Several weeks ago, I had the honor to write a guest post for the Google CPG Blog.  If you aren’t familiar with this blog, it is a highly recommended read for anyone on the brand or agency side working in CPG.  Below is a repost of my thoughts on Brands and Consumer Collaboration.

Brand Managers have historically been reliant on Consumer Research such as focus groups and surveys to be “in-touch” with consumers. But in this day of 24/7 access to consumer opinions from blogs, Twitter, and Facebook, Brand Managers need a new approach for understanding why people buy their brands. One of the most powerful ways to do so is through Consumer Collaboration. In its most simplistic form, Consumer Collaboration is about monitoring and participating in the conversations around our brands, listening to changing opinions in real-time. It is about tapping into what Google calls the “Database of Consumer Intentions” to gain a new sense of what our consumers are thinking each and every day. In fact, Google is a company making it easy for marketers to be in touch with the “database of intentions” every day through tools like Wonder Wheel, Insights for Search, Blog Search, and YouTube Insights for Video.

But true Consumer Collaboration is about going beyond that, giving marketers a chance to tap into the passion of consumers and collaborate with brand advocates. The world of digital gives CPG Marketers the chance to harness the energy of consumers to build remarkable brands.

In that regard, the need for moving towards a mindset of Consumer Collaboration is driven by three facts:

1. Consumers are sharing their opinions about the brand, with, or without, a Brand Manager’s blessing.
2. Consumers will be heard whether or not companies give them an outlet.
3. The amount of information about our brands (and access to that information) has never been greater.

Today’s Brand Managers must recognize a new approach to move beyond research and instead focus on collaborating with our consumers and your most passionate fans. This means we should invite consumers to collaborate with us to improve our brand. Scott Cook, founder of Intuit and Board Member of P&G, eBay and Amazon calls these “User Contribution Systems.” As Cook pointed out in the Harvard Business Review:

“Every day, millions of people make all kinds of voluntary contributions to companies — from informed opinions to computing resources — that create tremendous value for this firm’s customers and, consequently, for their shareholders.”

This fact has not been lost on CPG Brand Marketers. Whether it is Tide using the services of Get Satisfaction, or Hugo Boss Fragrance tapping into consumer creativity with HugoCreate.com, brands are starting to see the true value of Consumer Collaboration.

However, one of the best examples actually comes from a non-CPG company: Starbucks with their program, MyStarbucksIdea.com. Launched in March 2008, the site arrived one year after Howard Schultz famously wrote an internal memo that said “[we] desperately need to look into the mirror and realize it’s time to get back to the core and make the changes necessary to evoke the heritage, the tradition, and the passion that we all have for the true Starbucks experience.” MyStarbucksIdea was a way to regain that heritage and passion by inviting Starbucks loyalists to collaborative on reinvigorating the brand. As Starbucks describes the site:

What would make your Starbucks experience perfect? We know you’ve got ideas – big ideas, little ideas, maybe even totally revolutionary ideas – and we want to hear them all. That’s why we created My Starbucks Idea. So you can share the ideas that matter to you and you can find out how we’re putting those ideas to work. Together, we will shape the future of Starbucks.

When the site first launched, the critics classified it as nothing more than a “glorified comment card.” But over the past year, Starbucks has shown that they are truly committed to making the site much more than that. In the spirit of Consumer Collaboration, Starbucks enrolls people throughout the lifetime of an idea. At the heart of the process is a team of Idea Partners – Starbucks employees who are experts in their respective field. These Idea partners read all ideas and comments on the site, but also guide ideas through the Starbucks organization. And just as important, they keep consumers up to date via the Ideas in action blog where Starbucks writes about the ideas that are recommended for implementation and details where they are in the process (Under Review, Reviewed, Coming Soon or Launched).

This is consumer collaboration at its finest. Starbucks isn’t inviting consumers to a two hour focus group where they give ideas and never talk to the company again. Instead they are inviting people to give their opinions and providing an outlet to do so. The result is that consumers are acting like part-owners of the company because their ideas are being heard. More brands need to follow the lead of Starbucks in this area, leveraging the power of digital to practice true Consumer Collaboration.

Lots happening in the world of digital and I have been negligent in sharing the news / posts that really caught my eye lately.  So with that, here’s my latest weekly (better called monthly) update:

Breathing New Life Into Virtual Worlds – PR 2.0:  Virtual World membership grew by 39% in the second quarter of 2009 to an estimated 579 million with Youth driving most of that growth.

Four Questions for Successful CPG Social Media Marketing:  Great post from the Google CPG Blog, which is a must read if you don’t subscribe to it.

Why Teens Don’t Tweet:  Only 16 percent of Twitter users are under 25.  More specifically, 45-54 year olds are 36 percent more likely than average to visit Twitter, making them the highest indexing age group, followed by 25-34 year olds, who are 30 percent more likely.

Why We Need Marketing General Contractors – The Toad Stool:  Another great post by Alan Wolk.  I frequently use his term “NASCAR Blindness” and now I think I might be using “Marketing General Contractors” as well.

Best Buy’s CrowdSourced Job Posting is Live:  I’ve said it before, but this is one reason Barry Judge is a CMO that just plain gets where marketing is headed.

6 Lessons from the Best Marketing Campaign Ever – Rohit Bhargava:  At the Cannes Ad Festival this year, a single marketing campaign took home a Grand Prix award in three categories simultaneously–direct, cyber and PR– something that had never happened before in the 50+ year history of the show.  And the campaign was from a Tourism Board…not a Fortune 100 company or brand.

If Twitter had 100 People…:  5% of the people create 75% of the Tweets

Lately there has been some good discussions about other companies acting like Venture Capitalists, especially ad agencies.  Personally I have major concerns if an agency starts acting like a VC, especially if they are investing in New Media companies.  The potential for conflicts of interest are huge.  First, theses agencies need to be media-neutral.  I need to trust my agency is making a recommendation that is best for my brand…not because their agency stands to profit through my support of a business they have invested in.  Second, they are funding those investments based on fees I paid them and then potentially profiting off media buys I make.  That makes me really uneasy.

However, I do think the future of the agency model could be in Shared IP and equity.  I have no problem with an agency working with a new/small brand and taking an equity stake instead of normal fees.  I think this is a great win/win since the brand saves money and the agency gets tremendous upside based on their work.   But if this new brand is a media property that the agency can then pitch to other clients, I get concerned,  My agency’s neutrality goes out the window and I end up feeling like my agency pimped me out.  Not a good place to be.

Now the people I do think have the right be investing in new media companies are the brands themselves.  A media buy from an established company like P&G can end up making a company.  I think back to the small buy I did with Secret on MySpace.com back in 2004.  My counterpart at MySpace said that because of that deal and the media coverage we generated from it, he ended up getting over 50 calls from major brands who before wouldnt even return his call.  Think if instead of a media buy, P&G had made an equity investment in MySpace?  We would have ended up with a major return on our money when MySpace sold out to News Corp.  Plus, many start-ups could benefit tremendously from the brand building knowledge that a major CPG could bring to the table.  Plus it has an employee benefit because marketers could take a “broadening assignment” to go work at the start-up for a year or two.  They would get a chance to scratch their entreprenuerial itch without leaving the CPG company.  That is a major HR win to keep top talent happy.

Now obviously there are drawbacks here.  First, CPG companies aren’t experts in the world of VC investing but that could be solved by partnering with a leading VC.  Second, a company like P&G investing in a company could potentially keep competitors from buying media on that site.    Third, almost all major CPG’s are publicly traded companies and VC is a hit or miss industry.  But then again, technology companies like Dell are publicly traded but they have been investing in start-ups for years now (though Dell Ventures did close after a few years).

The way I see it, there is tremendous upside for a major CPG company to partner with VC’s in the start-up game….but tons of downside if our agencies are acting as the VC’s instead.