting, while ad rates are still pricey. Given that friction, brands like Heineken might value digital channels as a replacement for TV when it comes to brand awareness and large-scale messaging campaigns.
Nordstorms- Mixing Physical and Digital
Many retail business are currently thinking about how they can compete with Amazon- Nordstorms is taking a reasonable approach by capitalizing on something Amazon does not have… Physical stores. The retailer is investing in new ways to bridge its physical and digital businesses. As shopping continues to shift away from brick-and-mortar stores to e-commerce, Nordstrom is investing in technology to connect its physical stores to digital. So far this has been success for Nordstorms, who met second-quarter earnings.
“America Runs on Dunkin.’” (Not Donuts)
Do you know anyone that says Dunkin Donuts as opposed to just Dunkin? In attempt to rebrand, Donuts will be dropped from the storefront name. Considering they sell much more than doughnuts, it’s a smart move. By rebranding and dropping "donuts" from its name, this would enable the chain to better position itself as a coffee option as it competes against Starbucks. The change would be fairly subtle, and a statement from the company reported by CBS pointed out it has been using just Dunkin' in its advertising for more than the last 10 years. A final decision about the potential rebranding would happen late next year when the chain begins redesigning its stores.