As with most FMCG advertisers, snacks company Mondelez International – home to billion-dollar brands such as Cadbury Dairy Milk chocolate, Oreo biscuits, Stride gum and Tang powdered drinks – still spends most of its media budget on TV.
The Mondelez executive running global media and consumer engagement however, Bonin Bough, had little experience of marketing via traditional channels before taking up his current role just over two years ago, previously managing social and digital worldwide for food and drinks major PepsiCo.
In fact, up to that point, Bough had only ever worked in digital roles since graduating from college back in 1999.
It was an unconventional move, driven by a desire to bring in a fresh perspective, Bough says. “Before I was hired, my boss said: ‘We believe that all media is digital. We want a digital guy to help chart the future of media’,” he recalls.
The sentiment typifies Mondelez, a relatively young company spun out of Kraft Foods in late 2012 that is directly exposed to worldwide shifts in consumer connectivity and buying power.
Unlike its former parent, which now focuses on the grocery business with a heavy emphasis on North America, Mondelez is geared towards fast-changing growth markets, which represent around 40% of company revenues.
At the same time, the rise of the mobile phone as the primary screen for communications and digital consumption across much of the world is especially pertinent for the snacks category, where purchases are often triggered by impulses close to the point of sale.
It’s Bough’s job, and main challenge, to steer Mondelez’s marketing through this transition, encouraging marketers to try out new approaches internally while kickstarting innovation programs in markets where mobile is making a big impact on people and businesses.
That, Bough concedes, is just about everywhere. The rapid pace of economic, social and technological change in Asia however – where many of the world’s mobile devices are being made – merit close attention.
“Even the smartphone market is being transformed from a price standpoint, data plan standpoint, capability standpoint,” Bough says, brandishing his own phone in a café in Shanghai.
“This is a purchasing device. When I can see you buying something with this device, and I can target that data, that’s really exciting. Things are going to happen a lot faster here.”
Budget Goals Set The Pace
Mobile, a gateway for ubiquitous digital communication and consumption, provides the wind in Bough’s sails.
A commitment to spend at least 10% of Mondelez’s media budget is common sense, he argues, as phones and tablets take up more consumer time and attention.
That goal serves as an important marker, because it helps set the pace, but only addresses one aspect of mobile’s marketing potential, Bough points out.
The real wins are in leveraging proximity to other key touchpoints, from the shelf in the convenience store to the TV in the living room.
Studies show that advertisers can double the effectiveness of TV spots by tapping into the general conversation generated by a particular program, invariably with a social campaign delivered through a mobile device.
“Let’s say most FMCGs spend on average 90% of their investment on TV,” Bough says. “If you can get 90% of your investment to work twice as hard, that’s a massive unlock.
"For us, that’s where the opportunity is – how they work together. No more thinking about media in isolation.”
Striking the right balance is tricky however, especially when a small spend can exert such a large influence on other media.
That becomes especially difficult in growth markets, where key information sources used to judge marketing success, such as retail data, are thin on the ground and often highly fragmented.
At the same time, mobile itself, a blanket term for a tangled mess of different technologies rather than a single channel, is particularly difficult to deal with – partly the reason why shifting budgets from other communication channels remains difficult.
Some believe mobile marketing will come into its own once ad formats are standardized, making them more portable, in the same way agreed standards for TVCs provided much needed traction in the early days of TV, or banner ads did the same for online.
Bough, however, is skeptical that day will ever arrive for mobile.
“The bottom line is that it is not going to get easier,” he warns. “It is difficult. But the winners are going to be those that realize, with a little bit more hard work, they can actually get a lot greater impact.”
The rewards are richer capabilities and opportunities that marketers never had before, from targeting to data collection (which makes driving traffic to Mondelez properties online even more important in data-poor markets in South and Southeast Asia).
From 360 To 36
Continued media proliferation is pushing marketing’s cherished goal of all-encompassing 360 degree communications further out of reach, Bough points out. Brands, and their agencies, have to get smarter, as budgets can’t hope to keep up.
“We jokingly talk about 36-degree communication,” he says. “How do you look very analytically at a consumer journey, and understand what are the key touchpoints that are most likely going to drive to your business objective?”
This shift triggered a global consolidation into two lead media agencies, Carat and MediaVest, charged with rolling out this new approach worldwide. Carat is the main agency for much of Asia-Pacific.
“Almost all the markets have been trained,” Bough notes. “We have a global backbone with over 80% of our spend with our two core agencies that are using this philosophy for every single brand, in every single place.
"The real driver and the engine behind this is the connections map. It’s communications planning.”
Also high on Bough’s agenda is exploring ways to work with local innovators and entrepreneurs, seeking to infuse Mondelez with levels of ambition and daring more often exhibited by scrappy start-ups than large corporates.
Soaring valuations for relatively young internet companies are a market endorsement for bold companies willing to break outmoded business models, posits Bough, keen for Mondelez to join in.
He is cheered by attempts to shake up Mondelez’s corporate culture in the US, where an initial wave of marketers were seconded to selected start-ups for a week – even though to a person they came back wanting to work at the smaller companies full-time.
After a week or so however, that energy turned inward, as hoped, where there are more resources and some big consumer-facing brands to play with.
“We now have a class of marketers who are going to move through that organization with that experience driving how they think,” Bough says. “We will accomplish that in some markets over and over again. The key is unlocking cultural trends.”
The US project was wide-ranging, also including an element to incubate start-ups internally, but Bough has started exporting the program to other markets, adapting it to suit the maturity of the local internet landscape, as well as Mondelez’s on-ground sales.
Brazil was next, followed late last year by a partnership with the Asia-Pacific branch of ad agency network, Ogilvy and Mather.
Mondelez imported its Latin American digital incubator, Fly Garage, to become the cornerstone partner for Ogilvy’s K1nd initiative, a recently hatched technology and design-oriented brand development unit. The partnership is being piloted in Australia and Southeast Asia.
A Chinese Classroom
China, with its own lively and quite distinct mobile ecosystem, could be next for a localized collaborative push. It’s a critical battleground that also doubles up as a classroom for the future of global marketing.
“This market not only has ambition but also a level of innovation and pace of change that we are not seeing any other place in the world,” Bough says.
“Let’s be brutally honest,” he adds. “It also has a totally different ecosystem of media partners on the digital and mobile front, which are taking lessons from the US and leapfrogging them.
"There is a lot to learn here. I firmly believe in a China-Out strategy. I see this continuing to be the marketing powerhouse for the future.”
As part of Mondelez’s digital transformation, Bough has already struck global deals with the likes of Google, Facebook and Twitter, vast networks for digital distribution, but these power-players have little sway inside the world’s most populous internet market, where local giants such as Alibaba, Baidu and Tencent rule the roost.
These companies, already amongst the largest in China, have international aspirations too.
Tencent’s popular mobile messaging app Weixin, marketed as WeChat outside China, is spending big, signing up football icon Lionel Messi to help promote the brand across growth markets in Asia, Latin America and the Middle East.
It won’t be long before Mondelez starts inking global deals with companies from China too, Bough speculates. That said, plugging into the fresh thinking coming out of China, driven by a competitive intensity unseen in the US, is just as important.
“This market is going to dictate different philosophies for us to think globally,” Bough contends.
“There are sometimes not clear market leaders like [image-sharing site] Pinterest, for example. There are four in China, all driving different types of innovation. Pinterest does not have that competition. It’s forcing us to think differently.”
That doesn’t mean Bough is neglecting other key markets in Asia.
India for example has seen some of Mondelez’s most effective mobile marketing pushes, he points out, including work on the localized version of Who Wants To Be A Millionaire, still a top-rating show, as well as a Twitter tie-up around the Indian Premier League (IPL), the country’s biggest annual cricket tournament.
India may lag China in terms of internet and smartphone penetration, but that’s no reason to hold back. Mobile is still a mass and personalized medium, with a reach that exceeds TV.
“Text is a huge platform, and underutilized,” Bough remarks. “At the end of the day, there is a very similar strategic approach or imperative around mobile, but with a different creative delivery.”
Bough: Four Reasons Why Mobile Makes Sense
1) “Mobile growth is extremely important. It is the first screen many people in growth markets will have, before they have anything else. You’re crazy not to learn how to win on this device.”
2) “It’s how you get the media messaging to the point of buying. This device is at the point of buying – that’s why it makes a lot of sense for us, that’s why it’s such a massive strategy.”
3) “For the first time in my life, I can target you at zero moment of purchase in-store, uninhibited without any other partner. All I have to do is have your address. If I tell you outside of a convenience store I see 10% lift; if tell you inside, I see 22% lift. Those are massive numbers.”
4) “The primary use of this device is social networking. All of a sudden this becomes an enabler that makes our media work much more effective. From my point of view, this is not a risk. It’s playing the numbers.”