Driving Adoption of Renewable Energy: Part II – An Energy Marketer’s Perspective

Interview with Adam Capage, Director, Utility Partnerships, 3Degrees

 

With the #1 renewable energy program in the US, the City of Palo Alto Utilities (CPAU) must be doing something right.  In fact, despite a formidable price hurdle, CPAU has managed to sign up over 20% of Palo Alto residents for clean energy, and is not finished yet.

 

Notably, when CPAU decided to aggressively market renewable energy to its customers, it decided to reach beyond traditional utility circles to engage the right marketing partner.  For that, CPAU turned to 3Degrees to educate consumers and convert them to clean energy.

 

Recently, I had the opportunity to talk with Adam Capage, Director of Utility Partnerships at 3Degrees.  We spoke of the challenges that marketers face when trying to shift consumers to renewable energy, the approach that 3Degrees takes and reasons why it has been so successful.  Here are his words:

 

MG: How do you partner with utilities?

 

AC: Essentially, we partner with utilities by leveraging their brand and their customer connections [and combine it] with our knowledge of how to talk to people about why they’d want to support renewable energy. 

 

The Palo Alto partnership was [our] first utility partnership [formed] in 2003.  When we partnered with Palo Alto, they had already had a green program operating for three years and it had not yet reached 1% participation. 

 

In many ways Palo Alto had the ideal demographics for marketing this product.  And so it’s very tempting to just think “Well hey, its Palo Alto, of course they’re at 20%”.  But, the product did exist for three years [before involvement by 3Degrees] without hitting 1%.  So, it’s a combination.  Yes, demographics are key.  But, you do have to talk to [consumers] repeatedly and get the messages out there and that’s what we’ve been focusing on. 

 

Since 2003, the participation rate has basically sloped upward the whole time.  Today, we’re actually over 20% now and we haven’t seen any slowing.  We keep kind of wondering if and when it will slow, but it hasn’t. 

 

Traditional thought was that there was low hanging fruit [to acquire] and then it would get harder to acquire people over time.  Instead, it seems that you can create new low hanging fruit.  As you talk to people, you make [renewable] an accessible, appealing product to new groups.  Another possibility is just that Palo Alto has such a huge percentage of their population with [the] perfect demographics [for purchasing renewable energy] that you can get an incredibly high penetration rate.

 

MG: Do you tailor your message to particular subgroups within the city?

 

AC:  No.  The real challenge is that renewable energy requires people to pay a premium and they have absolutely nothing [tangible] to show for it.  People for a long time tried to compare this to organic food or bottled water or other premium product.  And, you just can’t do that because with bottled water people think they’re getting [a personal benefit like] cleaner water.  With organic food they might be stopping themselves from having pesticides.  [Unlike with renewable energy], it’s not just about the public good.

 

[Marketing clean energy] is like a request for people to make a private contribution to a public good.  And that’s just damn hard. 

 

I think that the best parallel is public radio and TV knowing that people understand that the programs are very likely to continue whether or not they pay up, but they do it anyway.  With renewable energy we need to put a line item on the bill that says you pay more.  It’s very hard to make people get connected to what they’ve done.  So we try but you know we can’t be in the home everyday like public radio or TV. 

 

We focus on a message that you can make a difference and there are specific environmental benefits to purchasing renewable energy.  We link [environmental benefits] to specific energy usage and [provide] examples of benefits that are local.  And then we repeatedly try to get that message out there.

 

MG: Do you focus your message on awareness or consideration for purchase?

 

AC: When we start each [partnership], it is like going back to 2003 in Palo Alto; you start from ground zero.  It’s a cluttered market and it’s hard to break through so awareness is definitely our first battle.  

 

With Palo Alto I think that awareness has come a very long way.  I don’t think they’ve done research recently, but I bet it’s pretty high  so now we’ve got messages that simply say “just do it”.

 

MG:  What is average price premium for renewable energy?

 

AC:  It varies quite a bit around the country based on the premium for clean energy, current electricity rates and the amount of energy that is consumed.

 

In California the average household uses something like 500 or 600 kilowatt hours a month, where as we have a partner, Amerin, that is based in St. Louis.  Its Missouri customers use on average 1,000 kilowatt hours a month.

 

The premium for Palo Alto [residents] that convert [to renewable energy] is going to be between $5 and $7 per month I think.  For our partnership in Amerin, it’s closer to $15 per month on average. 

 

MG:  Aren’t renewable energy prices independent of oil price shifts?

 

AC:  The programs aren’t designed that way.  A few [utility tariffs] in the country are actually designed where the renewable energy price is essentially substituted on people’s bills for their traditional fuel.  Those programs have seen great success.   Everyone understands why they’ve seen [success] as they have a whole new message to talk about: price stability because [the price of] renewables never change.

 

Most programs are designed where the renewable energy premium is on top of what they already pay.  So the thinking [by consumers] is renewable energy is more expensive.  You aren’t actually getting the electricity from [specific] wind turbines anyway.  What your dollars are doing is allowing the utility make more investments in putting renewable energy into the overall mix.

 

Hence the public good part: your electricity comes on just like everybody else’s except you pay more.

 

MG: Are you actually paying for 100% equivalent renewable energy?

 

AC:  Yes.  Not every program in the country is designed the same. But, our five partnerships are all 100% usage.

 

MG: What are the key customer insights for purchase of renewable energy?

 

AC:  A few people talk about new technology and want to support it.  A few people talk about fuel prices going through the roof and we are beholden to the Middle East, so they want to support another source. But the majority just says “I want to make a difference”.  It seems like one small step, one small opportunity for [consumers] to do that.

 

MG:  Can the success of Palo Alto be replicated across the country or is this an anomaly?

 

AC:  20% might be an anomaly but I know that, in general, these [renewable energy] programs are underperforming.  We have five like I said.  One of them just started and so it only has a couple tenths of a percent participation.  But all together our five average 7.8% participation.  The industry average is 1.8%.  You can do this better.

 

MG:  What’s the secret?

 

AC:  I think that the partnership model is a really good one.  The utility has the customer’s eyes and contacts and, in most cases, the customer’s trust.  That is certainly true in Palo Alto.

 

3Degrees brings the messaging and dedication to execution.  The single best thing we’ve found is that you collect information about what channels and messages are working well and you just execute again and again and again and again. 

 

That’s not what utilities do; they are not marketing organizations.  We do the marketing behind their brand and no one ever knows our name.  We want it that way.

 

MG:  Do you think that the social narrative has changed given Al Gore’s movie a few years ago and just the growing reality and awareness of global warming?  Has that context enabled you to move the needle further?

 

AC:  It definitely helps.  We were out in front of movie theaters when Al Gore’s movie was released.  We set up tables outside to intercept people came out of the movie.

 

MG:  When you target utility customers, what kind of marketing campaign do you implement?

 

AC:  The campaign is continuous.  Email, bill insert, direct mail, events.  We’re spending money and testing different channels all the time except TV.

 

Yard signs are also used to bring to peoples’ attention that their neighbors have done this.  We get requests [for signs] saying I want to show people that I did this.

 

MG: Were there other ways that you tapped viral marketing or activated influencers?

 

AC:  We did holiday card campaign where we sent all Palo Alto participants a card that they could send to their friends saying “I participated in Palo Alto Green and you can too”.

 

We offer wind tours where we let participants come and then, hopefully, tell other people about going to a wind farm and seeing what their money is supporting. 

Driving Adoption of Renewable Energy: Part I – A Utility’s Perspective

Interview with Tom Auzenne, Assistant Director, City of Palo Alto Utilities

 

Electrical power generation accounts for 40% of total annual greenhouse gas emissions (GHG) in the US.  Such a high concentration of GHGs is due to our reliance on highly polluting fossil fuels, especially domestic coal.  Yet, while the popular press focuses on the recent growth in renewable energy, it still provides only 2% of our total electrical needs today. 

 

Until recently, many arguments have been made for why adoption of clean energy remains slow.  Certainty, price ranks as the #1 barrier to broader adoption.  Other factors include reliability concerns and lack of education about the technologies.

 

Interestingly, Palo Alto, California has bucked this trend.  Over the course of several years, the municipal utility has partnered with 3Degrees, a utility marketing company, to encourage residents to sign up for its PaloAltoGreen program which provides 100% renewable energy from wind and solar power sources.  The results of this program have been astounding, with over 20% of all residents switching to clean energy.  Indeed, PaloAltoGreen is now ranked as the #1 green energy program nationwide based on participation.  

  

What does this mean for GHG reduction?  Well, it is quite simple: the purchase of 41.5M kWh of renewable energy translates into a reduction of 350,000 tons of carbon dioxide annually.

 

Recently, I had the opportunity to speak independently with both Tom Auzenne from the City of Palo Alto Utilities. We spoke about consumer interest in renewable energy, barriers for greater adoption by consumers and key reasons for this program’s success.  Here is what Tom Auzenne had to say:

MG: Who purchases renewable energy in Palo Alto?  What is the mix between residential, commercial and governmental entities?

 

TA: PaloAltoGreen (PAG) is the City of Palo Alto’s 100% renewable energy optional program open to all residential and commercial customers with an active electric service provide by the City of Palo Alto Utilities. The program has about 20% of the customers involved, with residential customers making up on average 95% of the mix and the commercial customers at 5%. Our residential sales account for roughly 60% of the program sales with commercial and governmental making up the rest. 

 

However, starting with July 2008, both the City of Palo Alto (CPA) and the Regional Water Quality Plant (RWQCP) are increasing their commitment to buy renewable energy equal to 30% of their total usage, a ten-fold leap from the previous 3% of total usage purchases.  This will increase the percentage of nonresidential customers in the program.

 

MG: Describe the demographics of your average residential customer that signs up for renewable energy?  How do they differ from the average utility customer in Palo Alto?  Across the US?

 

TA: As a general rule, the residential PAG customer is well educated, in a high income household and is environmentally progressive.  Most are thinking about their environmental impact and want to do something about it.

 

One of the primary differences from other green pricing program around the country is that PAG customers generally use less energy per month than our average customer.  PAG customers use 400-600 kilowatt hours (kWh) per month compared to the national average of about 888 kWh (according to the DOE).  This indicates that our customers may also be trying to reduce their electricity usage through energy efficiency or other measures.

 

MG: What motivates residents of Palo Alto to switch to renewable energy (e.g., attitude toward the environment, concern for their kids, financial incentives, community empowerment, etc.)?  Are their attitudes substantially different than the rest of Americas?  If so, in what ways?

 

TA: There are many motivations leading to program participation. These include being role models for the next generation, “doing the right thing” for the environment, and buying renewables as a logical next step after energy efficiency.

 

CPAU strives to communicate the environmental benefits of renewable energy to Palo Altans in as many ways as possible. Combine this near constant communication with high community awareness of the issues surrounding climate change, and you have the combination that brought PAG such success.

 

  

We also work closely with the Palo Alto Unified School District on energy and curriculum.  Many customers not participating in PAG have taken a more direct approach, and have installed their own photovoltaic (PV) systems rather than buy renewable energy from the market. Between January 2007 and March 2008, 92 PV systems were installed in Palo Alto, representing 250 kW of generation.

 

MG: What, if any, is the premium charged for purchasing renewable energy (vs. non-renewable) today?  What factors do you attribute to a customer’s willingness to pay such a premium (e.g., level of affluence, attitude regarding the environment, etc)?  Do you think renewable energy will be adopted by a majority of customers without eliminating the premium altogether?

 

TA: Residential and small commercial customers can enroll in PAG for 100% of their monthly electric usage at a premium of 1.5 cents/kWh. Large commercial and industrial customers can buy renewable energy in blocks of 1,000 kWh for $15 per block. This allows them to support renewable energy at a level that makes business sense.

 

One of the nice things about PAG is that the price doesn’t fluctuate. CPAU hasn’t changed the price for 100% renewable energy in five years and has no plans to do so. The demographics of Palo Alto are also great for marketing renewable energy, as our customers tend to be interested in the environment and can have a level of disposable income that allows a lower barrier to participation.  

 

MG: A 20% adoption rate for renewable energy is impressive.  Can this success be replicated across the country?  If so, what will it take to do so?  If not, what are the obstacles (e.g., low awareness, lack of urgency, difficult process to switch, price premium, etc.)?   

 

TA: With the continuous support of our local elected officials on the City Council, the staff of the City government, the employees of the Utilities Department, and, of course, our great customers, nearly everyone is behind this program. This type of support is vital to the success of a green pricing program in Palo Alto and elsewhere in the country.

 

Other factors that need to be in-place, or created, include customer awareness of the environment, a history of energy efficiency, an active partnership with the schools and students, and a willingness to lead.

 

It should be noted that not all the program participants have vast disposable incomes. Participants are both young and old, in the prime of their earning years or on fixed incomes, have children or are childless. All share, however, the same vision of, and desire for, a sustainable future.

 

MG: What are your primary marketing objectives in the residential and commercial markets?  Do you find the need to spend significant time building awareness of either the category or the technology?

 

TA: CPAU has found that targeted messaging, repetition, clear information about the product and a call to action (“closing the sale”) bring results. If the job is done correctly, then customers are aware.

 

For those customers that have more questions, we have many ways for them to find answers to any question that they might have.

 

MG: Is there any skepticism on the part of consumers regarding the (reduced) impact that renewable energy has on the environment? 

 

TA: There are always skeptics, but we focus on educating consumers on the positive aspects of the renewable energy we provide.  With the melting of the North Pole ice and the retreating of the Swiss glaciers, featured on the Evening News, skepticism has been reduced or eliminated.

 

MG: Please describe how you partner with 3Degrees in terms of your marketing efforts.  What are the core components of these marketing efforts?  What made them so successful?

 

TA: 3Degrees specializes in marketing renewable energy. They have partnerships with utilities in California and around the country. They are able draw on their experience and accumulated data to provide targeted marketing and program management support.

 

CPAU brings its knowledge, reputation and trust of the community to this partnership to help sharpen the marketing even more. With their experience and our community awareness, we have created one of the most effective, and successfully marketed, green power programs in the country.

Getting Smart About Green Targeting

An Interview with Amy Hebard, Chief Research Officer and Founder, earthsense

 

Marketing green can be a challenge for even the most seasoned professional.  There are many reasons for this of course: consumer beliefs are still evolving; demand is not well established; and even where it is, purchase behavior tends to be inconsistent (e.g., the same consumer buys the hybrid and the SUV).

 

For green marketers to be successful, they must effectively and efficiently target their audience when and where consumers are most receptive to green messaging.  For marketers, this is no easy task. 

 

While green content sites or periodicals may seem like a natural fit, advertisers must remember that consumers come in all shades of green.  As such, focused periodicals may only reach “deep greens” which today represent only a fraction of the total population that express some level of interest in green.  Instead, marketers must target their audience in more mainstream channels.

 

Today, companies like earthsense are emerging to empower marketers to do just that. 

 

At its core, earthsense is a market research company focused on green consumers.  What differentiates earthsense, however, is the depth and breadth of it dataset regarding consumer attitudes, behaviors and demographics.  This dataset is based on both proprietary research as well as partner data sources.  For marketers, mining this dataset has the potential to uncover rich consumer insights that can help shape messaging, as well as guide marketing and media investments in a more targeted way.

 

Recently, I had the opportunity to speak with Amy Hebard, Chief Research Officer and Founder of earthsense.  We spoke about earthsense’s unique data set, consumer insights derived from the database and opportunities to leverage the data to more effectively target consumers, particularity via retail channels.  Here is what she had to say:

 

MG: Earthsense fields one of the largest surveys in the green space.  What makes your data unique?

 

AH: Targeting and finding the “green” consumer – whether we’re talking about “super greens” willing to pay a premium, mass market “greens” who want to be eco-friendly without an added charge, or “non-greens” who wouldn’t buy “green” products even if they cost less than standard prices – is an enormous challenge for many marketers today.  

 

When we started earthsense, we knew that we needed to take a fresh look at the resources available to us to solve this problem.  We decided to combine best-in-practice techniques of market research, database marketing and advanced geo-spatial analysis to provide new insights in this space.

 

First, our Eco-Insights survey is the largest by far in the US: we survey 60,000 US adults each year.  This gives us unprecedented capabilities to slice and dice our data for almost any demographic group of interest (e.g., high income earners, newlyweds, parents, baby boomers, college students, expectant moms, etc). 

 

Second, and even more important, is our ability to append almost any kind of data, because we have geocoded each record.  While personal information remains anonymous to us, we supplement each record with additional data to complete our profiles.  This includes neighborhood level demographics and “exographic” data (i.e., data about the community in which they live).  This includes air quality in the community, data regarding traffic congestion, and nearness to a Wal-Mart or other major chains, for example.

 

In short, we believe there are a multitude of factors that shape consumers’ desires and ability to go green.  And we think the answers can be found by fusing data from various sources to find patterns that are not easy to detect using the data available through the other providers.

 

MG: What types of data categories do you capture? 

 

AH: In addition to the extensive demographics and exographics just mentioned, the survey covers several key modules:

 

Product Category Coverage:  The backbone of Eco-Insights is our product category coverage. For each of more than 70 different categories in our most recent wave, we know how consumers define “green”, what categories they’ve bought recently, their primary reason or motivation for doing so and main deterrent when they do not. 

 

Corporate Ratings:  Another important module is the Earthsense Corporate Ratings.  Between Fall 2007 and Spring 2008, we covered over 700 companies familiar to consumers from many of the largest Fortune 500 companies like Exxon Mobil, HP, and P&G to small but growing companies like Earthbound Farm, Eden Foods, and Stonyfield Farm.  In addition, we include 73 supermarket market chains – nearly every major one in the US – and over 77 restaurants, including 39 Quick Service Restaurants such as Starbucks and Pizza Hut and their competitors.

 

We know which chains people shop in (primary and secondary).  We also know how they perceive these companies including the extent they believe that the company is following sustainable business practices and the impact of the company’s products on the environment. We ask similar questions around their electrical utility.

 

Attitudes & Behaviors:  A third key module covers environmental attitudes and behaviors.  We ask:  ‘Are consumers concerned about the quality of our environment five years from now?’;  ‘Do they believe individuals can make a difference?’; and ‘Do they think “greenwashing” is a problem?’.

 

And for behaviors, in addition to their green purchasing we mentioned earlier, we want to understand how consumers act based on the three R’s [reduce, reduce and recycle].

 

MG: How frequently do you plan to refresh the data?  When is the next survey set for release?

 

With the rapid change in the “green” marketplace, we know that much is changing – and fast.  For that reason, we refresh the data twice a year, collecting 30,000 responses each spring and an additional 30,000 each fall.  Our Spring 2008 data collection ended the first week in June, and we’ll be releasing data to our clients in August. 

 

MG: You’ve indicated that a key concept behind how you designed your Eco-Insights survey is that the results be “actionable.”  What do you have in place to make that happen? 

 

AH: Several things.  As of right now, companies can use our data and services for:

 

Brand / Marketing Strategy.  E.g., Build a deep profile of the eco-friendly/health consumer or understand how consumers define green within specific categories.

 

Product Development.  E.g., Understand attitudes that drive their purchase motivations and barriers by category or identify consumer-based related categories for portfolio expansion of a brand.

 

Category Management / Sales.  E.g., Prioritize retail customers/prospects based on the category opportunity for products, and alignment of product and retailer customers.  Support retail-level sales pitches and category management efforts with consumer-based attitudinal insights [in addition to transactional data].  Utilize data at a store trading area level to maximize ROI for in-store programs, promotion, distribution and merchandising initiatives

 

Marketing.  E.g., Maximize ROI of marketing efforts with clear profiles of how to reach the target consumer.  From online and offline media habit profiles, to scoring a geographical area’s propensity based on desired criteria, the data can assist efforts ranging from media planning to database marketing

 

Consumer Insights. E.g., Allow clients to get more from their consumer insights research budgets as we can use the responses from the Eco-Insights survey as a highly sophisticated screener to re-contact respondents for proprietary custom studies

 

Corporate Social Responsibility. E.g., Rate eco-friendliness of both the company and its products including ‘Likelihood to Recommend’ and ‘Likelihood to Invest’.

 

MG: How can CPGs and retailers use the data to target consumers interested in green products?  How granular can you go?  For example, can you target at the zip code level? How about by product or product category? 

 

At a retail level, these data are extremely actionable.  We capture consumers’ primary and secondary shopping chains which allow us to know what product categories people buy and where they are most likely to shop (and we can do cross-outlet analysis). 

 

We have also asked if they were a customer of other retail chains (e.g., Home Depot, Lowes, Macy’s, Best Buy).  So although we don’t have as specific information for these other outlets we can do, at minimum, analysis by these outlets.  The link between category and outlet profile is very unique and actionable.

 

As for granularity, earthsense has partnered with Pitney Bowes MapInfo to project market potential at very low levels of geography including census block groups, tracts, and trade areas, and yes, ZIP Codes.  Using the PSYTE Segmentation system, retailers can purchase mailing lists based on households living in specific neighborhood types with the highest proclivity to go green.  It’s a soup-to -nuts solution.

 

Earthsense provides category level data, not brand-specific observations.  One of the biggest benefits earthsense subscribers have is the ability to drill down further into the data using our Reconnect Service.  So, say you are a manufacturer of frozen foods.  You can learn quite a lot about consumers who buy this category from our main Eco-Insights survey. 

 

But if you wanted to learn more about the types of frozen foods consumers buy and which brands they favor, you can create a customized survey whose results are appended back to the syndicated survey.  This will give you the freedom to concentrate on just the details you need.

 

MG: Do you have attitudinal and psychographic data that can inform messaging by geography?

 

In addition to partnering with Pitney Bowes MapInfo, we have also formed a relationship with Mediamark Research & Intelligence (MRI).  We’re working this summer to link our databases so that subscribers of both surveys will have unprecedented detail on consumers.  And since MRI is PSYTE-encoded, all of these data are geographically actionable!

 

MG: How do local influencers (exographics) impact attitudes on green?  Do you think these influencers impact attitudes toward green or conversely, attitudes toward exographic considerations?

 

Good question!  There’s a lot of data to sift through and a lot to learn.  While we are not looking for or trying to document causal relationships, we are finding patterns where several factors coexist.  A marketer’s job is to maximize return on investment.  And, we help accomplish that goal by pinpointing those areas where the patterns are the strongest.  

 

Clearly, a person could wish to buy only organic food, ride a bicycle to work, and recycle everything  But, factors such as the proximity to a store or farmer’s market with a good selection, the distance to a workplace, weather conditions and local waste management facilities can prevent or discourage even the most ardent “green” consumer.

 

With an economy that is sputtering, gas prices that are soaring, and issues surrounding safety in our food supply – consumers are weighing multiple factors before they put their put their money down on even the basics.  Earthsense helps manufacturers and marketers by taking a common sense approach to understanding the motivations and barriers that directly affect the purchase of products – particularly those with environmental, health or wellness features.

Making What’s Inconvenient Matter

An Interview with Matt Williams, EVP/Partner at The Martin Agency and Planning Director for the “We Can Solve It” Campaign

While many consider the release of Al Gore’s An Inconvenient Truth to be a turning point regarding consumer awareness about climate change, consumer surveys indicate that much work is still left to be done.

In fact, six months after the movie’s release, an ACNielsen online consumer survey found that North Americans were the least aware of and concerned about global warming of all respondents from the 46 markets surveyed.

Moreover, North Americans were only half as likely as South Americans (Argentina, Brazil and Chile) – those surveyed that were most aware and concerned – to believe that climate change was “a direct result of human actions”.

This month, however, there is reason to hope. Al Gore’s Alliance for Climate Protection is back with an ambitious 3-year, $300MM campaign to raise awareness of – and to influence behavior regarding – global warming.

Recently, Marketing Green spent some time with Matt Williams, EVP/Partner at The Martin Agency. Today, The Martin Agency serves as the lead agency for the Alliance and is in charge of the campaign’s brand strategy, among other roles.

Willams serves as the Planning Director on this campaign. As such, his role is to uncover insights that will motivate consumer changes in attitudes and behaviors. In many ways this is a daunting challenge for a marketer, given the enormity of the task at hand as well as its importance to the overall effort to solve global warming. Here are his words:

MG: In launching this campaign, what was the Alliance’s primary objective.

MW: The Alliance’s WE campaign is designed to bring public opinion past the tipping point, and compel our elected leaders to take action on climate change. We only have a short window to act, and what we need is a massive, sustained effort to mobilize millions of people – that’s what this effort is all about.

MG: Describe some of challenges that you faced in tackling an issue as daunting as climate change.

MW: Climate change is a huge challenge, and the vast majority of people realize the urgency and enormity of the threat. But, human nature being what it is, a challenge this large can be almost paralyzing.

We had to break through the assumption that the climate crisis is too big for a regular person to tackle. We had to tell people that, yes, this is an urgent challenge, but like other massive challenges, if we put our differences aside and band together to solve it, we can do it. Adding elements of optimism and solvability to the urgency of solving the climate crisis was the key challenge of the campaign.

MG: Is it realistic to expect a marketing campaign to have a significant impact on attitudes and behaviors regarding climate change?

 

MW: The advertising is just one piece of the Alliance’s 3-year effort – and it’s a multimillion dollar, national ad campaign, stretching from coast to coast in every type of media.

 

The Alliance has also launched a program of online engagement and activation, providing opportunities for citizens get and stay involved; and is partnering with organizations that will work across the political spectrum to reach people in their day-to-day lives.

As these efforts work together and build momentum over the life of the campaign, we expect to mobilize millions of people for solutions to climate change.

MG: What is your campaign idea? What were some of the consumer insights from which it was derived?

 

MW: We know consumers are frustrated with partisan bickering. We know the vast majority of Americans accept the reality of the climate crisis and want to engage in solving it, but they don’t know how to get involved.

And we know that consumers view the climate crisis as too large and urgent a challenge to be held hostage by political gridlock. The campaign idea is that we have to set aside our differences and come together to solve the climate crisis. If we don’t come together, the problem won’t be solved—it’s too big.

But if we come together, we can speak with a unified voice to demand solutions. The campaign and the WE idea are designed to create a motivating sense of energy and optimism and to invite everyone to participate in solving climate change.

MG: What are the key elements of the campaign? Overall, how are inpidual tactics integrated across channels? Conversely, inpidually, how were each tactic tailored for each channel?

MW: In terms of the ads themselves, we’re combining television – because of its reach to the broad audience we’re trying to speak to – with print, in issue-specific publications aimed at key groups, and online ads that can be carefully targeted as well.

Every ad, in mass media or online, drives traffic to http://www.wecansolveit.org, the Alliance website. At the site, consumers can find a wide variety of information about the climate crisis and ways to get involved—from petitions to government leaders to local events. They’ll also have the chance to join the Alliance by giving us their e-mail address. So this is more than ad campaign—it’s an integrated effort to engage consumers, and turn that engagement into real action.

MG: How will you drive viral marketing? What is the role for social media? How do you build grassroots support for action?

MW: The online and grassroots components of the campaign will provide opportunities for inpiduals to get and stay involved in ways that make sense for them. Our cutting-edge online organizing and activation, built around the website, will give people a spectrum of activities to keep them engaged on the issue, from taking action in their personal lives to working in their schools and communities to joining calls for government action on all levels.

 

We’re also using the “network effect” – getting the word out through ready-to-use content (like embeddable videos) and social media that enable communities and inpiduals to engage on the issue, spread the word and become local champions.

 

The Alliance has created partnerships with local and national groups to get the word out on the grassroots level, so consumers not only see the WE brand in media outlets and online, they feel it through other groups and activities that are important in their lives.

 

We’re also looking at ways for consumers to use elements of our campaign to create their own WE content, to help build viral momentum and actively involve consumers in creating the WE brand with us.

MG: How involved has Al Gore been in the planning of this campaign?

 

MW: Vice President Gore has been an integral part of the WE Campaign’s development from start to finish. The Alliance and the We campaign are built on the idea that the climate crisis is urgent and solvable, and VP Gore’s goal is to ensure that we get the word out as effectively as possible.

MG: How did you incorporate innovative approaches in this campaign? What are they and how did they impact the consumer experience in a novel way?

 

MW: The entire campaign is rooted in a brand idea that will unify every effort, in mass media, online and grassroots. The idea of bringing Unlikely Alliances like Newt Gingrich/Nancy Pelosi and Pat Robertson/Al Sharpton together is an attention-getting way to make our point about coming together to solve the crisis.

That theme will continue in the future and in other parts of the campaign, and has great potential for interesting and involving messages in every medium.

We’ll also use the couch from the TV, print and online ads as an icon for coming together.

The creation of the WE mark gives us a symbol that people everywhere can use to display their commitment to solutions. WE can become part of people’s lives beyond the campaign.

Also, our focus on Influencers as a media target is designed to communicate our message to people who start conversations. When millions of Influencers engage their network members and policymakers in a discussion about solutions to the climate crisis, the conversation will take on even greater momentum.

It’s an amazing privilege for us to be involved with the Alliance in helping address this incredibly important challenge.

Shopping for Green Online

An Interview with thepurplebook Founder Hillary Mendelsohn

With the exception of a few select product categories, growing consumer interest in green has not yet translated into substantive changes in purchase behavior by mainstream consumers.  Like many nascent categories, green faces many barriers to widespread adoption. 

In many ways, product adoption in the green space is a classic chicken and an egg problem: uncertain demand leads manufactures to limit the number of products they launch.  Limited products and product choice, in turn, curtails demand.  However, this only tells half the story as there are many reasons why demand is limited. 

Even with those receptive to a green message, marketers are challenged by low familiarity with green products.  This, in turn, hampers consumers from effectively navigating the category as well as making informed purchase decisions.   

Where do consumers turn for credible information today?  Product companies?  Not necessarily, as consumers are increasingly skeptical about green marketing claims.  Fellow consumers?  Uncertain, as their peers are likely to have equally limited experience with green products.  

Can consumers rely on standards?   Perhaps.  Standards have been adopted in certain categories and many more are on the way.  Yet, rollout of new standards takes time; familiarity with what existing ones mean (i.e., how green is green?) is still limited.    

Instead, consumers today may turn to credible third party sources for guidance.  One such source is the recently launched thepurplebook green, a complete guide to green shopping online.  With an extended following already, thepurplebook series enters the green market with significant brand awareness…and credibility as a reliable source for online shopping information.  Indeed, just weeks after launch, thepurplebook green is planning a second printing.

Recently, I had the opportunity to speak with thepurplebook Founder Hillary Mendelsohn.  We discussed growing consumer interest in the environment, the role that purchases play for consumers to express their convictions on green and the role that thepurplebook green plays in facilitating green purchases.  Here is what she had to say: 

MG: Does consumer concern for the environment translate into increased purchase of green products? 

HM: Purchasing power holds two powerful acts for the consumer.  First, purchasing green allows the consumer to feel better about his/her choices and particularly for personal care products, food and household items there are positive health-oriented reasons  to make such purchases.   

Second, other than voting, this is the consumer’s strongest voice to the corporations at large.  Purchasing green holds corporate America more accountable for creating green options, and ultimately having greener practices internally. 

For both of these reasons, the ‘voice’ that purchasing green gives the consumer has and will continue to increase the sales volume of green products. 

MG: What types of green products do consumers purchase?   

HM: Consumers are purchasing based on their lifestyles.  Young families are focused on greener/healthier cleaning, food and personal care items.  Older consumers are building or remodeling green.  The overall theme is that people are beginning to care about shopping more responsibly and are looking for ways to make better choices.   

It is the job of thepurplebook green and those of us that care about this concern to point them in the right direction. 

MG: Are consumers purchasing green products or brown products that are now greener? 

HM: The answer is both.  But the victory lies in the fact that they are making the effort to make better choices.  We must educate, create standards and make sure products do not lack in quality, style or cost too much.  If we can show consumers that they do not have to compromise on quality, taste or price, we can have everyone purchasing green. 

MG: What was the origin of the book?  Did it evolve out of a passion for green or a business opportunity similar to your other books or a little of both? 

HM: I knew very little about being green prior to starting this book.  I was happily writing online shopping guides when one evening, a friend invited me to see a screening of An Inconvenient Truth.  I sat in the darkened theater thinking about how I had contributed to this huge problem, and the legacy my children will inherit.   

Then I thought, if I were to become part of the solution instead, what would that look like?  Being an online shopping expert, I went to the web to see what I could find as far as earth-friendly fare was concerned.  It was slim pickings and hard to find anything at all. 

I thought, if I apply my skill set and focus exclusively on green product, I will educate myself, and create a book that might help make being green easier for others.  That said, I am a business professional, and what I have discovered, is that green makes sense and makes money – they are not mutually exclusive.   

I do hope this book is wildly successful, as that will mean people are adopting change and I have done my part. 

MG: Who is your target audience?  What beliefs do they hold about the environment?  What are their demographics?  Are they consistent with their behavior? 

HM: The beauty of this book is that it is meant for the eco-neophyte as well as the eco-savvy.  There is education and information for those who want to learn more and great resources for those who already know why they are making  better choices but can’t find the product.  There isn’t a demographic, but rather those wanting a greener lifestyle.   

The idea isn’t to exclude anyone, but to include everyone open to making greener choices whether it is their first or someone who lives dedicated to the greenest lifestyle possible.  This is doable for everyone.  The more we encourage choice and change, the more people will adopt greener lifestyle habits. 

Consistency lies within the consumer having good experiences with green products.  Once they have found good products, they do stick with them. 

MG: How should merchants approach you for inclusion in the book?  What is the criteria for inclusion? 

HM: Any merchants who wish to be considered for inclusion in thepurplebook Green, can log on to www.thepurplebook.com and submit their site for inclusion.   

Our criteria includes the following:  You must be able to complete the transaction online using a secure server, the site must be reasonable to navigate, customer service policies must be clearly stated and fair and a phone number is required for all sites. 

MG: How do you determine how green a company is?  Do you use a ratings system?  

HM: We have familiarized ourselves with all of the certifications currently used and have tried to glean a working knowledge of what is and isn’t green.   If we have questions, we contact the site and we do our very best to deliver consistent, quality information to our consumers. 

If we question it, or a site is not completely green but has a substantial green offering, we let the consumer know that too.  We are all trying to just to do better than we were yesterday, and need to keep that in mind and not judge too harshly. 

This is a relatively new area and we all have much to learn.  No one knows it all – yet.  All of the sites listed in the book are exceptional or they would not be there; however, we do make a special acknowledgement for those sites that also package and ship green.

Greening Consumption

An Interview with Michel Gelobter, Founder and EVP of Cooler

Long-time environmental activist Paul Hawkins once described “green consumerism” as an oxymoron.  Indeed, “green consumption” makes Wikipedia’s “List of Genuine Oxymora”.   The reason: consumption by its very nature has an impact on the environment – to some degree or another – and therefore, is hard to call truly green.

 

Yet, short of reducing consumption, many consumers, manufacturers and retailers are focusing on greener consumption – a term which implies shifting to products and services that have a lower environmental impact, though in many cases, not specifying by how much.

 

Today, there are positive signs that demand for greener products is increasing sharply.  In fact, the Natural Marketing Institute reports that the $200+ billion Lifestyles of Health and Sustainability (LOHAS) market is expected to double by 2010 and quadruple by 2015.  

There are many online retailers and content sites that offer green products directly or simply help consumers navigate the market.  They include three primary categories:

Green online retailers: Many online retailers have emerged that are dedicated to serving the green market including Buy Green, Earth Friendly Goods, Eco Choices, EcoWise, Gaiam, Green Feet, Green Home, Green Shop (UK), Green Shopper, Green Shopping (UK), Green Store, Indigenous, Natural Collection (UK), Nigel’s Eco Store (UK), Rogue Natural Living, Shop Green (PriceGrabber), The Green Office and VivaTerra among others.

General online retailers. Several general merchandisers and portals have embedded a green section into their existing offering, including Amazon and MSN among others.

Green directories: Finally, other online sites have positioned themselves as green directories, product search engines and shopping guides.  Sites include EcoBusinessLink, EcoMall, EcoSeek, Evolvist, Evolve Shopping, Green Deals Daily, Great Green Goods (blog), Green People, Green Providers Directory (UK), Green Shopping Guide (UK), Guide Me Green (UK), Haute*Nature (blog) National Green Pages, Pristine Planet, and TheFindGreen among others.  Perhaps the most comprehensive guide to online eco-friendly shopping is published by thepurplebook. 

Yet, despite this growth rate, LOHAS spending is still a drop in the budget when it comes to US consumer buying power – estimated at more that $10 trillion in 2007.  As such, the greater challenge is to shift spending on mainstream products to greener ones and do so in a way that also provides the incentive for mainstream manufacturers to reduce the carbon footprint of their products over time.

There are many ways to motivate the purchase of greener products across the purchase funnel.  Here are a few examples:

Make existing products greener.  Product companies have the opportunity to green their products – including sourcing, use and disposal.  Greening a product in the first place, of course, is the best way to reduce its environmental footprint.  Companies are motivated to do so for a variety of reasons including increased consumer demand, pressure from partners across the supply chain and risk to the brand simply by being complacent.

One of the best examples is Wal-Mart.  For example, it has identified $10 billion in potential savings simply by decreasing product packaging.  It has also required its suppliers to reduce the environmental impact of the products that it sells (eg, more concentrated laundry detergent formulas reduce the use of energy for transportation) while expanding the market for others (eg, by selling fluorescent bulbs at lower cost under its own private label). 

Due perhaps, in part, to Wal-Mart’s pressure and lead, Procter & Gamble has responded with a commitment to sell $20 billion worth of greener products over the next five years.  It has also joined the Supply Chain Leadership Coalition, an industry organization that pressures suppliers to publish information on carbon emissions, to help it reduce the impact of its suppliers as well.

 

Motivate greener choices.  Product companies and retailers can influence behavior by interjecting green as a considered attribute in the purchase decision.  There are several ways to do so including the use of eco-labels, ratings, promotional benefits or green rewards tied to a loyalty program.  Eco-labels and ratings impact consumer purchase decisions by providing relevant environmental information at the point of sale – and indirectly motivate greener product design and manufacturing decisions by making green a differentiating attribute. 

 

Today, eco-labels are actively being used or under consideration by manufacturers, (eg, HP, Dell), retailer (eg, Wal-Mart, Home Depot) and government regulators.   Moreover, several organizations have taken the lead in developing or aggregating green rating systems including Green Seal, Consumer Report’s Green Choices, the US EPA’s Energy Star and independent Better World Shopper.  Moreover, sites like Alonovo allow users to filter products based on their own green values.

 

Promotional benefits and rewards can also influence consumer purchase behavior.  Marketing Green explores both of these levers in two previous blog entries. (“Green Labels as Drivers of Consumption and Loyalty Programs”, March 19, 2007; “Testing Green Promotional Benefits to Drive Acquisition”, September 16, 2007).

 

Offset environment impact.  Today, more and more companies and consumers are turning to carbon offsets (and renewable energy credits or RECs) to mitigate the environmental impact of products manufactured or purchased.  While the offset mechanism may vary – from purchasing allowances on a carbon exchange to investing in renewable energy projects – the effect is similar: offsets reduce the carbon impact of consumption by effectively removing the equivalent amount from the environment elsewhere. 

 

While carbon offsets are not without controversy, they can be a powerful way to mitigate the impact of consumption.  There are several ways that carbon offsets are purchased today:

 

First, carbon offsets can be voluntary.  Retailers can provide options to do so – as most airline sites do today, for example – or consumers can purchase them directly from many brokers including Atmosfair (Germany) Better World Club, Carbon Fund, Carbon Leaf (UK), Carbon Zero (Canada), Climate Care, Climate Counter, Climate Friendly, ClimatMundi, CO2 Balance, My Climate, Native Energy, Offset Carbon Company (UK), Offsetters (Canada), Solar Electric Light Fund, Sustainable Travel International, Target Neutral (UK), Terrapass, The Carbon Neutral Company, TreeBanking, and Uniglobe Travel among others. 

Typically, retailers play no more than a passive role in facilitating carbon offset purchases by providing the mechanism to do so on their site.  In many cases, it is no more than an additional option available during the check-out process.  The case of Virgin Atlantic is different, however; in response to low voluntary purchases, Virgin is now actively selling carbon offsets to customers while in-flight.  Sunvil Holidays (UK) goes one step further by putting the burden on the consumer to opt-out of – rather than opt-in to – purchasing a carbon offset by embedding it directly into the cost of its vacation packages. 

Second, carbon offsets can be structured into the transaction itself – treated as a promotional expense, embedded in the purchase price or covered as part of the transaction fee.  Companies as diverse as insurance giant Allstate, UK’s Silver Jet and Fiji Water are making their products carbon natural (or even carbon negative) as a way to differentiate their offering.  In this case the product company is absorbing the cost directly or raising its price to cover the added expense. (Interestingly, Allstate is offering to offset the carbon emissions from the automobiles that it insures).

 

Alternatively, credit card transaction fees can be used to offset carbon emissions as well.  Recently, issuers including Barclays, GE, MetaBank, Triodos Bank and Wells Fargo have launched green cards while Bank of America and upstart Brighter Planet have announced their intentions to do so.  These cards divert a portion of their fees to mitigate the impact of the products purchased through a donation to a non-profit organization or direct purchase of carbon offsets. 

 

Such card programs have advantages and disadvantages.  Given their reach, credit cards can green a significant amount of consumer spending simply by providing the incentive to consumers to make their purchases on a card with green benefits.  Yet, to do so, cardholders must trade in personal benefits earned from traditional reward programs (eg, airline miles) for ones that provide more societal benefits.

 

Alternatively, a promising, new retail model has emerged that divert a portion of revenues earned through affiliate marketing programs to pay to offset the carbon from products purchased.  In doing so, sites such as Cooler and Earth Moment enable consumers to purchase products from traditional retailers while offsetting the carbon impact of these purchase in the process.  Such a model is compelling to consumers as, from their perspective, the cost of the carbon offset is absorbed by the retailer and they can green their purchases while using their existing credit cards. 

 

While numerous companies are involved in carbon offsetting, Cooler has clearly been one of the most innovative players in the space.  Distributing 8 million products from 400 retailers, Cooler provides consumers with the largest selection of products that can be purchased with an embedded carbon offset.

 

Recently, I had the opportunity of sitting down with Michel Gelobter, Founder and Executive Vice-President at Cooler.  We discussed the recent launch of his company, its B2B and B2C offerings and the challenges that we all face in greening consumption.  Here are his words:

Marketing Green:  By offsetting the carbon impact of products purchased, Climate Cooler has the potential to change the game in the online retail space.  What was the impetus for starting the company? 

Cooler:  We wanted to find ways to create the momentum in the consumer space for taking action on climate change.  That exploration led to what has now become Cooler.  Cooler is distinguished by being the first site where you can purchase practically anything you can buy on the Internet – except for maybe a plane ticket – in a way that eliminates the global warming impact through the point of sale.   

Our mission as a company is to connect every purchase with a solution for global warming.  We do that with three offerings.  The first is that we use the country’s only product and service carbon calculator that was developed jointly by Carnegie Mellon and Berkeley.   

MG: Does it calculate the entire impact of the product, that is, how it is manufactured, used and disposed of? 

C: It is just to the point of sale: how it is manufactured and transported.  But, the innovative piece is that it adds the retail component which ranges usually from 20-30% of a product’s carbon footprint. 

MG: How about shipping? 

C: Yeah, it includes that too.  But [the environmental impact] tends to be much lower which can be a surprise to our customer base. 

The second piece of this offering is our basket of carbon offsets or pollution prevention and renewable investments that have been unanimously approved by the world’s best environmental organizations.  And finally, we set out to create a basis on which consumers could take action in a way that was trusted and transparent.  And that is what Cooler is about.   

We also give people a way to track their impact and start thinking about carbon budgeting.  We already have the My Impact page which tells [consumers] what they are emitting.  After all, 40% of the average American’s carbon footprint is in consumption of goods and services.  

MG: So do you view part of the value that you bring is educating consumers on their true environmental impact? 

C: In the consumer space, absolutely.   

The bigger piece of the business is really the B2B offering.  Companies started coming to us and saying: “How can I put your works into my gears so when people come to my website – or bricks and mortar store – they can get a carbon neutral product.”

Our B2B offering is called Cooler Compete which is basically a way for companies to know, offset and reduce the global warming impact of the products that they sell.  And the difference is that those companies are going to make a choice about who pays for [the offset].  We think that most of our business customers are going to absorb the costs of carbon neutrality. 

MG: What services are you providing in the B2B space? 

C: First, we are providing the [carbon emission] calculation.  Our calculator is really revolutionary.  We are using a method that is, on average, more accurate [than existing calculators].  It is based on an approach called economic input/output analysis, whereby we calculate the footprint of a product directly through the economy.  Instead of looking at a shoe and saying “where did that leather come from?”, we say “how much of the leather industry did this company use?”.   

Peer-reviewed studies show that this method is, on average, more [inclusive] from an environmental perspective because it includes more of the carbon footprint than [other] analysis. 

The second service is really a reduction service, that is, a list of the top contributors to your carbon impact.  That is usually enough to motivate companies to bench mark against those numbers and reduce their impact.  

Finally, companies buy offsets with us.  We don’t actually make any profit from our offsets – we pass the costs directly through.  But our basket of offsets is very high quality.  

MG: You are ambitious in trying to serve two different audiences with very distinct offerings. 

C: Yes, but the website in some sense can be seen as a technology showcase.  The web site gives [companies] the sense like “Oh, this is what it could look like.”  So that is why the website is really critical.   

MG: In your B2C work, who is the typical customer that you are targeting? 

C: We are partnering with environmental organizations so our early go-to-market strategy is [targeting] the members of our partner organizations.  Now we are trying to move from the environmental group members to more of the LOHAS crowd.  Over time, we will target a broader and broader swath of the American public as more people become conscious of this issue. 

MG: How important is viral to your marketing strategy?

C: Viral would be great.  Right now, we are honing our technology platform to make that more potent.  For example, when you tell a friend, we are able to report back to you how much your friends offset.  We can also have people compete to see who is more carbon neutral.   

MG: How does the B2C business model work?  Is it an affiliate model? 

C: It is.  On average, if we refer someone [to an online retailer that subsequently makes a purchase], we get 6% [of the total sale].  The cost of the [carbon] offset ranges from 0.7 to 1.5% and we keep the rest for the business. 

MG: Are there plans to offset carbon emissions from the use and disposal of the products that you sell? CC: We do not have any plans to address that now. MG: How receptive are consumers today to carbon offsets? 

C:  I think we are easily 10 to 20 years out from having a stable, trustworthy, well-defined commodity market for offsets.  One of the reasons we partnered with the environmental groups is to give consumers assurances that at any moment in time, the best decisions are being made.  

MG: Do you think offsets take on more meaning when the US market moves from a voluntary to a mandated cap and trade system? 

C: No. I think personally that people need to take action now.  Our offsets are additional so they are already above and beyond everything done today.  We follow three criteria that are summarized as follows: real, additional and positive. 

“Real” means that we are taking carbon out of the atmosphere when you buy something.  We are not just meeting the next increment of energy demand with cleaner energy.  We’re actually capturing or reducing an emission somewhere else in the world, hopefully in the United States.   

“Additional” means that this would not have happened where it not for your purchase.   And “positive” means doing more for the world than just helping the climate.  It means helping to create jobs or generate more environmental protection or biodiversity. 

It is going to be a long time before governments are actually cutting emissions by 80%; by 2050, unfortunately.  Until that time and maybe well beyond it, we want to be the place where consumers can know that by acting their doing their part above and beyond what government is doing.  

MG: It is conceivable that your success could provide incentive for others to enter the market and that one day, offsets will simply be a threshold to compete? 

C: Of course, we would love it as a company and a social event if this became a must have.  And we are going to do our best to make sure that happens.  That is one of the reasons why we started the company. 

MG: Will this actually help solve global warming? 

C: I absolutely think it’s a huge part of the solution.  We can not be paralyzed by the fact that shopping and consumption is part of the problem.  We have to go in and fix it.  People have been trading goods for money for a long time and the system’s broken.  And climate change is actually a huge archetype for a wide range of ways to reknit the fabric of shopping with the fabric of community and earth care.

Shaping Attitudes on Green

An interview with Brett Jenks, CEO, Rare Conservation 

Large mammals the like polar bear have a special place in our hearts and our imagination.  They make cute stuffed animals for our kids and capture our fascination when we see them at our zoos.  Today, however, the ice caps are melting and the polar bears are drowning because the ice is thinning.  It is a visible sign that our climate is changing for the worse, and makes for a macabre story.

One question to ask is whether some good can come out of this sad tale.  Will shocking images change people’s attitudes towards the environment?  Will the polar bear become a rallying cry for action on global warming?  Can a drowning polar bear save us all?

For those not already receptive to a green message, attitude change is a prerequisite to influencing purchase behavior.  Changing attitudes – whether it be toward the environment or any another issue – can be a tall order, however.  As a result, most for-profit companies shy away for this challenge for a simple economic reason: it is more effective and efficient to target consumers already receptive to the message than to invest in consumers who aren’t. 

For those that do, including both for-profit and non-profit organizations, changing attitudes presents a formidable challenge.   

Academics have long pursued conceptual models that explain the process by which consumer attitudes are formed, shaped and influenced through external stimuli.  One such model was proposed by Petty and Cacioppo.  This Elaboration Likelihood Model (ELM) of persuasion provides conceptual framework based on “two routes of persuasive influence”: 

Central route of persuasion: While the central route is the most effective way to change and sustain attitudes over time, it requires a high degree of thought or consideration by the consumer for it to be effective.  This route requires consumers to digest the message, process the implications of the message and alter their attitude as a result.   

This route requires two conditions be met in order to successfully influencing attitudinal change.  First, a person must be motivated by the stimuli to change.  Said a different way, a person must have a “strong desire to process the message” because they can relate to it in a meaningful way.  Second, the person must have the cognitive ability to understand what the stimuli means in order to “accept” it if viewed favorably, or “reject” it otherwise.  Attitude changes achieved through a core route can be sustained by consumers because they have a vested interest to do so over time. 

Peripheral route of persuasion: The peripheral route stimulates attitude change when those being influenced have limited motivation and/or capability to engage with the message.  The peripheral route influences attitudes by leveraging the affinity for a cause or celebrity, for example.  People see Leonardo DiCaprio driving a Prius and change their driving habits to be more like him simply because they get a personal reward from doing so. 

Not surprisingly, attitudes formed through the central route are more enduring and more predictive of future behavior than those shaped through the peripheral route.  In contrast, attitude change through the peripheral route tends to be temporary in nature, requiring continual reinforcement by stimuli to maintain the change over time. 

Non-profits such as Rare Conservation (RC) and the Environmental Media Association (EMA) put persuasion models like ELM into practice in order to influence and shape consumer attitudes towards green.  What is interesting is how different their approaches to attitudinal change are between these environmental organizations, pursuing different routes of persuasion to effect change. 

Rare Conservation is an organization that conducts grassroots PRIDE campaigns in under developed nations to motivate local communities to conserve their resources.  RC focuses on changing attitudes primarily through a core route of persuasion, convincing locals that the long-term welfare of the community is tied to the sustainable use of its natural resources.  Locals tend to be receptive to the message given that their livelihood is tie to sustainable resource use.  As a result, RARE has been successful in driving change in these remote parts of the world.  

Critical to Rare’s success is the adoption and use of a local animal as a symbol of the campaign and its objectives.  The animal chosen tends to be held in high regard by the local community, and perhaps endangered by current unsustainable practices.  The animal serves not only as a rallying cry for action but also something that the community can take pride in as a symbol of a community’s heritage and what’s at stake while trying to preserve it. 

In contrast to RC, EMA pursues attitude change through association with celebrities (like DiCaprio driving the Prius).  By taking a peripheral route, EMA is leveraging star power to draw attention to its cause, while shaping consumer attitudes by associating a celebrity with a green brand.  “If Leonardo thinks being green it is cool, it must be so” goes the logic. 

In our media and advertising saturated world, celebrity endorsement can shape consumer attitudes, at least through the peripheral route of persuasion.  Yet, is this endorsement enough to sustain attitude change over time?  Based on the work by Petty and Cacioppo, it is unlikely that celebrity power alone will sustain changes in consumer attitudes over time, at least without continuous stimuli to remind consumers about this association. 

So, can RC’s PRIDE model be adapted by more industrialized markets like the US in order to sustain attitude change over time?  Can a polar bear – alive or drowned – be our PRIDE campaign symbol, our rallying cry for action on global warming or just a macabre reminder of its catastrophic consequences?   

I asked that question to Brett Jenks, CEO of Rare Conservation. We talked about customer attitudes toward green, Rare Conservation’s PRIDE campaigns that try to shape attitudes in remote areas of less developed countries, and the challenges of applying this model to a more developed world.  Here are his words. 

MG: How do you mobilize communities to conserve the local environment? 

BJ: We train local conservation leaders in some of the world’s remote and biologically rich places to use the power of communications and social marketing to move people to protect or sustainable use those resources.

 

This is an approach to conservation that says that if we are going to ensure the survival of some of the world’s most importance sources of fish and oxygen and timber, then we have to ensure that the people that inhabit those places are equally committed to that charge.  By doing so, we are building local constituencies for the environment all over the world. 

MG: You have been successful in doing just that in 40 countries.  How do you go about establishing a new program? 

BJ: We call it a PRIDE campaign.  This campaign is a locally managed, grassroots, social marketing program which begins with naming the problem and identifying who are actually using or destroying the resource and who are the influencers of change. 

 

We identify a threat to the environment using state of the art threat identification analysis.  Then, we use a participatory planning method that engages a lot of stakeholders in a community and walks them through that threat analysis to build a commitment to making a change and reduce the threat. 

 

The campaign manager identifies people who are actually creating this problem – who are the farmers who are lighting this prescribed burns that are growing out of control, who are the fisherman that are actually using the dynamite to blow up the reef that get a short term catch but destroying the long term sustainability of the reef.

 

Once you have identify those people, you have to figure out whether you can communicate with them directly [upfront] or at the end of the process which begins by making everyone else aware of the problem.  

 

[Program managers] come up with their theory for change.  For example, if we build public awareness and we can generate an attitude towards conservation, then we will be able to change the behavior of our target audience.

 

It’s the same way Coca-Cola would say, “Let’s move into a new country”.  Let’s make sure everybody is aware of the product, is interested in it and has the opportunity to try it. Then, maintain their allegiance to the brand over time.  We are doing the same thing with conservation.

 

MG:  It seems like you are taking two different approaches potentially. One is directly intervening with the individual causing the issue to begin with, and they other is to start higher up in the purchase funnel by first building awareness of the problem.  Is this the case? 

 

BJ: In a way we are doing both because we believe that there is no single threat to these resources.

MG: Are you actively working on climate change as an issue or are you primarily focused on conservations of lands and fisheries? 

BJ: That is what is interesting about it.  Potentially, 20% of global emissions come from deforestation, most of that is in tropical countries.  When we work on protection of a biosphere- a major tract of forest – [we] are really working on climate change.

MG: Is climate change the marketing message that would resonate in these more remote markets, or do you need to focus more in the here and now – the endangered forest and the fisheries of the local communities? 

BJ: It depends on the place and the people.  Human beings are complex and there are so many different ways to motivate people.  For example, the threat of loss is a very important motivator.  I just read a report that the given two propositions that are exactly the same: you can have $5 or remove all the risk of losing $5.  Humans will focus on what they are going to lose and try to avoid losing before they will focus on trying to gain. 

 

So the potential loss of the fishery to a local fisherman is a motivating force. The potential loss of clean water from the hillside is a motivating force.

 

But sometimes it is not enough.  And the thing that we assume is always going to be powerful is this sense of pride in homeland, in your particular place.

MG: How did Rare Conservation get started? 

BJ: This program got started in the late 1980’s when my vice president of programs, Paul Butlers, was working with the St. Lucia forestry department.  He was a young biologist who had moved from Great Britain to volunteer on this Caribbean island.  He realized that they were losing their national bird, the St. Lucian parrot.  They were down to only 100 left in the wild and the IDCN – the global association of non-profit environmental entities wrote a report that said that this species would not survive to the year 2000. 

 

And over the course of several years he used various marketing tactics that articulated this sense of pride. (He got the bird on the passport, on posters, billboards and bumper stickers.  There was a national song that every kid in every school knew.)  He ended up with sweeping legislations that reduced poaching of this national symbol.  Now there are 700 birds in the wild and it’s a viable population. 

MG: How does your model translate into more developed models? 

BJ: With some challenges.  We enjoy several advantages.  First, you get a huge benefit for your buck by investing your marketing dollars in the developing tropics.  Second, in most of the places that we are working are very remote.  

 

Let me just tell you one little story about guys like you that I took to Peru a few months ago.   One of the lead creative teams at Arnold Advertising had volunteered to work with me. 

 

I took them down to get the oriented and show them what we are doing with a PRIDE campaign in Peru.  We went to a very remote place called Oxapampa where there is a spectacled bear that lives in the incredibly rich ecosystem above these dairy farming communities. 

 

We are working in this region to help municipal leaders create new protected areas – to protect the watersheds and the biodiversity of the area.

 

Arnold flew in.  The first thing that they saw was a night at the town hall with the mayor and about 50 community leaders.  Our campaign manager presented the analysis that he had done about the market for conservation in the region.

 

So he says, “Here is where everyone gets their information. Tomorrow morning at 8am, 55% of the population of Oxapampa will be listening to this radio station.  And they will listen to it for the entire hour while everyone gets ready for school, have their coffee and head off to work or school.” 

 

He went on to describe what other information they get, who they trust, how many of them go to church.  In the room are the mayor and the three candidates to replace the mayor.  They are the only ones doing and kind of advertising, other than perhaps Coca-Cola.

 

As he is describing the market and what a campaign was going to look like, out the back of the room walks in this six-foot mascot of the spectacle bear. And he talks about how this bear was going to become the symbol of pride for Oxapampa.  And so this municipal meeting gets this electric air around it.  It may sound hokey but all of a sudden this thing comes into the room they now realize is their mascot, is the symbol of their region. 

 

Then a school group comes in and sings this new song – beautifully done, inspiring lyrics.  Parents are singing in a folkloric way the new anthem about their region.  In the back of the room, people can sign up to pledge their support for a protected area that will insure good water quality forever.

 

By the end of the meeting every one of the mayor candidates is taking their photo with the bear.  They are signing the pledge to create the protected area and they want us to send them the digital photos right away to use it as part of their platform.

 

It is literally that simple.

MG: It is sounds like in the US this type of message would get lost in the constant bombardment of advertising.  

BJ: And that’s the point.  So I said to Arnold, “Give me an image.  What would this look like if this were in the United States.”

MG: How about the images of a drowning polar bear as the mascot for a climate change campaign? 

BJ: I think the image would resonate with some.  But, it is not enough. 

 

In our case, it is the fact that we have religious leaders that are talking about protecting water every Sunday.  The radio disc jockeys are taking about it.  The dairy farmers are teaming up to petition the federal government because without water, their cows will not drink enough to produce milk.  It is about a whole movement; it is not about an ad campaign.  That is the difference.

MG: Sounds like these communities are so much more connected to the environment than we are.   Is that the case?  

BJ: Yes.  There is also greater cultural homogeneity.  So if you get the catholic priest [to promote the PRIDE message], you reach lots of people in the voice of and through the lens of those who are most influential.

MG: So, how would you approach a more developed market? 

BJ:  I do not believe that shock treatment works.  The drowning of the polar bear shocks you but does not make a link for people.  It does not lead people to a new kind of decision making.

 

The loss of the mega fauna – are negative images.  They do not lead you to a vision and aspiration.  They leave you with a big question and no sense of empowerment. 

 

Let’s find a more positive way to celebrate people making those first steps toward the purchase of hybrids, putting solar panels on their homes, making purchase decisions based on the lifecycle of the product and reputation and commitment of the company.  I think that is where we are going and will get there fairly quickly.

 

When people started taking dramatic measures during World War II, what were some of those images that highlighted that change?   Today, is it people buying compact fluorescents?  Or is it people thinking about putting laminates on their windows to reduce sunlight in the summer? 

MG: Are their images or icons that would resonate in the more crowded US media market? 

BJ: In our case [at RARE], we’ll have religious leaders – the icons of the local culture [endorse our message]. 

 

Who do people look up to in the US?  We certainly deify and vilify corporate CEOs.  I think a certain group of people [are influenced when they] see Wal-Mart going for certified seafood, and when Wal-Mart is talking about putting solar panels on top of everyone of its stores nationwide because it will save them money over time and therefore save their customers money. 

But, the stories that are most important may be those in a local newspaper about Bob and Jane who have decided to go green with their home – not because there are environmentalists – but because they are good flag saluting Americans who just want to do it better and make their contribution to America’s future.  

Sources: Petty and Cacioppo, “The Elaboration Likelihood Model of Persuasion,” Advances in Experimental Social Psychology, 1986; Jackson, Tim, “Motivating Sustainable Consumption,” a report to the Sustainable Development Research Network, 2005

Greening of Ad Networks

An interview with C.J. Kettler, Founder and CEO, LIME 

Green marketers are challenged to efficiently and effectively target consumers that are receptive to their message.  Green marketers are not alone in their quest: According to a Jupiter Research report regarding the European market, “targeting audiences better” is the primary challenge faced by more than two-thirds of advertisers when planning and buying online media.

Moreover, targeting green consumers presents an extra challenge for marketers, as green consumers (or simply, consumers receptive to green messages) may transcend demographic groups while demonstrating inconsistent purchase behavior within and across product categories. 

Many consumers do self-identify by searching under related terms or by landing on relevant green sites.  In order to expand advertising reach, however, marketers must find ways to either target consumers higher up in the purchase funnel in order to impact awareness or intercept those already receptive to the message lower in the funnel in order to impact consideration and purchase. 

Yet, the reality is that there is only a small, albeit growing, list of green sites where marketers can directly reach consumers today.  Of these sites, some cater to “committed greens”, while others reach those that are more “curious” – representing a larger, more mainstream audience today – than committed. 

Marketers and media planners trying to reach either the “committed” or the “curious” have a few options:  

Portals: Portals tend to provide broad access to mainstream consumers interested in general content.  Some portals have created green content areas on their portal – including Yahoo! Green, which provides users with green news, consumer tips and content related to environmental issues and activism, and MSN’s Live Earth, a microsite that will broadcast global concerts on July 7^th to build awareness about climate change.

Such green content allows portals to tag visitors with cookies that identify them as having a green affinity.  By doing so, portals such as Yahoo could then target these consumers with eco-friendly messages when they visit other pages on the portal, and perhaps charge a premium to advertisers in order to do so. 

Ad Networks.  Ad networks – including traditional players such as Advertising.com, ValueClick and 24/7 Real Media (recently acquired by WPP) – bundle and sell ads across a variety of publisher sites within their network.

 

Such networks typically offer either “run of network” or more “targeted” ad serving opportunities.  Run of network typically reaches a broader audience across a wider range of sites, while a more targeted buy enables more precision in terms of who, where and when the message is delivered.  While these sites offer access to mainstream consumers, they may have limited ways to identify green consumers (ie, specific sites in the network, content on a page).

Increasingly, green networks are being created to aggregate access to green sites.  Three networks exist today:   

GreenAds offers access to sites and blogs across five socially-conscious themes including “Sustainability and Environment” and “Green Business” (B2B).  Network sites include publishers Grist Magazine and E Magazine.com, as well as blogging site TreeHugger.  Advertisers can place ads on this green network on either a CPM or Cost per Click (CPC) basis.

BlogAds offers a “network” of 50+ environmentally friendly blogs under its “Environment and Sustainability” category. Ads can be purchased on individual blogs or across the network. Unlike on more traditional ad networks, BlogAds allows advertisers to purchase ads on individual sites for a flat fee that is set by each owner.  Blogs in the network include Inhabitat, Green Options and WorldChanging (as well as blogs like TreeHugger which is also listed with GreenAds as many of these deals are not exclusive).

New entrant LIME recently launched a green ad network that currently includes six sites: Mongabay, EcoGeek, EcoSherpa, TheBeautyBrains, SavvyVegetarian and Eco-Chick.  With a mix of green blogs and content sites, LIME’s ad network provides marketers the potential to purchase ads either on a CPM or run-of-network basis.  LIME – an umbrella brand that appeals to those interested in living a balanced lifestyle – has the potential to be a formidable player in this space: LIME has plans (and the backing of Steve Case’s Revolution Living) to scale its green network significantly over time. 

Recently, I had the opportunity to speak with C.J. Kettler, Founder and CEO of LIME.  We spoke about the growing consumer interest in a “green, healthy lifestyle”, the launch of LIME’s green ad network, and the evolution of LIME as a digital lifestyle vertical and media company.  Here is what she had to say:

 

MG: What was the impetus for LIME’s green ad network?  How did it evolve form your current offering?  Where would you like to see it go? 

CJK: From the get go, LIME was conceived as an umbrella brand.  We wanted to build a company at the intersection of Web 2.0 and media.  As an umbrella brand, we can be home to the grassroots and community that is building this green lifestyle, as well as provide content of our own and establish LIME as a brand. 

MG: Why is this the time to launch a green ad network?   

I think it is pretty clear.  We have been talking about a green, healthy lifestyle since we started this company two years ago.  People start to look at me inquisitively, tip their heads and say: “Yea, it does feel like this is happening now.”  I would say, literally, two weeks ago is when the tippng point tipped. 

MG: Well I guess I had the right timing for this conversation! 

CJK: It felt like it must have just hit.  There were nine magazines covers about being green. All of a sudden the world woke up.   

And it is okay to say “green”.  Two years ago there was a lot if trepidation in terms of what green really meant.  But now, it is very much accepted as a word that is okay to use; it has positive implications. 

It is also a lifestyle that touches on more than just global warming including the food that we eat, what we buy, how we live, what inspires us.  So, it is much more a pervasive lifestyle idea or way of life. 

MG: Do you think that this interest in green is “sustainable”? 

CJK: [Laughs] I think it will.  It is coming from a real cultural shift.  It is not just a fad.   

Most of the talking has been about ways to save electricity with compact fluorescent light bulbs.  Now, you look at people who are beginning to talk about the difference between local and organic food.  You look at people who are worried about the price of gas and its impact on their summer vacations.  Carbon offsets are now something people are talking about.  All of those cultural factors speak to this shift in lifestyle. 

MG: What is your offering to advertisers?  How are you unique in the market? 

CJK: Well, we just launched so we announced with just six sites.  And already in the next coming weeks we will have quite a few more [sites] to announce as part of the network.  Our goal is for it to be quite large and aggregate the voice and following in the market place.  What is different about our network is that we are building it from the bottom up with grassroots sites that already have a voice and a following. 

Clearly, the advertisers are looking to reach this audience because we see new products being launched in this category – whether that may be new products, product extensions or large multinationals buying more endemic companies to create brand extensions.  Kashi was bought by Kellogg, General Mills bought Cascadian Farms, and Colgate bought Tom’s of
Maine.  What we are beginning to see is that the major marketers are also recognizing [green] as a market segment that is important to them.

MG: Do you have a sense as to the demographics that you are able to target through the network and/or the purchasing power that they have? 

CJK: We do not have our own specifics yet; we rely on market-based data.  On our own site we know that we have a pretty even split 60:40 female.  The sweet spot for age is 25-39, though we sell to advertisers 25-54. 

MG: How about household income?  

CJK: We know that the audience is more affluent.  It costs more to buy organics.  It costs more to remodel your home in a more energy efficient way.  In automotives, the price differential for hybrids is worth it because people often want to make a statement. 

For the advertiser, it’s almost as much about brand alignment as it is about targeting a market segment.  Again, while that are looking to introduce new products in this overall lifestyle category, they look to do it with a brand that speak to this marketplace, in a way that is a “curated” experience, if you will. 

MG: Do you think these people are early adopters or mainstream consumers? 

CJK: I think they are somewhere in between.  I think we have seen the early adopters and that is probably who we have been speaking with in our first year of service.  And we are very clearly seeing that [LIME] is very much a mainstream brand and [green] very much a mainstream lifestyle.   

MG: How do you differentiate yourself against other ad networks like 24/7 Real Media, portals like Yahoo which can tag your affinity when you visit their green content pages, or behavioral targeting companies like Tacoda? 

CJK: I would describe it as the difference between being broad and only an inch deep versus being narrow and very deep.  When I look at a company like Tacoda, they have a wide variety of audience segments, they are aggregated segments across an entire network of sites.  What we are doing is focusing on one segment alone but going very deep with that segment. 

MG: What is your long term vision for your green ad network and how does it fit within your overall strategy for LIME? 

CJK: We think that the world is moving to this idea of more digital verticals.  When we first came onto the web, we used giant aggregators like Yahoo and AOL.  And now, we are seeing the world divvied up, to some extent through these curated communities where one can not only read text, be entertained by video, and view podcasts, but also connect with community and shop for products that are relevant to your lifestyle.   

We have really built one at LIME – as a media company and as this digital lifestyle vertical that aggregates the voice of this green living movement.  It is really a kind of a destination if you will.  Our vision statement says it all: we want to be where the new green lives.

Launching Sprig into a Rising Tide of Green Consumerism

An interview with Mark Whitaker, Editor-in-Chief of New Ventures, Washingtonpost.Newsweek Interactive 

Consumer spending on green products is growing: the 2007 Cone Consumer Environmental Survey cites that nearly half (47%) of all Americans purchased eco-friendly products in the past year.  Such green products included:

• Products with recycled content (62% of consumers who purchased green)
• Energy-efficient home improvements (56%)
• Cleaning supplies (48%)
• Organic or other third-party certified foods/beverages (24%)
• Energy-efficient cars (13%)
• Green apparel (10%)

Given the choice, American consumers say that they prefer to purchase more eco-friendly products.  Yet, there are stipulations: when while most people say they will buy green, they typically do so only when product “price, accessibility and attributes” are similar to green alternatives.  (“The Rising Power of Green Spending,” Kenan Institute Asia, December, 2006) It is not surprising then that online business models are emerging to capitalize on this growing interest in greener consumerism including:

Shopping sites: Amazon recently added a “Sustainable Living” section, joining existing sites including VivaTerra and Organic Fair Trade that sell greener products directly to consumers. 

Shopping advice sites: Online publishers – including Washingtonpost.Newsweek Interactive which launched Sprig last week and National Geographic which recently acquired The Green Guide – are joining existing green shopping advice sites such as Great Green Goods and Ideal Bite to inform consumers on green products and lifestyles.

 

Sprig – short for “Stylish People are Into Green” – is a compelling online shopping advice and lifestyle site offering original content and news on stylish products that happen to be green.  The site’s goal is to become the Daily Candy of green – and then some. With a robust web site that aggregates green products – 1,500 at launch and counting across the food, fashion, beauty, home and lifestyle categories – and provides exclusive editorial content, Sprig promises an engaging shopping platform for the growing audience who values green style. 

Last week, I had the opportunity to speak with Mark Whitaker, Editor-in-Chief of New Ventures at WashingtonPost.Newsweek Interactive.  We talked about the decision to launch Sprig, its growing target audience and the emerging interest in green consumerism. 

MG: What is the impetus for Sprig and what will it offer consumers?

MW: Sprig is the convergence of two things.  First, a willing appetite at the [Washington Post Company] board level to do more investing online.  Last year we generated $100MM in revenue [online] with 250 employees devoted to the channel.  That is where we expect the growth. 

Second, we were approached by an editorial business team that had been involved with Organic Style at Rodale.  [The magazine] had folded for a variety of reasons.  They came to use and said: “We think that the idea of having a publication that identifies great products that are also environmentally friendly would be a great service.  And this is the moment.” 

And if anything, it is better done online.  One, the online [channel] is more environmentally-friendly.  Two, people who are forward thinking about the environment are also more likely to be online.  And three, it offers instant delivery. 

MG: Who is your target and what are you offering? 

MW: We plan to target women as the primary consumers and decision makers about these products.   

The original concept was focused on the newsletter. You know the Daily Candy? 

 

MG: Yes. 

MW: The Daily Candy has shown that model of short daily newsletters – devoted everyday to different products that makes you feel like you are getting the latest information – works.  The newsletter is a very viral thing both in terms of the technology and with its target: women as an audience are evangelists and tell each other.  They have shown that has worked.  Let’s take that kind of model and apply it to this space. 

But, then we decided to be far more ambitious and launch a website and have it more than an archive of our newsletters.  [The website] will have video 2-3 new clips a week, ranging from consumerist profiles of companies to “how-tos” with interviews with green experts.  Green celebrities that we interview will fill out an online questionnaire that we upload with pictures that they send to us.  We will also allow them to go into our database to identify products that they like, to create sort of a celebrity wish list. 

For consumers, we will also have a template that users can use to create your own page.  They can fill out the questionnaire, upload pictures, fill out the questionnaire, pick products from the database and [create] a profile page that looks like our expert pages. 

What I think is really the killer app in this is the interactive, searchable database of green products.  We are hoping to have as many as 1,500 products at launch and then keep adding to it.  For each product, we will have a blurb about why we think it is a good product and what is an environmentally friendly product, along with the name of the product, company, price information and a link to the [product] site. 

MG: How do you leverage the data? 

MW: That is a very interesting question.  What we know we are good at is selling display advertising against quality content.  But, obviously, we have the potential to experiment with other things like more targeted advertising.   

The other thing that is interesting about this space is that more and more products are coming onto the market.  The two principle editors say that when they go out to the shows, the increase in good products has grown exponentially even compared to a year or two ago. 

MG: Do you feel that you are bringing style to the green market or green style to the mass market?

MW: I think it’s more the latter.  Until recently, there were many people that thought green style was an oxymoron.  We do not think that is true anymore; we think it is one of our core convictions behind the site.   

Some elements within the traditional green community won’t [embrace the site] because so much of it is about shopping and consumerism.  By definition, Sprig will not be for them.   

But, we think the real opportunity is with people who are becoming aware of [green] but don’t quite know what to do.  If they are in a position where the do not have to sacrifice anything – style, quality – they will be interested.   

This is not a site that will overtly push a lifestyle on you; it is going to give you options.  One of our mantras is that the world may be better off if 95 percent of the people became 5% more green than 5% of the people becoming 95% more green.   

MG: You are providing consumers with a place to find green products.  But you also may be spurring supply because you are providing a low cost channel for suppliers to test and distribute green products.  Is that not the case? 

MW: That’s right.  To say upfront that we have that effect would be presumptuous.  Some people would say that we are being “light green”.  That may be true, but the fact of the matter is that by being light green we will encourage more mainstream producers to actually start producing new products. 

One thing you will notice is that in terms of the aesthetics: [Sprig] is not about shouting green at you.  If you go to most of the existing green sites and publications, the color green almost become a cliché. 

We wanted something that felt distinctly like a brand.  We wanted a design and color palate that evoked what we were talking about without being heavy-handed and literal.  We also wanted to project out ten years and said: “What if green is universal then?’’ And calling yourself “green” does not really give you something extra.  So we are hoping people will embrace [the brand] not just because it is green but because it is cool and they like our tastes and aesthetics. 

MG: Why is this the right time to launch Sprig? 

MW: I think that we are at the front edge of the wave.  You can see the wave building, but it has not crested yet, and we are jumping on at the right moment. 

MG: You say that women are your primary target.  Tell me about their demographic makeup?  

MW: [Our target] is based on both demographics and psychographics.  It is women with a fairly wide age band.  But, elements within each age group will connect with us for slightly different reasons.  It is for younger women who want to be hip and stylistic.  They are also a generation that cares about the environment.  If there tends to be an activist movement on campus, that tends to be it.  So they are attracted to it.   

There are also enlightened baby boomers who are getting more into this.  The Laurie David [co-founder of Stop Global Warming and a producer of An Inconvenient Truth] type.  Or, in between people who have been turned on to it because they are mothers and are concerned about what is good for their kids.

MG: Are these women purchasing green products today or are you going to open up a whole new world for them? 

MW: I think it will vary.  Some people will be very knowledgeable, but given the depth of our [product] database, we will introduce them to a lot of products they didn’t know about. 

But then I think there will be some people who have literally never really thought about this.  We want [the brand] to be accessible to those who do not think of themselves as green. It is almost like it is the kind of site that they would want to shop or check out anyway.  And all of this stuff is good for the environment.  That’s cool.

Hybrids Shift into the Mass Market

Part II of an Interview with Bruce Ertmann, Corporate Manager of Consumer Generated Media, Toyota  

Shifting a company’s customer base from early adopters to mass market consumers is one of the key challenges facing green marketers.  Few green companies have been able to expand their niche beyond a core set of customers.  One of the primary reasons is that consumers tend to not like paying price premiums for green products.  Another reason is simply that consumers have not traditionally prioritized “green” as a deciding attribute when making purchase decisions. 

Yet, certain green brands like the Toyota Prius seem to be crossing this “chasm” into the mass market.  Though still in the early stages of their adoption, hybrids have already generated broad appeal with mainstream consumers.  Moreover, the stereotype of hybrid owners as treehuggers is far from the truth: in fact, they are high income, mainstream consumers.   

The results from a recent consumer survey by Topline Strategy Group (“Why People Really Buy Hybrids”, 2007) concur.  Topline found that 73% of Prius owners surveyed acted like mass market consumers (ie, they had a financial incentive to purchase the vehicle such as lower sticker price or operating costs than other choices considered) versus 23% of early adopters who paid a premium over alternative choices to purchase the hybrid.  Moreover, for marketers, Prius owners are an attractive target audience: 71% have household incomes over $100,000, with 28% at $200,000 or more.  

While it is uncertain whether this research is statistically significant (n=118), it is at least directionally representative of what Toyota itself is observing in the market.  Recently, I had the opportunity to speak with Bruce Ertmann, Corporate Manager of Consumer Generated Media at Toyota.  We spoke of Toyota’s success in the hybrid market, its target audience and the shift to the mass market consumer.  Here are his words: 

MG: What kind of consumers purchase Prius vehicles? 

BE: When we first launched the Prius, people joked about all of the tree huggers who bought the car.  Yes, we had those diehard owners, passionate people.  But, it truly has become a mainstream vehicle.   

For the longest time, we were undersupplied with the Prius.  [Toyota’s] US president went to bat for us this past summer and was able to get additional production in Japan.  Production came on late last year [followed by a] big sales push in December which most manufacturers have.   

And then in January our Prius sales dropped off significantly.  At the same time, we had all of this new inventory coming into the dealership.  So instead of a six month waiting, list we had inventory at our dealerships – which is frankly normal.  We began to see some of the traditional media ask whether the bloom was off the rose for the Prius and hybrid technology in general. 

But, in February we had a strong sales month.  Just this past weekend, we sold 2,000 Prius vehicles nationwide – a record for us.  So, [March] will be a record sales month. The vehicle continues to be hot and the hybrid technology still seems to be a winner with consumers. 

MG: Are you seeing the same customer shift across all your vehicles? 

BE: Yes, definitely.  We are seeing this with the Camry, our top selling car.  That vehicle as a hybrid version has become very hot.  The demographic is such that the more mainstream Camry buyers interested in a hybrid version found the premium to be tolerable.  

Right now, our belief is that integrating hybrid technology into more of our vehicles is the smart thing to do.   

MG:  How have you evolved your marketing as your audience shifts?  

BE: We have changed our marketing approach to push it towards a more mainstream audience.  We pulled all of our Prius advertising for a while.  While was kind of unique in of itself – and perhaps green-oriented you might say – because we did not have enough vehicles to supply demand.  But we have changed that now.  

We do some different things besides straight advertising.   We have a hybrid synergy tour, for instance, that launched last month.  It really is an educational effort on our part. It is almost like a moving auto show on a semi-truck that exhibits our hybrid technology and how we are trying to integrate it into other vehicles that we are bringing to market.    

We show [consumers] how the technology works.  People like the idea of the regenerative nature, where you are actually recharging the battery when you put on the brakes.  At the same time, there are others who want us to develop a Prius that you can plug-in to the electric grid to recharge the battery.   

From a pricing standpoint, we are trying to offer more in that vehicle for the money.  For instance, we are coming out with different versions of the Prius, a sports version.  We put leather in the car last year and added more features.  People wanted a little bit of a luxury feel to the vehicle which may seem counter to the type of people that we may think buy that vehicle.    

MG: Overall, how would you characterize your target audience?  

BE: We are seeing a broader customer demographic base that we have in the past based on our research.   

People feel it is a smart decision on their part to drive a vehicle with hybrid technology.  They do not think that they are bragging or showing off or becoming a tree hugger.