Live from DMA06: Kraft's Paula A. Sneed Keynote: Direct Marketing and Mass Marketing Blend Together for Success
Tuesday, 17 October 2006
Throughout Paula Sneed’s keynote address at DMA06 in San Francisco, Kraft’s executive vice president Global Marketing Resources & Initiatives exuded conviction and confidence as she explained the essential elements that have contributed to Kraft’s success.
“Why is a representative from a traditional packaged goods company standing on this stage?” Sneed asked, admitting that Kraft did not evoke the typical image of direct marketing, but rather one of mass marketing. After all, the company had built its brand using traditional mass marketing. “But,” Sneed continued, “over the past 20 years, slowly at first, and then much more boldly, we have recognized that being a mass marketing organization is not enough . . . we had to redefine what marketing was and how we did it.”
According to Sneed, five years ago, Kraft spent two-thirds of its marketing dollars on broadcast advertising. That has changed though, she explained. “Direct marketing is not an afterthought at Kraft. We are proud of the fact that we are marketing directly to consumers, and as a result we are better.”
To illustrate the profound change that has taken place in marketing, Sneed used the example of the Olympics. At the time of the 1984 Olympics in Sarjevo, there was a limited selection of advertising channels available: network TV, cable, local newspaper, national newspaper, radio, and magazines.
In contrast, by the time the 2006 Olympic games rolled around, there was a huge range of advertising choices available, including wireless mobile, Internet, DVR, podcasting, e-mail updates, broadband, portable video content, blogs, on-demand VOD, and satellite radio. “If all you used was mass marketing,” Sneed pointed out, “you would miss two-thirds of the opportunity.”
Daring to Take Risks
Kraft, said Sneed, has always been willing to take risks and try new things. She pointed out that the company was the first to use photography in their print ads, and one of the first to advertise on television. With the onset of cable, Kraft was one of the first to advertise. That same daring later led them to use Internet marketing when it was still an emerging medium. “People thought we were crazy to use those forms of advertising when we did,” she told DMA06 delegates.
More recently, in an unusual move for packaged goods company, Kraft began publishing a custom magazine aimed at helping people with their common needs around food and food preparation. The company began by delivering the magazines for free, and in less than five years, their efforts have expanded and even moved internationally. But, said Sneed, “it’s not just about circulation, it’s about business results.”
Understanding the Consumer
Again and again, Sneed stressed the vital importance of delivering the right content, at the right place, and at the right time. By using a wider variety of channels, Sneed said that Kraft has been able to develop a more intimate understanding of who customers are – by listening to them and interacting with them. “The more customers are multichanneled,” she said, “their value to us increases geometrically.”
Summing up the lessons Kraft has learned, Sneed said, “We will only succeed if we have intimate insights about consumers that inform the way we do business. Demographics and psychology are not enough. We have to understand the why’s and the how-comes.” Gaining this kind of insight, Sneed said, requires a combination of both traditional marketing and direct marketing techniques. “We used to use just mass marketing tools. Now we use both mass tools and direct marketing tools to get these insights.”
Direct Marketing Challenges
Sneed described three major challenges to all direct marketers.
First she said, “Be willing to fail.” Sneed encouraged marketers to be patient and not to lose heart when trailblazing with methods that may be ahead of their time.
Second, “Spend money to uncover insights.” Spending more money upfront is bound to save tactical testing downstream, Sneed explained. She encouraged marketers to invest more resources into discovering consumers’ underlying motivations.
Lastly, Sneed advised, “Keep pushing the boundaries. Do not settle for what’s always worked before.”
Sneed concluded her DMA06 keynote presentation by reiterating that the line between mass-marketing and direct marketing is no longer just blurry or thin, but has actually disappeared. All marketers today, she explained, must be direct marketers if they are going to be successful.
“You can touch lives. That is personal, powerful, and that is the promise of direct marketing.”