The UK’s Advertising Standards Authority dealt Mondelez International a blow today (26 November) when it found the group’s YouTube ads breach the country’s advertising code. The ruling is significant for the snacks giant given the recent video-streaming drive it hopes will position it as a “digital pioneer”. Mondelez is nevertheless wise to forge ahead in its bid to connect with consumers online, Katy Askew suggests.
The Internet. It has changed the world. The way we communicate and interact with each other is unrecognisable from just 15 years ago. My generation is unique: it straddles a period that, in the fullness of time, will undoubtedly be attributed the same significance as the Industrial Revolution is given by today’s historians.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
As monumental as this shift has been, the pace of change seems to be stepping up with the proliferation of mobile technology. For FMCG marketers, Facebook, Twitter and YouTube are king. But, in this brave new world, CPG brands are struggling to keep up.
Mondelez International is working to position itself as a “pioneer” in the use of digital marketing. As part of this drive, last month the company entered into an agreement with Google that will see it further shift its advertising spend to online video platforms.
Under the deal with Google, Mondelez has made a “substantial global upfront advertising commitment” and the company aims to move 10% of its global ad budgets to online video in 2014.
This strategy mirrors the movement of global consumers’ viewing patterns. According to Nielsen, Google-owned YouTube reaches more US adults aged 18-34 than any cable network and 80% of YouTube traffic comes from outside the US. Significantly, according to YouTube, mobile makes up almost 40% of the website’s global watch time. This represents an unparalleled opportunity for branded manufacturers to connect with key demographics.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataAs part of its online marketing drive, Mondelez is piloting a new model of high-quality, low-cost video content featuring “influential digital stars”.
Announcing the move, Bonin Bough, VP of global media and consumer engagement at Mondelez, said: “Online video is crucial for our brands as it enables us to achieve higher unduplicated reach and ROI. By shifting more of our spending to online video, we’ll significantly increase our ROI and this will help fuel growth for our power brands.”
As upbeat as Mondelez is on the prospects for online video marketing, in this shifting landscape a number of challenges remain, not least the regulatory framework in which digital marketing innovators operate.
The lines between “organic” and “sponsored” online content have become blurred. An adjudication released today by the UK’s advertising standards watchdog made it clear the country’s regulators believe this is unacceptable.
Mondelez released five YouTube videos where the company sponsored vloggers – those “influential digital stars” the company was so keen to link itself with – to promote Oreo biscuits. The idea was to connect with target consumers in an engaging, funny, natural way. The problem was the way these videos were presented obscured the fact they were actually paid-advertising material.
The video content was challenged by a BBC journalist who questioned whether the ads were “obviously identifiable” as marketing communications.
In its response, Mondelez argued the standard practice on YouTube was to put an acknowledgement in the description box. The company’s own internal policy also called for an in-video acknowledgement.
The ASA, however, decided that was insufficient. The watchdog stated: “The CAP Code required ads to be obviously identifiable as marketing communications. We considered that this should apply to the general audience of the ad and considered that, given that these ads were on online video channels that were usually editorial based, the commercial intent would have needed to be made clear before viewers engaged with the content.”
The ASA said the ads must not appear again in their current form. “We told Mondelez to ensure that future ads in this medium made their commercial intent clear prior to consumer engagement,” the regulatory body said.
Speaking to just-food today, a spokesperson said: “Because we are committed to truthful, responsible and clear marketing we’re disappointed by the recent ASA ruling on the Oreo vlogger videos. However, we accept the ASA ruling and will ensure the adverts will not appear in their current format again.”
The move to online marketing content is a glacial force – something all food industry marketers will have to embrace. Mondelez is right to forge ahead as it attempts to build brand equity and create connections with consumers. But, as with any trailblazer, the company has found the path is not clear-cut. The ASA’s ruling is something of a setback – but far from an insurmountable one.
