A Voce Nation Feature Interview with Marketing Powerhouse Procter & Gamble (Part 1)
What do 600,000 moms and 200,000 teenagers have in common? They’re all card-carrying members of the Procter & Gamble word of mouth army. In this two-part series, Voce Nation chats it up with P&G big wig Jeff Weedman and his associate Jack Dierkes about how the $70 billion consumer giant has embraced influencer marketing.
P&G Snapshot:
Year Founded: 1837
Annual Revenue: Roughly $70 Billion
Market Cap: $191.13 Billion
Market Segments and Customers: The company operates in five segments: P&G Beauty, Health Care, Baby Care and Family Care, Fabric Care and Home Care, and Snacks and Coffee. Its customers include merchandisers, grocery stores, membership club stores, and drug stores. It markets approximately 300 branded products in approximately 160 countries.
Interesting Tidbit: Jeff Weedman’s office neighbor in the early days of P&G was Steve Ballmer. At the time, Ballmer was in the oil business (Crisco and Puritan oil for P&G, that is).
Voce Nation: Jeff, can you tell our readers who you are and what you do for Procter & Gamble?
Jeff: I am the Vice President for external business development, which at P & G means I’m responsible for a wide variety of activities. Most importantly, I’m in charge of helping to accelerate our innovation by accepting capabilities, technologies, and products from external companies.
Voce Nation: What do you mean by “external companies?”
Jeff: Anything from small entrepreneurs who have new products to large technology companies that can help us run our business smarter, faster, more efficiently. Our CEO believes that innovation is not just in product or technology — although those are very powerful engines that have driven much of Procter’s success. He believes that innovation is something that needs to drive everything in our business model; how we go to market, how we interface with consumer, how we talk to our customers, how we ship our products. He is looking for external solutions across the total business model.
Voce Nation: I don’t think a lot of people think of “innovation” when they think of Procter & Gamble.
Jeff: Well, Businessweek recently named us one of the top 10 of most innovative companies.
Voce Nation: Perhaps we here in Silicon Valley are a bit skewed when it comes to the word “innovation.” It’s thrown around here quite a bit - in just about every press release. We’re talking about a different definition of “Innovation” here I assume?
Jeff: I think that is a fair point. I take a look at that and say P&G embraced the move from radio to television, and we are major players in terms of the Internet. The reason I am glad that Jack Dierkes (Associate Director, External Business Development, P&G) is here is because of the work we are doing in word-of-mouth is - it’s pretty cutting edge. The amount of time we spend in understanding consumers and what their needs are is immense. If we spun out all of our market knowledge people, consumer and market knowledge (which encompasses market research and things like that) and created an independent company, it would be one the largest companies in the world. Those are the kinds of investments we make to be innovative. But I accept your point that a lot of people don’t think about it the same way as Silicon Valley innovation, but perhaps that’s shortsightedness.
Voce Nation: You mentioned word of mouth — customers being influenced by other customers. What kind of delivery mechanisms do you use to increase word of mouth and build brand equity?
Jack: Well, for the last five to six years, we have been getting into the world of word of mouth marketing in a very big way. In the late 90’s, we launched something called ‘Tremor.’ Tremor is a panel of about 200,000 teenagers through which we run word-of-mouth marketing programs. Just in the last year we have expanded that concept to something we call ‘Vocal Point.’ Vocal Point is a panel of 600,000 moms that we run word-of-mouth marketing through. We are finding that as advertising has become more difficult — more fragmented — that word of mouth is becoming even more and more important, and is rapidly becoming the most effective way to reach consumers. With ‘Tremor’ and ‘Vocal Point’, we have some really good innovation here, we’ve got some intellectual property that we think is a great way to identify people to talk to and how to deliver messages to them such that marketing can be effective.
Jeff: Dave, let me play a game with you for a second. If you have to go out and buy a new car, are there people that you might go chat with that you think will be more knowledgeable about cars than others?
Voce Nation: Yes, definitely. I have to admit, I still go to my father. He’s from the older generation and built his own car when he was fifteen. That just doesn’t happen anymore, not since the 40s and 50s, maybe early 60’s.
Jeff: I understand what you mean. Also think back to when you were in high school, didn’t they seem to be some kid that seemed to be in ‘the know’ than others?
Voce Nation: Yes.
Jeff: And even today, take this hot new trendy restaurant, aren’t they people you interface with that always seem to be in ‘the know’?
Voce Nation: Of course.
Jeff: Part of making word-of-mouth advertising effective is to understand that some teens/some moms are more connected and more knowledgeable than others. But then how do you identify them? What are the characteristics of the “more-connected” people? Let’s assume you identify them, guess what? How you talk to them is different than how you talk to other less “well connected” people. What you say to them, how you provide data to them can very much effect how they pass on that data. Why? Because they can choose to pass it on in a very positive or negative way. Understanding what motivates them, how they are willing to accept that data, and what they do with that data, takes a huge amount of understanding and capability. And being able to build a business model around that, I would offer, is pretty cutting edge.
P & G has a belief: we never tell people what to say about our products or our business. We provide the data and they can say anything they want. It is kind of like your blogging experience. If I were to say “Hey Dave you gotta say this in your blog,” you’d probably say “Jeff that’s not really your call.” So understanding that, figuring out how to codify, how often to talk to people, whether they are willing to listen to you, is very important. The old days it was easy, as Jack says, when there were three TV networks and you could get 80% of the population. But here is what the truth is now: when I asked you where you get your car information, you said your dad. I suspect this depresses the auto companies. They are spending hundreds of millions of dollars in advertising, and you still talk to dad.
Voce Nation: Interesting. It sounds like a very simple concept, but it’s surprising how few companies truly understand it. We tend to run into a fair number of non-believers - intelligent marketing folks that obsess solely about getting into The Wall Street Journal or USA Today. Those outlets are obviously important, but what we see now is there is a great deal of influence in smaller, connected groups of people talking regularly to one another.
Jeff: Absolutely. In fact, our company is probably the largest advertiser in the world, and I run the organization that is very focused on attracting things that will accelerate our innovation, products and capabilities. Considering all this, do you know what my marketing budget is? Zero. Jeff (P&G PR) is my entire marketing staff because he is in external relations. It is about finding the right audience to talk to that will generate the additional follow-on questions.
Perfect example. I met you through the Churchill Club and am now doing this blog post. And maybe six months from now, when it is a historical thing, someone may read it and call me and say “I saw the blog entry, and so I google’d you and you gave a talk about something in 2001, would you be interested in…?”
In fact, at P&G we have a saying, “serendipity happens routinely.”
Technorati Tags: Innovation, Marketing, Media, P&G, Silicon Valley