The Importance of Speed And Agility in Advertising Claims Management
My guess is this headline may have caught the attention of many of you as a familiar line from a movie from your formative years. For others, Top Gun may not be as recognizable, but there is a sequel coming out next year. No matter which camp you fall into, that’s what I want to talk about - the need for speed. Specifically, the need for speed in advertising claims management.
When I say speed, I’m not only talking about the time to get from point A to point B, I’m also talking about agility and flexibility. Yes, getting new claims from ideation to market as fast as possible is important, but so is the ability to pivot quickly when regulations or market conditions dictate - whether making changes to a claim, pulling a claim from market rapidly to avoid repercussions, or expanding or contracting claim usage across channels and geographies based on shifting risk levels. While one could argue that these capabilities have always been important, now more than ever speed and agility around advertising claims will define the winners and losers.
So what’s changed? I believe there are 3 dominant structural changes that are driving a heightened focus on speed and agility in advertising claims management.
- Scrutiny of advertising claims is at an all time high.
- Advertising claims are becoming more complex.
- The pace of innovation and marketing has accelerated.
Regulators, in part bowing to the will of the consumer, are also becoming more active around advertising claims and ingredients. Just recently, the FDA has more aggressively investigated heavy metals in baby foods, which many parents assumed wasn’t a problem by virtue of organic or natural claims; the EU has pushed forward with the next phase of the Dual Food Quality legislation to protect consumers from products being labelled the same despite different ingredients; the Personal Care Products Safety Act was put forth in US congress, the latest in a string of bills aimed at enabling the FDA to more closely regulate cosmetics and personal care products; and California issued three times the number of food and beverage and supplement related Proposition 65 notices during 2020 vs 2019 (Perkins Coie).
Finally, companies are always on the lookout for claims that may draw consumers toward competitive brands. This has always been the case, however with more companies competing for the same share of wallet (more to come on his below), any threat must be taken seriously. So companies may jump to challenge a claim they may have let slide a few years ago.
2. Advertising claims are becoming more complex. This is particularly true in both food and beverage and cosmetics and personal care in which new functional ingredients such as nootropics, CBD, adaptogens and others are enabling claim types that are new to many categories. It’s now common for foods to carry health and wellness claims around anti-inflammatory benefits, immune support, or gut health. And even giants like PepsiCo are getting into the game with their Driftwell drink which contains L-Theanine to promote relaxation.
If your company isn’t developing a strategy behind sustainability, you better get moving. According to recent Capgemini research, 80% of consumers globally already have or may change their purchase habits to favor environmentally and socially responsible products. It’s not just consumers who expect to know how a company’s products measure up with respect to sustainability, many countries are getting closer and closer to mandating such disclosures through legislation.; And we’re not just talking about carbon emissions, we’re talking about all 17 of the UN Sustainable Development Goals with 169 separate targets - very few of which have standardized methods for substantiation. These are claims, and they are very complicated.
Finally, third party certifications are becoming increasingly important across a number of categories. Consumers use these certifications to help make their product choices easier. These are claims - they require substantiation, even dossier submissions, they often vary by country or region, they can be retailer specific, and they are constantly evolving. Tracking third party certifications and making sure they appear only on approved products in your portfolio is a serious undertaking.3. The pace of innovation and marketing has accelerated. Advertising and product claims are what enable these two business priorities. Consumers expect companies to deliver products that keep up with their rapidly changing tastes. Timelines for new product launches in CPG have gone from two to three years to under one year in many cases - and to some extent it’s a numbers game. The more at-bats you have, the more likely you’ll be to hit a home run. General Mills recently came out and said that speed, not perfection, is central to their innovation strategy.
The pressure behind these accelerated innovation timelines is in large part driven by the extent to which digital and social distribution and marketing channels have levelled the playing field for new market entrants. Gone are the days when only large players could afford slotting fees for shelf space and costly media buys. Nowadays a small player, often digitally native, can become a formidable competitor overnight. This is the case across categories, from apparel, to cosmetics, to personal care and even food and beverage.
And the proof of this shift is plain to see. In IRI’s recent announcement around the 2020 class of Pacesetters, defined as the top 100 new product launches in the channels IRI tracks, indicates that only 22% of pacesetters were from large companies with revenue greater than $6B. The rest were from smaller, agile competitors. To thrive in today’s marketplace, all companies need to launch new products quickly, and bring new claims and messaging to market to seize brief windows of opportunity in social and digital media.
The past decade has seen dramatic changes in market dynamics across categories. These changes in many ways seem to be accelerating. The process of creating and managing advertising and product claims can no longer be considered a cost center focused on compliance. Claims are the lifeblood of innovation and marketing, and speed and agility are essential. Far from being a cost center, claims management must be considered a competitive advantage and a critical capability for driving topline revenue. There is truly a need for speed.
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