Major Food Companies Increase Use of Internet, Online Coupons and Mobile Marketing

The large major food companies have increased the testing and use of new tech media over the last 12 months. By new tech media, we mean the use of online coupons, website marketing, mobile marketing and coupons, viral marketing, and all forms of internet advertising including search, banner ads, and other forms of web advertising. Food companies have been one of the more consistent advertisers on traditional media like cable television, print and Sunday newspaper supplements. More and more they are turning to non traditional media to test its effectiveness in reaching their target consumers.
The reasons for this increased usage are three-fold.
First, there is an overwhelming concern that traditional media is becoming less effective.The increased usage of TiVo (TIVO) and other recording devices suggests that many viewers are not watching the traditional television commercials. The same theory applies to use of Sunday newspaper coupons. As more and more consumers are time starved they are less likely to use or view the advertisements and coupons from traditional media.
Secondly, traditional media are by their nature mass media with only minimal targeting capabilities. More and more companies are looking to target their advertising to their key demographic groups. It hardly makes sense to advertise baby food to a household that has no children. Food companies are looking for ways to more effectively spend their marketing dollars and the new tech media generally has better targeting capabilities.
Third, the new tech media tends to appeal to younger, more affluent consumers. These people are especially tough for food marketers to reach because of their busy lifestyles and increased use of new media and decreased use of traditional media. These consumers are also the baby boomers of the future, so getting them now can lead to many years of brand loyal purchases.
Their are many examples of recent successful programs.Kellogg's (K) Corn Pops "gotta be connected" used an integrated platform of website and mobile to promote its brand. Kraft (KFT) sends e-mail dinner suggestions to mobile users. Kroger (KR) is testing a mobile coupon for shoppers through its loyalty card program. Online coupon sites are growing dramatically with more traffic and more coupon advertisers from the large food companies like General Mills (GIS) and Conagra (CAG). Smartsource.com (a subsidiary of News Corp. (NWS)) is thought to be the # 1 online coupon site, but there are many others including coolsavings.com, couponcraze.com and redplum.com (a division of Valassis (VCI)).
Growth in these new tech media will surely continue, but whether they take a large piece of advertising dollars from the traditional media will depend on their results and long term cost effectiveness.
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