Corporations Foster Dialogue On the Environment

January 14, 2008

While many corporations leverage the Internet to distribute information about environmental initiatives, a few companies are going much further by facilitating two-way dialogue with stakeholders.   

Some companies may view such dialogue – via email, web forums, chat rooms and video – as risky, as it may open them up to public scrutiny.  Moreover, this sentiment may be especially true today for those brands that compete in carbon-intensive industries. 

Nonetheless, companies that are bold enough to enter into a dialogue tend to find that the rewards outweigh the risks.  Dialogue creates a direct channel to stakeholders that can be used to gather feedback, build credibility, and engender more loyalty by showing a more human side of the company. 

In other cases, companies are using dialogue to activate stakeholders – including customers, suppliers, employees, partners and shareholders – as change agents by soliciting new ideas. 

There are several examples of dialogue in the environmental space.  Here are just a few: 

British Telecom: It seems that on most corporate sites today, users are hard pressed to find a specific contact to forward their concerns to, let along an email address that does not deliver to a general mailbox. 

BT is different in this regard as it offers a detailed listing of contact names and email addresses to send questions specifically regarding corporate social responsibility, corporate environment programs and environmental supply chain management.

dialogue_v3_bt.gif

Shell: Shell periodically conducts webcasts with senior-level executives on topics such as its annual Sustainability Report.  Interviews address questions solicited from stakeholders via email.   

dialogue_v3_shellv2.gif

Dell: When Michael Dell declared that he wanted to build the “greenest PC on earth,” his company launched IdeaStorm as a platform to solicit “direct feedback from, [its] customers, suppliers and stakeholders” on how to do just that.  Moreover, IdeaStorm engages its stakeholders as change agents by encouraging them to promote their ideas and discuss them online with Dell and other users.

dialogue_v3_dell.gif

General Motors: Chevrolet just announced a bold move in the green space by inviting the public to enter into a direct dialogue regarding GM flagship division and actions that it is taking to reduce its environmental impact. Through a New York Times advertisement, Beth Lowery, GM Vice President for Environment, Energy and Safety Policy asked the public to “talk” with Chevy about mutual concerns for the environment and what Chevy is doing to address them.   

Lowery asks the public to submit questions through a New York Times microsite that will be published in the Friday Op/Ed section.

dialogue_v3_gm.gif

While many marketers perceive direct dialogue as too risky, many companies have fully engaged with stakeholders on many sensitive topics including the environment.  For many, a direct channel to the customer provides a way to generate feedback as well as to solicit new ideas.  Others focus on creating a more human way to connect with stakeholders. 

Regardless, dialogue is consistent with key attributes of leading green brands including accountability, transparency and credibility. More companies need to overcome their fear of potential negative feedback and join the dialogue on green issues. If done correctly, dialogue will more likely mitigate than engender consumer backlash in the future.  

(Full disclosure: GM is a Digitas client)


Waning Opportunity to be Early Mover on Green

November 18, 2007

Today, consumers increasingly associate themselves with social responsibility, particularly on the environment:  BBMG recently reported that US consumers increasingly say that words like “socially responsible” (88% say these as words describe them “well”, 39% as “very well”) and “environmentally friendly” (86% well, 34% very well) describe them.  Additionally, Edelman reported that consumers are not just talking, but taking action:  40% of US consumers are more involved in social causes than they were two years ago and expect their brands to do the same.  The top issue that consumers care about globally?  Protecting the environment (92% of those surveyed).

As such, it should not be surprising that many leading companies today are responding by aligning their brands with more socially reponsible and eco-friendly activites and attributes (See “Defining Green Brand Leadership”, Marketing Green, October 29, 2007). There are several reasons why these companies feel the urgency to act:  First, they simply may be trying to stay relevant by aligning more closely with the evolving expectations that consumers have for the companies they purchase from and the brands they associate with. 

Second, they may be trying to secure a competitive advantage in the market as an early mover on green.  Pioneer status may bestow the companies credibly in the space, and perhaps enable them to reach new customer segments that have a strong affinity for the environment.  

 

Finally, companies recognize that it may be easier and far less costly to reposition a traditional brand as green today than it will be after Congress passes regulation that mandates all companies to do so.  Companies that wait for federal intervention will likely have to play catch-up when it does happen by complying with new mandates while convincing consumers of their green credentials.  By then, however, companies may have to do so in a crowded media space (because every company playing catch up will have to do similar) and face skeptical consumers who may question whether corporate motivations are genuine or simply done to comply with federal mandates.

 

Marketers should recognize that the window of opportunity is closing for brands to establish themselves as an early mover in the green space.  Today, not only is US consumer sentiment shifting, but the political winds are as well.  Backed or perhaps empowered by recent court rulings, politicians in Washington are floating legislation on climate change that will move the US closer to a time when being green is less of a differentiator than simply a cost of doing business.  Here is what has been happening:

States – led by both Democrats and Republicans – are pressing for change: With the announcement of the Midwestern Regional Greenhouse Gas Reduction Accord (MRGGRA) last week, 24 states have now committed to greenhouse gas emission targets.

States with Green House Gas Emission Targets 

states-with-ghg-targets_pdf.gif

based on Pew Center research and announcement of MRGGRA accord

 

Moreover, several state governors are actively campaigning for change.  For example, a recently launched TV campaign by the Environmental Defense Action Fund featuring three western governors, Arnold Schwarzenegger (R-CA), Brian Schweitzer (D-MT) and Jon Huntsman (R-UT) should help increase pressure on Congress to act.  This commercial is significant not only because it features two Republicans but that the governors represent Western states that traditionally champion states’ rights and frown on federal intervention.

Finally, major federal court decisions – three in seven months – hold regulators responsible for considering climate change risk when setting pollution standards.  The most recent ruling handed down last week by the federal Court of Appeals in San Fransciso overturned the Bush administration’s proposed fuel standards for light trucks and SUVs, stating regulators “failed to thoroughly assess the economic impact of tailpipe emissions that contribute to climate change”.  In doing so, the court sided with the plaintive that included 13 states and cities.

Political sentiment is shifting in the US in favor of action on climate change.  Marketers should consider taking action soon rather than later to green their brands in order to avoid playing catch-up afterwards.  Once Congress takes action, companies will lose the opportunity to build green credentials and shape their brand ahead of the pack.  Those that wait may struggle to catch up as consumers may question the integrity of their motivations. 


Defining Green Brand Leadership

October 29, 2007

“We will not be measured by our aspirations.  We will be measured by our actions”                   

– Wal-Mart CEO Lee Scott in making sustainability part of his core strategy

Great brands today understand that return on investment (ROI) using hard dollars is not sufficient to assess the overall impact of environmental initiatives.  Today, social norms regarding the environment are changing and consumers are increasingly holding brands accountable for what they do (and don’t do) rather than just what they say.  As a result, more and more companies are making investment decisions that incorporate brand impact and brand risk into their equations. 

Wikipedia defines brand as the “embodiment of all information connected to [a] product and serves to create associations and expectations around it.”  Though intangible, a brand may generate significant value for a company based on its ability to create differentiated experiences for consumers – and enable the company to generate and sustain future cash flows as a result. 

One way to view a brand is that it can enable companies to charge a premium for what may ordinarily be perceived as a commodity product.  Take for example Coca-Cola, the #1 brand based on the 2007 BusinessWeek/Interbrand survey.  According to the Brand Finance 250 annual report, Coca-Cola has the highest brand value – over $43 billion or nearly 40% of its total $110 billion enterprise value – in a highly competitive beverage market.   

While taste is indeed an important differentiator, Coca-Cola is able to charge a premium for its products – and generate significant brand value – primarily due to the strong brand loyalty of its customers. 

Increasingly, leading brand companies are recognizing that environmental issues have the potential to impact brand value – positively or negatively – and are taking action.  Coca-Cola clearly understands this and is aggressively responding with bold initiatives that are intent on shoring up its green credentials. 

For example, consumers today are less willing to accept that a plastic bottle will take 1,000 years to decompose in a landfill.  By proactively redesigning its bottle to reduce material use and pledging to recycle 100% of bottles sold in the US, Coca-Cola is clearly taking action to stay ahead of consumer brand expectations – and by doing so, defending (or perhaps enhancing) its brand value.

Does reduced material use lower production costs for Coca-Cola?  Absolutely.  Does committing to recycling 100% of its bottles help attract new customers?  Not necessarily.  Regardless, recycling bottles impacts its brand value – and ability to continue to sustain future cash flows – by strengthening connections with existing customers and mitigating potential risk to its corporate reputation as a result of negative PR.

Today, many leading brands like Coca-Cola are responding to consumer concerns about the environment by making investments that strengthen or shore up brand value.  Marketing Green believes that there are five actions that define green brand leaders. These five actions need to be considered by companies looking to green their brands: 

Be accountable.  Companies should acknowledge that environmental issues such as climate change are real and that, despite good intentions, they are part of the problem (and can be part of the solution). At this point, businesses are likely to alienate few consumers with such a statement and can begin to attract the growing group of consumers looking for green brand leadership.    

Additionally, businesses should audit their own operations and the lifecycle of their products – including sourcing, use and disposal – to determine their environmental impact and track these metrics over time. Indeed accountability, now considered one of the top pillars of successful marketing communications, cannot be underestimated when it comes to the environmental space.

Consumers are becoming increasingly savvy and increasingly demanding when it comes to the environment.  Companies should not be shy in setting high goals for themselves when it comes to the environment; if there’s any time to admit the future needs to be different than the past, it’s now.  

Be transparent.  More and more, leading brands are providing public disclosures of their environmental and social impact.  Today, in fact, 43 of the top 100 brands – including 12 of the top 15 – make public disclosures based on sustainability guidelines set by the Global Reporting Initiative. 

This reporting framework – first proposed by Boston-based non-profit CERES, endorsed by the United Nations Environmental Programme and supported by a consortium of leading brands including Alcan, BP, Ford, GM, Microsoft, RBC Financial and Shell – has become the de facto standard for environmental and social reporting globally.  Currently, more than 1,250 companies in over 60 countries are making disclosures using this framework. 

Another way that companies are demonstrating transparency is through partnerships with non-governmental organizations (NGOs) such as the National Resource Defense Council and Environmental Defense (ED).  NGOs provide credibility for a company because consumers view them as industry watch dogs. 

Certainly, one of the best partnership examples is the one forged between Wal-Mart and ED to make Wal-Mart’s operations and supply chain more sustainable.  In effect, Wal-Mart – not ranked in the BusinessWeek/Interbrand survey because it operates internationally under different brand names – has turned to a respected NGO to endorse its environmental efforts. 

This partnership hold such promise that ED announced last year that it was adding a staff position in Bentonville, AR in order to coordinate ongoing work with the retail giant.

Be credible.  Today, consumers are skeptical; too many companies have tried to green wash hollow environmental efforts.  As such, companies must work hard to build credibility and earn consumer trust over time.   

One way for a company to do so is to first green its internal operations, followed by its products and services, and then its marketing communications.  This way, companies ensure that they take responsibility for their own actions before encouraging consumers to do so with their products or through their messaging. 

But this is not the only way to gain credibility with consumers.  Companies like Toyota (# 6 ranked brand) started by greening its products (eg, hybrids) first.  The risk for a company, however, is that over time its own product enthusiasts are likely to challenge how the product is made.  In the case of Toyota, hybrid owners are now pressuring it to green its operations and manufacturing facilities and Toyota is taking action, according to Marjorie Schussel, National Manager of Corporate Communications, at the recent Green Conference sponsored by Ad Age. 

In contrast, Dell (#31 ranked brand, in contrast to #3 IBM and Dell archrival #12 ranked HP) started with its marketing communications first, declaring that it was going to be the greenest IT company on earth.  In doing so, it essentially admitted that its operations and products were not green yet but that it had every intention to make them green over time.  To help facilitate this transformation, Dell created a site called IdeaStorm to solicit input from its customers on ways by which it could go green. 

Be an enabler.  Leading brands should recognize that consumer expectations have changed.  It is not enough for a company to green its products; consumers expect the products that they purchase to help reduce the environmental impact in their own lives too. 

Recent research by Umbria, a marketing intelligence company, supports this.  Averill Doering, a consumer research analyst with Umbria, made the following observation: “[Consumers] see the [environmental] problem. They want to do something about it.  And, they want the companies they buy from to help them do it.” 

Such consumer expectations raise the bar and imply that consumers may hold companies responsible for the environmental impact of the products that they buy – across the entire lifecycle.  Consumers may increasingly care not just about product sourcing, but about its use and disposal too.  The emergence of eco-labels may serve to reinforce these consumer expectations as they will provide consumers with the necessary information to make greener choices by comparison shopping.  

Leading brands only need to witness the growth in hybrid sales – 49% during the first seven months of 2007 over the same period in 2006 – to recognize that consumers are actively seeking products that enable them to be greener.  Today, every major automobile company is following suit and is accelerating development and commercialization of greener automobiles. 

Be visionary. Visionaries are willing to make bold decisions that redefine their strategy or reshape industry dynamics.  Today, there are many emerging green visionaries.  Among them is Wal-Mart. 

In June of 2004, a pivotal meeting took place between CEO Lee Scott, Rob Walton, Board member and son of the late founder, and Peter Seligmann, Co-founder and CEO of Conservation International.  Walton and Seligmann were friends and had often discussed the potential impact that Wal-Mart could have as the largest global retailer if it were to change the way it did business.   

The pitch to Scott: Wal-Mart had long been criticized for its labor practices, employee health benefits and environmental record.  Given its buying power as the world’s largest retailer, Wal-Mart was in a unique position to affect change in the retail space and do so in a way that would greatly reduce its impact on the environment while saving money, growing revenue and positively impacting its brand image. 

Over time, Scott has essentially turned this pitch into Wal-Mart’s modus operandi.  Not only did Scott set ambitious goals regarding sustainability – 100% renewable energy, zero waste, products that sustain our resources and environment – but he has made it a central component of his strategy and brand positioning.   

Wal-Mart first demonstrated the demand for more sustainable products when it began selling organic cotton yoga outfits through Sam’s Club: 190K sold in less than 10 weeks. This year, Wal-Mart challenged itself to sell 100MM compact fluorescent light bulbs (CFLs) and has already surpassed that goal.  To do so, it combined its marketing muscle to heavily advertise the CFLs in its stores, and purchasing clout to be able to drive down the cost substantially over just one year ago. 

Moreover, Wal-Mart is intent on making its suppliers more sustainable.  Earlier this year, Wal-Mart launched Sustainability 360º, a program intended to enlist its employees, suppliers, customers and local communities to help reduce environmental impact.  This month Scott hosted a Sustainability Summit to connect Wal-Mart suppliers with vendors that could help them become more sustainable.  

Finally, Wal-Mart has expanded its brand positioning to include not just its long time low cost promise, but also “affordable, sustainable products that help [customers] live better every day.”  “Save Money. Live Better” is now the Wal-Mart tag line.    

Increasingly, companies recognize that environmental issues can impact brand value.  In response, leading brands are increasingly incorporating brand metrics into their evaluation criteria for green investments; they are also taking action to green their operations, products and marketing communications.   

Smart brand marketers should think twice about simply focusing on near-term green revenue and cost savings opportunities; the path for sustaining growth needs to also start with greening the brand.


Drought Can Spark a National Dialogue on Climate Change – Part II

October 20, 2007

“You can’t call it a drought anymore, because [the US Southwest is] going over to a drier climate.  No one says the Sahara is in a drought.”   — Richard Seager, Scientist, Columbia University’s Lamont Doherty Earth Observatory as quoted in “The Future is Drying Up”, New York Times Magazine, October 21, 2007 

As first published in its July 14, 2007 posting, Marketing Green believes that persistent drought in the US can be an effective catalyst that sparks a broader, national dialogue on climate change.  With drought conditions worsening in areas of the US, the time is now for such a conversation. 

Drought can be a catalyst for a broader dialogue for many reasons. First, drought will directly impact the human condition, causing inconvenience and suffering.  Second, drought will likely cause economic hardship by limiting growth, reducing output, and significantly increasing costs (eg, building infrastructure to move water long distances or desalinate water).  Finally, droughts force political leaders to make unpopular trade-offs that require voter sacrifice. 

Indeed, as tomorrow’s New York Times Magazine reports, drought conditions are worsening in the historically dry Southwest while expected population growth will put more demands on limited resources in the years to come.  Shortages are on the horizon across the region, but are especially apparent in cities like Las Vegas which is dependent on water from Lake Mead, the largest man-made reservoir in the US, that is currently at less than half of its capacity.   Moreover, continued shortages will likely pit one entity against another in price wars and legal battles as individuals, businesses and governments compete for scarcer resources. 

Drought conditions in the typically temperate US Southeast may demonstrate a more alarming trend because they are so unexpected.  With scorching heat this past summer and a hurricane season that failed to materialize, the city of Atlanta confronts the drier winter season with record low water levels in its reservoirs.   Most experts agree, it is the driest period every recorded in the Southeast; few signs are on the horizon that suggest the situation is likely to improve any time soon. 

Interestingly, extreme drought in the Southeast is fueling water disputes between regional states over scheduled water releases from Lake Lanier, the primary water source for three million Georgian residents, that are mandated by the Endangered Species Act and enforced by the US Army Corps of Engineers. 

Currently, as Georgia enters what is typically its driest month, Lake Lanier holds a mere 81 days of stored water left.  Georgians have responded by imposing severe restrictions on water use, but unbridled growth over the past decade and limited water use planning up until now have put a strain on existing resources.   

But, it is the actions by the Georgia legislature that, perhaps, are generating the most controversy.  Pending legislation would temporarily wave compliance with the federal Endangered Species Act and allow Georgia (via the Corps) to suspend water releases from the Lanier that currently protect endangered mussels and sturgeon downstream.  So far, the Corps refuses to budge which means that a legal showdown is likely ahead. 

The state of Florida has leveled a complaint already, asking Georgia to release more, not less, water to protect Floridian biodiversity.  Moreover, Gov. Bob Riley of Alabama has asked the Corps to release additional water from other Georgian water sources in order to alleviate shortages in that state.    

It is likely that cross-border disputes will only intensify if sufficient rains do not come soon.  In fact, facing severe water shortages, Atlanta may soon become the first metropolitan region to reduce water available for commercial and industrial activities, a threat to the local economy.   These threats will only be compounded if reservoirs do not refill before next summer when water use is traditionally the highest.  

As water become more scarce and entities compete for dwindling resources, marketers have an opening to leverage drought a conversation starter for a national dialogue on climate change.  In many ways, expanding drought conditions will force the conversation as we will have to deal with consequences of a drier climate whether we are prepared to do so or not.  

Because the populous in the US is geographically dispersed, however, marketers risk that such discussions will be isolated to those regions most affected.  As such, it is an imperative for marketers to broaden the discussion regarding worsening drought conditions and their causes to create a truly national debate.


Testing Green Promotional Benefits to Drive Acquisition

September 16, 2007

Promotional benefits are a popular marketing tactic used across almost every industry to acquire new customers.   Marketers like offering such benefits as they can greatly increase acquisition rates or drive repeat purchases over time.  

It should come as no surprise, therefore, that the use of promotional benefits has been extended to the green space.  Using “green” promotional benefits – that is, incentives that have environmental benefit – to drive acquisition, however, is unchartered territory as there are few benchmarks to validate their use or their effectiveness.

Nonetheless, such green benefits are increasingly being offered across a variety of product categories.  Here are just a few examples:

Autos: Volkswagen of America announced its “Carbon Neutral Project”, a campaign that offers to offset the carbon emissions for one year.  This promotional benefit is being offered on a trial basis and expires on January 2, 2008.

Banking: Several banks offer discounts on auto and home-equity loans that pay for environmentally-friendly goods. One of the most generous is the Carolina Postal Credit Union, which serves US Postal Employees and Federal Employees in North Carolina, which offers a 1% discount on auto loans when purchasing a hybrid.

Credit cards: Today, it is common for credit card companies to offer one-time bonus miles for signing up for an airline affinity card.  The latest entrant into the green card market, Metabank, puts a different spin on this promotional benefit: bonus carbon credits.  Every new applicant receives the equivalent of 10,000 lbs of CO2 offsets – the average annual CO2 emission of a car in the US – when they sign up for their green card.

Real Estate: NY-based Moss Real Estate Group offers both buyers and sellers in a completed transaction offsets for their carbon emissions for one year.

Telecommunications:  San Francisco-based wireless carrier Working Assets announced that it offers new subscriber a “carbon neutral phone” (a $55 value) to offset average CO2 emissions caused by phone use over the next year.

Green or not, promotional benefits come with clear economic trade-offs.  First, benefits can be very expensive, as not only do they reduce net revenue and increase costs, but they are likely extended to many prospects that would have converted anyway.

Second, promotional benefits tend to attract incremental customers with “lower repurchase rates and smaller lifetime values” according to Michael Lewis, Assistant Professor of Marketing at the University of Florida. 

In fact, his study of consumer-level data from the newspaper and online grocery industries offers sobering results: “a 35% acquisition discount results in customers with about one-half the long-term value of non-promotionally acquired customers.”  (“Customer Acquisition Promotions and Customer Asset Value”, Journal of Marketing Research, May 2006).  As such, while benefits attract new customers, they may not necessarily generate economic value in doing so.

As the impact of green promotional benefits remains uncertain at this time, Marketing Green recommends a cautious approach for marketers: test the efficiency and effectiveness of this type of program with a small, targeted audience before scaling more broadly.   

Such in-market tests should seek to answer five key questions that can impact program design, target segments and types of offers:

  • What value do consumers place on green benefits, either perceived or actual?  How does this value differ by target segment and product category?
  • Who should be the recipient of this benefit – the individual consumer or society (eg, via a donation to a non-profit organization, for example)? 
  • Do green benefits expand the market or simply reward those that would already purchase a product or service?
  • Do green benefits impact average customer lifetime value positively or negatively over time?
  • Do green benefits generate brand value by positioning the company as more socially responsible?

Moreover, Marketing Green recommends that marketers should assess whether consumers understand these green promotional benefits (eg, what do carbon credits mean?) as well as their equivalent economic value (eg, how much is it worth?).  Without broad acceptance of these promotional benefits by consumers, marketers may find that they also have to invest in consumer education if they want to target anyone today but the most committed green consumers.


Visualizing Green

August 16, 2007

Images are powerful marketing tools. For marketers, they provide powerful stimuli that can augment messaging and influence consumer behavior and beliefs.  Here are a few suggestions for marketers using visual images in the green space: 

Chose the right image.  Images can affect change by amplify existing or associating new attributes with a brand or marketing messages.  In the green category specifically, imagery has the potential to evoke strong emotional responses from individuals with a vested interest in or passion for the category. 

Today, consumers have preconceived notions about what colors and images are aligned with green.  Research prepared through a partnership between the Yankelovich Group and Getty Images (“Going Green”, Yankelovich Group webinar, June 27, 2007) yielded powerful insights regarding green imagery: consumers believe that the color “forest” green and images of actual forests, (followed by images of water including oceans, rivers and streams), are the most representative of the environment (based on a palate of green color and image stimuli that consumers were exposed to during research). As such, marketers should carefully consider color palate and image selection in order to align with existing consumer perceptions associated with the environment.  (Getty hosts a gallery of powerful green images on its site). 

Track how visual language is evolving.  How consumers interpret and understand “visual language” is continually evolving.  Understanding this evolution can provide marketers with valuable insights to drive successful campaigns.  Here is one example: As part of its research with Yankelovich, Getty identified “key concepts that will influence the future of visual language” in green.  The key concepts include the following:

  1. The Future 
  2. Goodness
  3. Simplicity
  4. Legacy
  5. Inheritance
  6. Purity
  7. Care
  8. Trust
  9. Sustainability
  10. Fresh & Clean

For marketers, such concepts provide relevant ways to connect consumers with green and should be considered when crafting a marketing campaign.

Moreover, green marketers should take note of emerging patterns across these concepts.  For example, four concepts – “the future”, “legacy”, “inheritance” and “sustainability” relate to what we leave for our children.   Additionally, words like “goodness”, “purity” and “fresh and clean” may perhaps evoke a sense of natural goodness.  (“Going Green,” June 27, 2007).

Pick images that allude to ideas beyond the stated message.  Unlike the written word, images “elude empirical verification”.  This enables marketers to leverage the suggestive potential of an image without being held accountable to the degree that you would be if making written or verbal “product claims or political promises”. (Schroeder, Jonathan, “Introduction to the Special Issue on Aesthetics, Images and Vision”, Marketing Theory, 2006; 6; 5)

Let visual imagery influence new product development and design.  Today, marketers typically choose images as part of the overall strategic branding or marketing campaign tactics.  However, given the strong association by consumers of certain images with green, marketers (and product managers) may want to turn this approach on its head.  Instead, companies should consider perhaps developing products that more closely “fit the image” of green already held by consumers, rather than the other way around.  To do so, product designers and green marketers should leverage this imagery to inspire new designs and shape marketing initiatives. (Schroeder, 2006).


Search Is Paramount in the Emerging Green Category

August 7, 2007

Paid search continues to grow and is now considered by most marketers to be a core component of their online marketing tool kits.  This continued growth is not surprising, however, as it is hard to beat search as a marketing channel for both its efficiency and effectiveness. 

There are several reasons for search’s continued dominance.  Search allows marketers to 1) engage consumers as they actively seek information in market, 2) connect consumers with relevant content based on self-identified interests, 3) pay only when consumers click on a sponsored link, 4) scale spend in the channel (to a point) and 5) enhance the productivity of other channels.  For example, building awareness with a 60-second spot will likely result in more searches being conducted by consumers that turn to the web to find out more information or link to the advertiser’s site. 

To green marketers, search also represents a powerful component of the overall media mix.  In fact, Marketing Green believes that search is even more critical for marketers of green products than for more established products because green is an emerging category that has high consumer interest but is difficult to navigate due to the lack of familiarity and standards.   

Moreover, green search will continue to increase as awareness and interest grows and consumers increasingly turn to the Internet for answers.  Here are few reasons why, as well as recommendations for green marketers on how to maximize the impact of the search channel: 

Consumers have a growing interest in green, but limited familiarity.  Many consumers are curious about the emerging green category but have relatively low understanding of the category or how to navigate it.  As such, consumers are more likely to research product choices before making purchase decisions and turn to online search when they do so. 

For marketers, this means establishing broad presence in paid search across both the general as well as green vertical search engines in order to intercept consumers when they actively seek category-, product- or brand-specific information. 

Consumers today conduct that vast majority of green searches through general search engines such as Google and Yahoo and will likely to continue to do so in the near term. The popularity of green vertical search engines – including Green Maven, Greener, GreenGamma, LiveGreenOrDie, GreenLinkCentral, EcoEarth, EcoSeeker and Earthle among others – is growing nonetheless based on the perception that green vertical search engines return more relevant results than general search.

greenmaven.gif

In addition, green filters are emerging that allow consumers to search with greater precision either as an overlay to existing search engines or as a way to narrow the results based on a set of business rules regarding green.  Palore is one example which enables consumers to identify green merchants when using Google’s search engine.  Below is Palore functionality loaded into Google Maps.  Note the symbols included under each listing – including the carrot which denotes that the restaurant offers organic foods.

 palore2.gif

In addition, online sites are emerging help locate products and retailers offline.  Evolvist locates products and retailers by geography.  evolvist.gif

Alternatively, Alonovo filters products and retailers based on their relative corporate social responsibility and “greenness”.

alonovo.gif

Products and brands are proliferating.  Green products are being launched every day across almost every product category.  Product “greenness” is relative, however, which results in a spectrum of products, features, benefits and trade-offs that consumers must weigh before making purchase decisions.   

As product proliferate, so too will our vocabulary that describes them.   

Marketers should, therefore, take advantage of this by greatly expanding and testing the number of keyword and keyword combinations purchased.  Moreover, these lists should align with marketing campaigns and their objectives across the purchase funnel.  For example, an awareness campaign should include both branded, category and product-specific keywords.  Marketers should refresh this list frequently as the entire category is still very much in flux.

Consumers are hungry for relevant content.  Lacking familiarity with green products, consumers turn to credible information sources to learn about products, compare features and validate choices. 

Marketers should respond by providing relevant content on landing pages that link from both paid – and natural – search. This is important for several reasons.  First, consumers are more likely to engage in the content if it is relevant to their search.   

Moreover, content that pays off corresponding keywords searched translates into a better, more relevant consumer experience.  This is important with current algorithm-based search engines, as well as with emerging community-powered and/or customized search engines such as Eurekster Swicki, Rollyo and Yahoo Search Builder.   

In a world where consumers put considerable trust in the opinions of their peers, community-powered search engines will likely become more popular as search results are informed by the collective experience of the community.

 swicki.gif

This is especially important in an emerging category such as green.  With green products emerging rapidly, relatively low consumer familiarity and few standards, consumers will likely turn to peers to help make informed purchase decisions; community-powered search engines will likely play an important role in facilitating this process in the near future.


Follow

Get every new post delivered to your Inbox.

Join 61 other followers

%d bloggers like this: