Consumer Packaged Goods

Artificial intelligence (AI) and algorithms are increasingly key pieces of technology for Procter & Gamble (P&G) as it aims to improve advertising efficiency and effectiveness, brand chief Marc Pritchard said during a livestreamed keynote at the Association of National Advertisers (ANA) Media Conference in February 2023.

The packaged goods executive, who is board chair of the trade group and delivered the confab’s opening address for the eighth time in its 11-year history, started his talk by acknowledging that P&G has lost its status as the world’s top marketer by media spend. It’s a change he attributed in part to a focus on precision versus volume, suggesting that others in the industry could benefit from adopting similar thinking.

“Celebrating a company as the largest spender implies that it's better to spend more and more each year,” said Pritchard. “We see it a little differently, and that it's time for a reset.”

P&G has made efforts to in-house marketing functions over the years, notably in media buying. This strategy has extended to more tech-forward areas like data and analytics and AI development, Pritchard added at the conference.

Multiple units within the company, which owns Tide, Downy and Pampers, now rely on proprietary algorithms that draw on “a vast repository of consumer research data” from across decades, Pritchard said. With P&G’s in-housing bets reaching fresh levels of maturity and sophistication, its relationship with marketing services providers — which has been contentious in the past — continues to shift.

“More than ever, we need agency partners to see around corners,” said Pritchard, again calling out AI as an example. “We're finding that we can do more work in-house productively and we can strengthen agency partnerships at the same time to create more value.”

Algorithms in action

Pritchard joins a chorus of executives who have put renewed emphasis on AI and adjacent technology in 2023. The rapid rise of solutions like OpenAI’s ChatGPT has captured the interest of both consumers and investors and set off a firestorm of debate around the ethical implications of ceding more work to automation. Top agencies also appear eager to jump into the space.

For P&G, AI intersects with a concentrated push around first-party data. Pampers, for instance, needs to engage the relatively small subset of parents who have children in the diapering stage. In turn, the marketer has switched its model to focus less on broad-based channels like TV and more on owned channels, such as a due date calculator, baby name generator and its Pampers Club rewards program. Data acquired from these assets is then leveraged by an in-house media unit for targeting purposes. 

“With first-party data and other sources, the Pampers media team has created precise smart audiences using a proprietary algorithm that defines consumer groups across the various stages of baby and child development,” said Pritchard.

Advertising creative is also being tested more frequently against AI. Pampers and other P&G brands like Tide rely on an AI studio offering that uses a “neural data network” built on decades of P&G consumer testing, according to Pritchard. Consumer feedback on new efforts is uploaded to this system and measured against existing ads to predict in-market performance.  

“This allows us to make changes to images, music, copy or text to iterate and improve the ad for the very, very best performance, very quickly,” said Pritchard. 

The executive claims this approach is cheaper and more efficient than traditional ad-testing methods. Pampers is now able to optimize more than 140 different ads per year for various channels, including TikTok, YouTube and e-commerce. The brand grew its U.S. sales by 10% in 2022 while increasing return on investment by 17% and media savings by 15%. 

Tide applies AI differently because it’s aimed at a wider swath of consumers, giving TV and streaming greater prominence. The detergent brand now has planning and scheduling algorithms that help it place ads across dozens of networks and thousands of program combinations while cutting down on redundancy, a sore spot in connected TV. P&G claims it saved $65 million in 2022 through its fabric care in-housing.

“Now, they're using an algorithm to test a new way to buy ads that's spread evenly across all TV programs, channels and day parts, which should increase reach another three points and save another $40 million,” said Pritchard of the fabric care team.

New frontiers

With automation bolstering aspects of P&G’s legacy media business, an algorithmic bend is bleeding into more nascent channels as well. Retail media networks represent one of the CPG marketer’s largest and fastest-growing buckets of spend, according to Pritchard. 

Together with retailers, P&G is creating what he called an “auto-bidder.” The digital solution opens direct access to retailer search programs and lets P&G adjust its ad buying and content “every 15 minutes automatically,” the executive said. The end result is four times higher return on brand sales and bigger basket sizes for merchants. 

During a Q&A portion of the event, Pritchard was asked about how he thinks about AI practically for P&G amid a period where marketers are trying to discern what’s hype versus substantive.

“The best way, we found, to do it: Don't talk about the algorithms, don't talk about the technology, don't talk about AI,” said Pritchard. “Talk about the outcome you want. What are we trying to achieve?”

Coca-Cola recently became the first marketer to take advantage of a partnership between management consultancy Bain & Company and OpenAI, the developer of artificial intelligence (AI) software ChatGPT.

Through the partnership, Coke will leverage tools like ChatGPT and DALL.E, a digital image generator built on deep learning, to enhance its marketing and improve operations. Potential use cases for brand marketers highlighted in the announcement include more personalized advertising copy and targeted messaging.  

In a statement detailing the tie-up, Zack Kass, OpenAI’s head of go-to-market products, said that Coke’s strategy with AI is the “most ambitious” his firm had seen to that point from a consumer goods company. AI has quickly risen to be one of the most-watched technologies in marketing in 2023, though ethical and implementation questions remain. 

Coke is one of the most recognized packaged goods marketers globally, meaning that its early adoption of OpenAI’s solutions could further accelerate the trend while producing practical use cases for AI.

“We are excited to unleash the next generation of creativity offered by this rapidly emerging technology,” said James Quincey, chairman and chief executive of The Coca-Cola Company, in a statement. 

In the press release and an accompanying video, an executive from Bain described AI as being at an “inflection point.” Bain has been integrating OpenAI’s offerings into its internal systems over the course of a year, per the announcement. 

“We see this as an industrial revolution for knowledge work, and a moment where all our clients will need to rethink their business architectures and adapt,” said Manny Maceda, worldwide managing partner at Bain, in a statement around the OpenAI alliance. 

ChatGPT went live to the public in November 2022, but quickly pushed discussions of AI back into the mainstream, with breathless media coverage and investors raising more questions about how much of a game-changer the category could be. Microsoft, which previously worked with OpenAI, announced an additional $10 billion investment in the startup in January 2023. The tech giant has implemented OpenAI’s language-learning solutions into Bing and its Edge browser amid a budding search war with Google. 

Maceda added that the collaboration with OpenAI will give Bain direct access to AI models that can be used to tailor digital services for clients. In Coke’s case, that seems like it will manifest in personalized advertising that is reliant on copy and images created with the help of automation, along with unlocking some new operational efficiencies. The release also suggested AI could help categories like retail banks, telecommunications and utility companies with customer service through real-time scripting, or financial advisors with productivity and communication with clients.

Dizzying hype around AI has been complemented by renewed skepticism. Solutions like ChatGPT still get a lot of things wrong but can express misinformation confidently or behave in odd ways. Microsoft has limited the amount of chat interactions users could have with its Bing AI after long conversations led to off-putting results. Artists have also decried tools like DALL.E, which are often trained on human-made images, raising questions around ethics and ownership.

A branded reality show, a virtual restaurant and soda experiments ranging from nitro-infused cola to Peeps collaborations are just a few of the creative swings Pepsi has taken in past years to establish what it bills as a “disruptor” reputation. As a focus on boldness continues, Pepsi executives are shaking up a visual identity they view as too sedate to match the liveliness the beverage giant wants to bring to the table. 

“We're doing all these things that are not shy, they're not recessive,” said Todd Kaplan, Pepsi’s chief marketing officer, in an interview with Marketing Dive. “The logo and visual system just felt inconsistent with how our brand has been behaving.”

Pepsi in March 2023 unveiled an overhaul of its logo and touchpoints spanning digital and physical channels, including packaging, fountain and cooler equipment, trucking fleets, dining and fashion. Years in the works, the makeover was developed internally at Pepsi, with feedback along the way from various agency partners. The new look will be implemented across brand touchpoints, starting in North America in fall 2023 for the brand’s 125th anniversary.

“It's really been a progress, a journey,” said Mauro Porcini, chief design officer at PepsiCo, on the call with Kaplan. “This is the landing of that journey, and the beginning anew.”

Goodbye to minimalism

With its new chapter, Pepsi is enacting a hard pivot away from the type of minimalist branding that’s overtaken marketing over the past decade-plus. The soda’s muted blue color scheme has been swapped for a loud electric shade, complemented by sharper black tones to create contrast. The update also puts Pepsi Zero Sugar, which already uses the color black on its packaging, front-and-center in the marketer’s portfolio as the better-for-you option becomes a more substantial growth driver, according to Kaplan. 

“It really is the first time we can truly embrace this concept of a master brand approach,” said Kaplan.

Another alteration consumers may notice is that the word “Pepsi” has been shifted up to appear inside the soda’s globe-shaped logo, an attempt to bring more cohesion and flexibility to the design while harkening back to past iterations of the iconography. The revamped “wordmark” is written in a bolder custom typeface, differing from the current version’s soft, lower-cased letters. Along with rejiggering existing assets, Pepsi designed a “pulse” motif to communicate a sense of energy and movement and pay homage to the music-oriented efforts that have resulted in some of its most memorable marketing. 

Collectively, these changes are united by the brand’s guiding mission of “unapologetic enjoyment,” or the joy people feel from cutting loose and indulging, per executives. The revisions are also tailored to recognize the demands of an increasingly digital and “phygital” era, where fewer aspects of marketing are static while jumping between tactical and plugged-in experiences is in vogue. A press release announcing the news nods to Pepsi’s interest in emergent channels like Web3 and the metaverse, as well as a desire to connect “younger generations” to the company’s heritage. 

“We need to make sure we're not just a JPEG in the corner that people cut and paste,” said Kaplan. “We need to be embracing these new mediums.” 

Years in the making

The timing of the makeover aligns with Pepsi’s 125th anniversary in fall 2023. That’s when a consumer-facing push promoting the shakeup will kick into high gear in North America before expanding globally in early 2024. Pepsi at the time of the interview declined to share details of what the marketing will look like, while noting it will be a “big moment” for the brand. PepsiCo has managed to perform well amid a volatile economy, beating analyst expectations on earnings in revenue in Q4 2022, though it’s also enacted price hikes due to inflation.  

The new visual update marks the largest gap in time for Pepsi between making such alterations. The last major update was 14 years prior, just a few years after the iPhone’s debut and well before the ascendance of apps like Netflix and TikTok led Pepsi to rethink its media playbook. Pepsi in 2022 stepped away as Super Bowl Halftime Show sponsor after a decade amid a prioritization of digital, though it preserves a relationship with the NFL. Looking forward, staying agile with fast-shifting consumer behaviors remains the top mandate. 

“We're now on the verge, in the next 10 to 15 years, of an explosion of where we will go as you think about Web3 and the metaverse, as you think about digital overall,” said Kaplan. 

In that way, one force behind Pepsi’s current makeover could be read as a desire to cater to younger cohorts like Gen Z that has already led the soft drink marketer to invest more in apps like TikTok and content creators. But Kaplan noted that Pepsi is a mass consumer brand, with key offerings like Pepsi Zero Sugar frequently targeted at the older crowd. Pepsi Zero Sugar became the centerpiece of the brand’s professional football marketing for the 2022 season and ran a Super Bowl campaign around a reformulation. 

“What's great about this new system, for an older consumer it feels like a modernized version of something that's familiar. For a younger consumer, it feels bold and on-trend,” said Kaplan. 

“There are not a lot of 125-year-old brands that can continue to feel currently relevant to the time that they're operating in,” Kaplan added. “A lot of brands and legacy brands, as they're called, get stale over time.”

As the pandemic ebbs but leaves in its wake more economic uncertainty and global disruption, brands in 2023 have doubled down on campaigns that revolve around self-care, comfort and positivity.

Like many packaged foods marketers, Kraft Heinz has ridden the waves of the last few years and worked to meet evolving consumer expectations around finding moments of joy amid persistent challenges. Its Mac & Cheese product has been at the forefront of these changes as the focus of a "Help Yourself" campaign that launched in 2021 and a streamlined rebrand the following year.

Kraft Heinz in December 2022 unveiled the latest installment of "Help Yourself" with a series of short-form spots that use its smile-shaped, cheese-covered noodle to transform quotidian problems into more positive concepts. In the 6- and 15-second ads, "struggles" turn into "snuggles," dress pants become sweatpants and "rush hour" morphs into "happy hour," to name a few.

"In the new spots, we asked ourselves, 'What does it really mean to help yourself?' And that's where we got this universal truth: No matter who you are, how old you are, or whatever you have going on in your life, Kraft Mac & Cheese invites you to put yourself first by choosing what makes you feel good inside and out," said Victoria Lee, brand manager for Kraft Mac & Cheese.

A light bulb moment

The new creative is the latest step in a two-year-plus journey to modernize Kraft Mac & Cheese and position the brand around the positive power of comfort food. Grounded in interviews conducted by WatersonGarner that revealed the brand to be a source of comfort for experts and consumers, the "Help Yourself" campaign rolled out in November 2021 and continued through a rebrand the following summer that focused on shifting the perception that leaning into comfort is lazy or bad for you.

As Kraft Heinz hoped to expand "Help Yourself" in the second year of the campaign, agency Johannes Leonardo looked into getting specific with the double entendre of a title. The agency saw a bowl of Mac & Cheese as a "vehicle of transformation" that — no matter what consumers are facing — results in a feeling of comfort. The brand's iconic offering let the agency connect with consumers on a nostalgic level and served as a centerpiece of the creative.

"We started to have fun with going into the noodle and [playing] that sound you get when you're slurping up the last bit of cheese [and] it inspired this action that became our whole storytelling mechanism," said Grace Martin, creative director at Johannes Leonardo. "Once we stumbled on that, it was a light bulb moment… there's so many different stories you can tell with this."

A creative puzzle

In the case of the campaign's 6- and 15-second spots, the stories are simple: expressive word art is transformed, turning a spiky "feels" into a plush "feels," or rewriting "fussin'" as "bussin.'" Some don't even need words: In one, an office chair enters the Mac & Cheese noodle and becomes a recliner. Most of the ads get extra mileage out of sonic branding and musical cues as well.

"It's like a creative puzzle," Martin said. "Let's think of a moment where you were seeking out comfort and then what's the most interesting way to bring that story to life? What visual format would you use even to bring that to life?”

The ads have a handmade animation style reminiscent of MTV and Nickelodeon station identification spots from the ‘80s and ‘90s. The brand and agency worked with London shop Nexus and director Conor Finnegan, who brought a charm, wit and comedic sense to the effort, Martin explained. Almost every concept has a unique animator, which helps differentiate the spots and hopefully appeal to a wider audience.

"The more real and relatable these stories [are], the more they can make you laugh, make you notice little things, the more fun the work is, the more it resonates with you," Martin said.

For Kraft Heinz, reminding large and diverse audiences of their relationship with Mac & Cheese is key to the company's success. One of the marketer's billion-dollar brands, Mac & Cheese grew 8% year-over-year in 2022 and sells over 1 million boxes every day. 

"The simplicity of this storytelling is really beautiful because we are able to create so many different spots [and] we're able to tell so many different stories," Lee said. "Whether you're a single person in your 20s or a family of four, there is a story there that you see. That is the beauty of the work: the simplicity of using the icon to tell the story."

In a consumer ecosystem that increasingly favors wellness, making nutritious food choices should be as effortless as possible, according to Kind Snacks Global CMO Kelly Solomon. That’s why the consumer packaged goods brand is doubling down on pairing its simple ingredients with a marketing strategy that’s just as digestible.

To communicate the rather undecorated message, Kind has a slew of advertising efforts slated for 2023 meant to signal a re-commitment to simplicity and bring its core ingredient — whole almonds — center stage. Key to the push is a TV commercial, which was unveiled Feb. 27 on linear channels and not only represents the first from the company in over a year, but also the first under Solomon’s guidance. The company has also planned a series of immersive activations meant to showcase simple nutrition while promoting its core value, kindness.

“We want to make nutrition easy to understand whether you're an older consumer and you just don't understand what it is that you need to be healthy or younger consumers that honestly have the same questions,” Solomon said. 

Mars Inc. fully acquired Kind North America in late 2020, several years after taking a minority stake in the healthy snacking company.

The commercial, titled “I See Almonds,” is scripted true to its name. The concept imitates man-on-the-street interviews, with a host challenging interviewees to identify one ingredient in Kind’s Dark Chocolate Nuts & Sea Salt bar to win a prize. One caught-off-guard respondent is quick to choose almonds as the answer, seemingly unaware that a massive billboard directly behind the person is streaming a video of almonds being drizzled with chocolate. 

The creative, which debuted on YouTube and Hulu Feb. 13, includes a 15-second and 30-second version and was created with Energy BBDO. When crafting the concept, being outright was a priority, Solomon said.

“We wanted to be super laser-focused — in 15 seconds, you really don’t have time to tell a complicated story,” she said.

Such a no-frills mindset was also an informed decision based on less successful executions of the past, the exec continued. Kind’s last commercial, titled “Choose to Be Kind to Your Body,” first aired in 2020 and was meant to nod to the positive outcomes that could result from choosing Kind, like the ability to change the world or, perhaps more doable, be kind to others. However, in pursuit of inspiration, the brand’s message struggled to resonate.

“You’ll watch it three times and be like ‘What’s going on here,’ Solomon said. “Sometimes you’re too close to it — you fall in love with it — and then someone who has never seen it comes in and it doesn't make sense to them.”

The timing for the lastest ad’s rollout — mid-February — was intentional. The period just misses the “new year, new me” hype and, hopefully, catches people at a point where they are looking to make more realistic shifts in their New Year goals, like opting for healthier snacks, Solomon said. More broadly, consumers these days care more about wellness than they did before. According to a 2022 McKinsey study, approximately 50% of U.S. consumers report wellness as a top priority in their day-to-day lives, up from 42% in 2020.

“We do social listening, we look at search engines and we understand what consumers are interested in and what questions they have — consumers absolutely want to know what they’re putting in their body.”

Nutrition goes full glam 

With upped stakes for a successful execution, Solomon feels confident in her ability to lead the snack brand’s marketing strategy, even despite having a less conventional background. Prior to being named Kind’s CMO in 2022, the exec spent 15 years combined with makeup giants L'Oréal and Estee Lauder, most recently serving as senior vice president of consumer marketing for MAC Cosmetics. Still, the similarities between food and beauty are clear, she said.

“There’s huge echoes of the beauty industry in the food industry,” Solomon said. “Beauty is very personal — it’s very much customized to your body, as is nutrition.” 

Among the differences, she added, is that marketing in the beauty industry often revolves around elevating specific products. However, at Kind, the focus is less about the product and more about bringing the brand to life. As such, Solomon and the team have made it a priority to bring Kind’s mission of promoting simple nutrition and kindness to the spotlight. 

One method the brand uses to communicate its message is through immersion, which often takes the form of pop-up events, she said. For example, the brand partnered with “Top Chef” host Padma Lakshmi to create Padma’s Kind Kitchen, a speakeasy-style pop-up restaurant that was open to the public from Feb. 28 to March 1, 2023, at Chelsea Market in New York City. To enter, consumers had to complete a small act of kindness, which granted them access to a slew of healthy menu items. 

Beyond out-of-home activations, Solomon also hopes to continue shaping Kind’s social media strategy around its mission, particularly on TikTok and Instagram, noting that purpose-driven content has performed well for the brand. Joining the increasing number of brands who are enlisting influencers for such efforts, Kind has partnered with chefs, dietitians and others who can speak to the brand’s nutritional value. 

The brand also struck a partnership around Super Bowl LVII with Donna Kelce, mother to Kansas City Chiefs’ Travis Kelce and Philadelphia Eagles’ Jason Kelce — who faced off during the game — to share a pre-game speech with the duo on social media that ended with a reminder that “kindness always wins.” 

Beyond evolving the brand’s social media presence, Solomon is quick to note that Kind’s brand strategy is already sound, noting that carrying the responsibilities of chief marketer is less about coming in to shake things up and more about strengthening a solid foundation.

“The marketing strategy before I got here was very much how do we bring our brand purpose and mission to life, how do we let the consumer know what we’re here to do, and it’s very much what we’re still focused on,” she said.

The road to diverse representation among marketing suppliers may be paved with good intentions, but the reality is it’s still a bumpy ride.

In a study released in April 2023, the Association of National Advertisers found that 56% of marketing executives are interested in supporting diverse suppliers. Yet, only 38% of those suppliers report having received increased investment from the marketing or advertising communities in 2022, and 46% believe that investment will increase in 2023. 

“The top takeaway is that investment is increasing, but there is still a bit of a gap between investment and interest,” said Bill Duggan, group executive vice president at the ANA. “We look at this as a glass half full.”

For purposes of the study, a diverse supplier is one that is women-, ethnic/minority-, veteran-, LGBTQ+- or disability-owned. Typically, 10% of ad spending is allocated for production, 10% for agency fees and 70% for media spend, Duggan reported. Therefore it’s important for there to be investment with diverse media companies.

Building relationships

The hiring of diverse talent and companies on the production side has been ahead of the curve, per Duggan. However, the largest component — media — is severely lacking. Only 1.85% of all current ad spending goes to diverse-owned media and only 1.2% of current spending goes to diverse-owned and -targeted media, according to the ANA’s Alliance for Inclusive and Multicultural Marketing (AIMM), in partnership with Media Framework and Standard Media Index. AIMM recommends that by 2025, 6.5% of all spending should go to diverse-owned media and 4.6% to diverse-owned and -targeted media.

That’s a large gap to fill in just two years, particularly when the new report suggests many advertisers are “sitting on the sidelines” because, while they are interested in doing something, they don’t know where to begin. This is especially true among those companies that rank just below the giants. 

“There are big companies that have made notable investments in supplier diversity,” Duggan said, pointing to initiatives from P&G and General Motors. “But there are other companies that are punching below their weight and could be doing more.”

That sentiment is also true when it comes to media suppliers. The general message from marketers is that there’s not enough inventory — or not enough quality inventory — to justify the investments in diverse media. As a remedy, Duggan suggested marketers lean in a bit more to create programs that are mutually beneficial. 

“It might not just be a media buy; it could include a content partnership or other activation,” he said. “It’s important for advertisers to build direct relationships with these media companies.”

Getting to work

On the other side of the equation, suppliers should develop more evidence that the investment in their businesses will produce the requisite returns. 

“I think it would help if there were more case studies that diverse suppliers would show to demonstrate the successes of these programs,” Duggan said. 

It’s important to keep in mind that success may not take the same form as what marketers are used to.  

“Marketers are used to certain metrics with traditional media — like CPM and reach — and these may not be the best metrics for diverse media measurement,” Duggan said. 

Among the suppliers surveyed, the challenges they cited included getting their foot in the door with national advertisers and agencies, negotiating the extended payment terms required by some advertisers and agencies (which many diverse suppliers can’t afford) as well as a lack of feedback when they don’t get the business. 

Still, the onus for improvement is on the marketers, who have the money, the control and the clout to do something, Duggan insisted. 

“The industry has work to do,” he said. 

Making a commitment

Perhaps the biggest challenge is demonstrating a commitment to diversity. Among the suppliers surveyed, 76% cited a lack of leadership support for working with diverse suppliers as a barrier. Similar numbers noted that many advertisers and agencies have identified opportunities to bring diverse suppliers into their marketing/advertising supply chain (76%), as well as an overall lack of understanding of the value of using diverse suppliers (74%). 

To address the latter two points, Duggan noted the ANA has developed several surveys, studies and white papers analyzing diversity in the supplier network, including the “Diverse Media GrowthFronts,” a certified list of diverse suppliers and instructional guidelines designed to help marketers partner with diverse media suppliers. 

Without a doubt, the most important impetus for change is the need for it to become a publicly avowed company priority, per Duggan. 

“When you declare your intention to work with diverse suppliers publicly, you’re declaring it to your employees and other important constituents,” he said. “You also need an internal champion [for diversity] to make it work.”

Ultimately, Duggan insists the intention to improve is there, as is the data underscoring that diversity is the way of the future, and those who don’t get on board will be left behind.

“Companies can see where the population demographics are going, and they want to have supply chains and suppliers that mirror and reflect their customer base and the country,” Duggan said. 

Correction: This article has been updated to reflect how ad spend is generally allocated. A previous version incorrectly assigned the breakdown to diverse suppliers. 

NEW YORK — The Interactive Advertising Bureau’s 2023 PlayFronts returned in-person, bringing with it a raft of publishers, platforms and brands evangelizing about the power of video games as a marketing tool. Marking its second year, the industry confab also frequently doubled back to a topic that would be familiar to someone who attended 2022’s PlayFronts: Why don’t marketers invest more in gaming?

Despite the continued ascendance of games in popular culture, including through HBO’s well-received adaptation of “The Last of Us,” marketers in many cases remain reticent to go all-in due to misperceptions about the gaming audience and the tactics available to them, speakers said. Even companies with an established stake in gaming and esports marketing noted those are areas where they need to be more open to learning from failure, a potentially daunting proposition in a belt-tightening period.      

“So much of what we're trying to do is take calculated bets in these places,” said Beth Woodruff, senior director of brand strategy, integrations, gaming and innovation at Ally Financial, during a panel at the show. “Sometimes, you have to go in knowing that you're maybe going to miss the mark a little bit. There are ways for brands to recoup from that.”

Woodruff was joined by executives with varied levels of gaming experience from PepsiCo, Mondelēz International and Coty for a discussion moderated by the IAB. 

In the case of Coty, the beauty marketer is a comparatively fresh face in gaming, though its push into the channel indicates how consumer preferences are changing. Increased adoption of gaming has welcomed a more diverse mix of marketers into an entertainment arena that’s typically been associated with energy drinks and salty snacks targeted at young men. About two-thirds of U.S. consumers are gamers in some capacity, though gaming captures less than 5% of advertising budgets, according to an IAB study that cited Entertainment Software Association data.

“Today, everyone is a gamer,” said Nicolas Comestaz, vice president of global media, communication and performance at Coty. “This is an existing audience that we need to consider as a marketer.”

Growing pains

With games now generating massive sales and holding the attention of key demographics like Gen Z, getting buy-in from corporate stakeholders seems like it should be an easier pitch. That’s not always the case, according to Woodruff, who helped execute an Animal Crossing activation for Ally earlier in the pandemic that resulted in a 320% increase in account openings. 

“Sometimes leadership is like, ‘Gaming, really?’" Woodruff said. “We feel like we have to constantly prove that down funnel.”

At the same time, gaming doesn’t always have a clear place in conventional marketing organizations. 

Some games-related marketing centers around in-game ads that function similarly to buying traditional programmatic advertising. Other tactics involve bespoke placements and integrations or creating custom maps for multiplayer titles like Fortnite, Roblox and Minecraft. Ally, for instance, designed an Ally Arena in Fortnite, with a planned launch for sometime in April 2023. And then there are content creators — the livestreamers and social media personalities who hold gamers at rapt attention but can be harder to control. 

“This is a new area that's sitting within several teams,” said Coty’s Comestaz of gaming. “I'm leading with media ... but most of the time this is coming from the team that's driving innovation within the organization. It requires a lot of willingness to collaborate across the teams.”

As a relative newcomer, Comestaz described challenges in shifting from being “opportunistic” with gaming to fostering long-term loyalty. On the other end of the spectrum, PepsiCo offered tips as a “first mover” with a history in gaming dating back to Mtn Dew Game Fuel’s debut. Paul Mascali, the food and beverage giant’s head of esports and gaming, cautioned against focusing too much on one-off experiments when trying to make an impact. 

“Honestly, that's not how we build a relationship with these communities,” said Mascali. “All of the deals we do are longer-term.”

At a conference displaying a lot of new bells and whistles for gaming, such as rewards systems and “g-commerce,” Mascali emphasized that creators are still the ones moving the needle and setting cultural trends. PepsiCo works with partners such as Dr. DisRespect, a streamer who can draw in between 30,000 and 40,000 daily viewers on platforms like YouTube, according to Mascali. A Game Fuel flavor made for Dr. DisRespect sold out within 72 hours. 

Marketers seeking similar success must learn to cede more creative control over to their partners, according to Mascali. That can be daunting — particularly when some influencers are prone to outbursts or injecting politics into their content — but is a better way to craft an experience that reads as authentic rather than forced to notoriously picky gaming enthusiasts. 

“That's where you get the gold,” said Mascali. “That's where you get memes and inside jokes and all that kind of buy-in from their audiences where it's becoming more than just an ad.”