A note to marketers: Go back to basics.

A new study has found that packaged-goods manufacturers are overspending on Web sites by providing features that people don't want. Meanwhile, such companies are missing the prime advantage of the Internet -- the chance to get customer feedback on their products.

It turns out that customers want plainer sites that let them rate brands and product features, according to market-research firm Information Resources, Inc. (IRI).

Excerpted from The Wall Street Journal, April 20, 2001

Groundbreaking New Study
Manufacturers are grappling with how to most effectively leverage the Internet to market and sell CPG brands. Management is seeking justification for resource allocation. And the lack of measurement tools, online consumer research and benchmarks greatly hinders effective decision-making and budget justification.

For these very reasons, IRI recently embarked on a groundbreaking proprietary study of online consumer behavior and preferences to help CPG companies maximize the Internet's potential. The study included a survey of nearly 8,000 online consumers and interviews with 80 executives, and analyzed three primary CPG Internet activities:

• Brand Web sites
• Online advertising, promotions and email communications
• eRetailing

Key Findings
This IRI study uncovered valuable insights across all three primary areas of study useful to both manufacturers and eRetailers.

Brand Web Sites

Among the findings in this area, the study revealed that manufacturers' branded Web sites often over-deliver on features consumers care little about, yet under-deliver on opportunities to capture valuable - and free - consumer feedback.

A Key Learning:

• Thirty-eight percent of manufacturers' Web sites offer games and activities and 41% feature lifestyle information. The survey showed that only 12% and 27% of consumers, respectively, want such offerings; clearly identifying an area for cost savings for manufacturers.
• On the other hand, 74% of consumers surveyed are willing to provide product satisfaction feedback at a Web site, and 50% are agreeable to answering questions about their product needs and preferences, while only 38% and 31% of manufacturers, respectively, are asking for such information.

Online Advertising, Promotions and email Communications

Overall, IRI's study revealed that consumers are aware of CPG online communications but don't find value in what manufacturers are delivering.

A Key Learning:

• 38% of manufacturers are using banner ads as part of their online marketing mix, while only 5% of consumers find such ads appealing.
• The reverse is true for product sampling. Sixty percent of consumers feel product samples are an appealing marketing tactic, yet only 19% of manufacturers are using them.

eRetailing

Despite recent failures among CPG eRetailers, the survey revealed that the Internet still holds potential as a sales channel.

A Key Learning:

• Twenty three percent of online consumers have purchased CPG products in the last three months.
• One-third of online consumers expect to spend more than 25% of their CPG budget online this year.

Measuring ROI is Critical
An overarching theme discovered throughout IRI's study was the need for CPG manufacturers to establish measurement criteria so they can calculate ROI form both brand Web sites and online advertising/promotions. Less than one-third of manufacturers surveyed for this study calculate ROI from either of these areas.

Now available in the U.S., IRI's eMarkit service was developed to help CPG companies optimize Internet marketing and sales efforts with quantifiable ROI for every marketing program they deliver. Click here to request more information on IRI's eMarkit services or our comprehensive study What¹s Not Clicking for Manufacturers, Retailers, and Consumers.