P&G, Gatorade lead digital charge

27 July 2011

NEW YORK: Procter & Gamble, Barnes & Noble and Gatorade are among the advertisers showing how to "win in the digital economy", research by the Boston Consulting Group has argued.

In a new study, the company stated that platforms like Facebook and Twitter mean information spreads globally in an instant, while over 1bn people have already used the web on a mobile phone.

Online retailers in the US also now sell more electronic than paper books, and grocery chain Tesco even enabled South Korean shoppers to order goods by taking photos of items featured in ads at subway stations using their smartphones.

Dominic Field, a partner at BCG, said: "Technologies and devices such as cloud computing, social networking, smartphones, and RFID and bar-code readers are creating an information 'arms race.'"

More specifically, he suggested customers are increasingly "empowered and influential", able to air their views on products and services, participate in co-creation and easily disseminate word of mouth.

All of these shifts offer brand owners greater access to real-time insights and a range of new ways to engage their target audience.

"The key is to cut through the hype. Many companies make the mistake of blindly jumping on the latest hot trend instead of creating a true digital strategy," Field said.

BCG's analysis outlined a variety of tactics firms might employ to avoid this trap, firstly in recognising a joined-up approach is required across all areas from sales and marketing to R&D.

Senior executives need to drive this process, and the study highlighted the case of Procter & Gamble as an example of where such a policy is being pursued.

Bob McDonald, P&G's chief executive, said earlier this year that digital technology would play a "critically important" role in its future.

"We're doing a lot more in digitising our business from end-to-end, from molecule creation to running our plants off of the point-of-sale data of our retailers," he argued.

Indeed, BCG warned many operators must rethink their entire business model, as shown by book store chain Barnes & Noble, which currently holds 22% of the US e-reader market and takes 27% of e-book sales thanks to the Nook.

This week, Barnes & Noble announced that people can now subscribe to 175 digital newspapers and magazines via its free app for Apple devices.

"Customers tell us they appreciate the flexibility of reading their favorite digital newspapers, magazines, books, kids' books and more from Barnes & Noble on their iPhone, iPad and iPod Touch devices," Jamie Iannone, president of digital Products, Barnes & Noble, said.

In terms of monitoring and measurement, BCG cited Gatorade as a leading example, as PepsiCo's sports drink has set up a dedicated Mission Control constantly tracking social media buzz.

"The best consumer research is the social network," said Massimo d'Amore, CEO, PepsiCo Beverages Americas.

BCG's other recommendations included taking an overarching perspective to formulating change but "starting small" when implementing plans, alongside adopting a long-term view about how the climate could develop going forward.

IBM received its first patent almost exactly 100 years ago, and has collected 150,000 worldwide since then, but in the process has adapted from making hardware to providing cutting edge software and business services.

"Inventions and innovation have been a centerpiece of IBM's long-term business strategy and have enabled the company to evolve and lead for a century, despite dramatic changes in the IT industry," said Christopher Andrews, IBM's communications manager.

Data sourced from Boston Consulting Group, Seeking Alpha, Yorktown Patch, AdAge; additional content by Warc staff