April 20, 2024

Danone’s media game plan for 2024: AI, partnerships and responsibility

2024 is just a few weeks away and it is already shaping up to be one of the most dramatic. By the time this year is over, granular tracking could be as extinct as a dodo, the Western world could be scratching its head over the fallout from the transatlantic elections, and AI will be wreaking havoc like a bull in a china shop. The business world is about to be in for a wild ride, and Danone’s global director of media and brand communications, Catherine Lautier, tells how they are staying one step ahead of this whirlwind of change and chaos.

The following conversation has been lightly edited for brevity.

2024 will be a roller coaster for many advertisers. Is Danone strapped in and ready for all the twists and turns ahead?

In recent years we have embarked on a journey with a new CEO and a new strategy called “Renew Danone”, which has seen us reinvest in our brands. So last year was really a year of reinvestment for us in the media space, which we increased by 20%. We did this during a crazy year of inflation for many categories, including food, and it worked because of how strong our brands are. It allowed us to pass on price increases to them without negative consequences for our volume. We gain trust in our investments thanks to that strength. Speaking of inflation, we have also been able to contain its impact on media prices. This was thanks to the new partnership we have built with our new [creative] creation of the agency and how we consolidate our investment in a media agency.

Let’s go back to the last point about Danone’s agency relationships. What has changed there?

There is a really mundane, but very important aspect, which is price commitments. There is still value in having an agency on record that really helps you solidify the volume you need and the pricing commitments you need. That said, as we searched for a new agency, we rethought our compensation model to ensure we were getting the right level of strategic support. We didn’t want those rates to be just representative of our media purchases. Instead, we wanted to have the right expertise in areas like communications, planning, strategy, data and analytics, so we set up centers of excellence globally so our people can get support in things like retail media and data, areas in which they may not be available. able to find on his own. This has been really successful, as have outsourcing areas like advertising operations.

Let’s delve into his opinion on the media. Digital media can be and do almost anything a marketer wants, as long as the related advertising products have been appropriately adapted and features such as measurement have been properly developed. Is that something you’re thinking about as you optimize budgets and ultimately how to shift spend between different ad inventory providers?

There is no longer a clear distinction between television and digital. For example, we have almost completely divested from linear television in the United States. I try not to be dogmatic about it. [media channels] because we have a wide variety of geographies in our portfolios that have wildly different media landscapes. I said what I said about what happened with our investments in linear television in the United States, but in a market like Indonesia or Mexico, which are very important to us, linear television still plays an important role. Ultimately, it’s about reach and frequency and constantly driving penetration among low-frequency buyers who are new to the category.

The real challenge lies in creating loyal followers who consistently contribute to reach and frequency, attracting new customers to the brand. However, measuring the overall impact of its reach and frequency remains complex.

In fact, it requires more effort than ever to have the data and analysis necessary to continually onboard new customers. That’s why I’m particularly excited about retail media, despite the market fragmentation that comes with it, making it difficult to achieve a consistent return in frequency. Despite all that, within a retail media partnership, we can precisely target specific consumers who are likely to show interest in the category.

To me, this aspect is intriguing. The level of focus that we achieve with [third-party] Cookies in the past never achieved this level of behavior-based accuracy.

Since you first mentioned retail media, let’s switch gears. What’s your take on a marketplace that was once just another name for Amazon’s advertising business?

Let me clarify that I still consider Amazon to be the most influential retail platform for marketers due to its strong data capabilities. In many ways, it is the easiest place to invest. As for the rest of our retail partners, it’s a new type of relationship we have to work on.

Internally we face the challenge of budget allocation, which sometimes may fall to the marketing department and other times to the sales department. This divide makes it difficult to align everyone, whether they work in ecommerce, data, marketing or sales, to ensure we are optimizing our budget investments with our retail partners.

When we get those calls right, it’s really powerful because it allows us to achieve closed-loop attribution and target new consumers for our brand, and even within our category. The scale we can achieve here through second-party data from retailers is much greater than what we can do with our first-party data in other areas of media.

What about those internal problems you mentioned?

We are working to really achieve this. One of my challenges is educating our teams internally because our first reflex here is to think that retail media is a driver of e-commerce, which it is, but it is also much more. It’s all about brand building and covers the entire funnel of a media plan, so it should be something media experts buy. It is up to those experts to evaluate the value of the data to help us in negotiations with retailers. To achieve this, many silos need to be broken down internally, which is what we are currently working on.

Since it was Davos last week, let’s talk about turning claims of corporate responsibility into reality.

I fought very hard to create a responsible advertising and media roadmap for our product and media advertising teams. This roadmap covers several key pillars, including brand safety, marketing to children, support for journalism, diversity and inclusion, data and analytics, and sustainability. We have well-defined strategies for each of these pillars.

For example, we have a policy for brand suitability plans that involves the use of Integral Ad Science. We have also invested in Teads to promote responsible journalism. One aspect I’m particularly proud of is our commitment to allocating a portion of our media spend in the US to support Black-owned, LGBTQ+, women’s, and Latinx-owned media. This commitment extends to working with influencers who represent the consumers we serve. As a best practice, we are actively working to expand this initiative in the UK and Canada.

You said you had to fight hard for a lot of it, can you talk about what came out in the end?

Sometimes, it is as simple as doing the tests and displaying the test data. On the advertising side, for example, I wanted to test our ads to try to evaluate how we were doing from a D&I perspective when it came to representing our consumers in a positive way, or in a way they could relate to. I really struggled because the methodology didn’t exist, so I had to spend a lot of time developing it with Kantar using the different criteria from the ANA, Unstereotype Alliance and more to create something that I thought captured all the dimensions I needed. Once we got to that point, we were able to do the demo internally to show that we still had progress to make in terms of making sure our ads were relatable to all of our consumers and portrayed them in a positive way.

We would be remiss if we didn’t mention AI.

I’m very excited about AI, especially as a marketer, but my enthusiasm comes from several aspects of my role. At Danone, I don’t just oversee the media; I also manage creative agencies, marketing operations design, licensing, digital content production and public relations. AI is very promising in the field of digital content production. It is particularly interesting for automating tasks in areas such as e-commerce and the creation of social media assets. Previously, we faced challenges automating dynamic creative optimization and achieving precision marketing at the level I wanted. With the integration of AI, these challenges are solving themselves. AI can automatically generate personalized ad versions, allowing us to create personalized consumer journeys in online advertising and content. That being said, we are still in the learning phase. The next step involves evaluating how AI will impact our media buying strategies in the future.

Since it has such a profound impact on how Danone executes its marketing, are you thinking about what this means for the agencies you work with?

We are already using AI in our digital content advertising work through our partnership with Brandtech Group. Their collaborations with generative AI platform Pencil and agency Oliver have changed the way we approach work. [the latter]. While we are just beginning to explore the potential of AI in my media agencies, particularly in areas such as dynamic creative optimization and precision marketing, I am convinced that AI will not only improve our efficiency but also stimulate our creativity and strategic thinking. This is what excites me the most. AI can certainly handle mundane tasks, but it can also challenge us to be more strategic, whether questioning the resonance of our insights with consumers or even generating those insights in the first place.

On a broader scale, I am actively involved in a working group representing marketing and a company-wide initiative to understand the implications of AI. We recently published our first internal AI policy, which was the result of a collaborative effort involving several departments, including legal, research and innovation, IT and marketing.

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