Media bucks generate blog buzz, survey says
Retailers that separate advertising from word-of-mouth tactics, such as web blogs, do so at their sales peril, says a report from The Nielsen Co. Such strategies can be “severely misguided,” according to the study, which found that high blog interest, or buzz, around new product launches is tightly linked to paid media spending.
After analyzing blog buzz volume, ad spending, purchase intentions and actual product sales, Nielsen found the best predictor of buzz for newly launched consumer packaged goods is a large advertising budget. Nielsen is a marketing and media information company.
The study evaluated nearly 80 new consumer packaged goods, or CPG, products across several subcategories, launched in the U.S. between 2005 and 2006. The top 10% of products with the most buzz averaged spending nearly $20 million on paid media for the launch. In contrast, the companies that generated the next 40% of blog buzz spent an average of $15 million, and the companies that generated the bottom 50% spent an average of only $5 million.
“Splintering media sources along with emerging consumer-generated media are challenging one-way, mass-media advertising models,” says Robert Mooth, vice president of product development at BASES and a study author. “However, our analysis shows that traditional mass media continue to play a critical role for most CPG brands. What has changed is that online buzz and consumer expression have entered the fray, resulting in a complex yet inseparable relationship within the overall marketing mix for many types of products.”
The study, titled “The Origin & Impact of CPG New Product Buzz,” was conducted by Nielsen BuzzMetrics, which focuses on buzz analytics, and Nielsen’s BASES, a new-product forecasting and consulting company.
Not all CPG subcategories and products generated buzz at the same level. A mere 10% of brands accounted for 85% of total CPG buzz in the study. For example, over-the-counter drug brands have generated lots of comment, partly driven by consumers’ high level of involvement with them. Edgy brands were also among the top 10% of products with the most buzz.
“Most CPG products are ‘everyday’ items, lacking in distinction and therefore propensity for buzz,” says Kate Neiderhoffer, director of methodology at BuzzMetrics Inc. “However, there are some exceptions to the rule, as evidenced by brands like Red Bull, Altoids, Crystal Pepsi and Viagra. The CPG industry should challenge itself to bring more innovative products to market, cultivated with more innovative marketing. The buzz will follow.”
The study also found that buzz tends to occur soon after a new product launch, with peaks in buzz preceding peaks in sales two-thirds of the time in the launches studied. And while a formal model for predicting buzz is not yet available, some factors appear to have predictive value. Beyond media spend and distribution, category familiarity -- as indicated by higher purchase frequency -- and product distinctiveness show value when attempting to anticipate or predict buzz.
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