Green Marketing: What Works; What Doesn t. A Market Study of Practitioners

Transcription

1 Green Marketing: What Works; What Doesn t A Market Study of Practitioners

2 Green Marketing: What Works; What Doesn t A Market Study of Practitioners 2009 Environmental Leader LLC and MediaBuyerPlanner LLC. All rights reserved. Published by Watershed Publishing. To purchase your copy or acquire a data license, please visit

3 Table of Contents 1. Executive Summary 5 2. How to Budget for Green Marketing Is Green Marketing Really Effective? Green Opens Opportunity for Smaller Firms Management Agrees on Marketing Effectiveness; Ops More Negative How to Track Green Marketing Effectiveness What Are Firms Spending On? Many Already Have Created Green Websites, Engaged in Education Efforts Target Audience Future Spending on Green Marketing Online Marketing Spending Control of Green Marketing Who Controls Green Marketing? Regard for Green Marketing: High or Low among Decision-makers? How Green Marketing Control Relates to Marketing Budget Current Green Practices and Perception of Greenness How Green Are You, Really? Will People Pay More for Green Products? A Note on the Impact of Culture and Personal Opinion on the Study 28

4 7. About the Survey Case Study: HSBC No Small Change Campaign Case Study: USPS Direct Campaign Case Study: Timberland Earthkeepers Makes Impression Case Study: Aveda Ramps Up Engagement for Earth Month 48

5 1. Executive Summary Marketers recently turned very strongly to green marketing tactics as firms look for green business partners and businesses jump on the corporate social responsibility bandwagon. Companies tout their sustainability efforts, flaunt the responsibility of their products and practices, and engage in other green marketing methods. But does such marketing really work? Perhaps more interestingly, do marketers really expect such practices to work, or are they engaging in green marketing simply because they think consumers expect it of them? Will green marketing practices become a staple of every good marketer s toolbox, or is it a fad that will fade away in short order? The trade daily Environmental Leader and marketing trade publication firm MediaBuyerPlanner partnered to find the answers to these questions by studying the audiences of five industry publications. For the most part, marketers are engaging in green marketing because they perceive it has value. In what may come as a surprise to marketers a group sometimes defined by a level of skepticism the results of the study indicated that, for the most part, marketers are engaging in green marketing because they perceive it has value. 33% of respondents said green marketing was more effective than their normal marketing efforts, with just 7% saying it was less effective. The remainder either did not detect a difference between their regular marketing efforts and their green efforts, or did not know which was more effective. The large proportion of marketers not yet having enough experience to make a call on its effectiveness, coupled with the high relative positive perception, may indicate that green marketing s time in the sun is closer to the start than to the end. [Chart 1] Companies that view themselves as the most green spend the most on green marketing, while those that see themselves as least green spend just a fraction of their marketing budgets on such tactics. This indicates that marketers are backing up their beliefs of the company s level of greenness with marketing campaigns, rather than creating green campaigns to be part of the trend, or more cynically, PAGE 5

6 to deliberately shore up a known weakness. Value of Green Marketing Furthermore, the research suggests that management first buys into greenness and, later, green marketing, rather than beginning green marketing efforts simply out of a desire to appear green. 33% 7% 22% 60% Interestingly, most firms indicated that they were in the somewhat green to very green categories, but they tended to believe their customer base thinks them less green than they really are (71% who think themselves somewhat or very green, compared to 67% who think their customers view them as green). This gap, while small, is persistent among the respondents, and may indicate why green marketing is on the rise. The indication that green marketing is likely not a fad, frankly, surprised us. When staff from the various participating publications especially those hailing from ad agency backgrounds opted to poke into the subject of green marketing, most felt a certain amount of cynicism, expecting to see similarly cynical opinions among the surveyed marketers. With that in mind, we set up the survey with certain traps built into the questions, to see if the industry would reveal the skepticism some of us felt. That we didn t see the level of cynicism we expected surprised and intrigued us: Who are these marketers? Which of them shared our early doubts? Why do they plan to increase their green marketing spending, particularly since most don t accurately measure whether green campaigns are more or less effective than their general marketing campaigns? The long-form survey results and analysis answers these questions, and raises a few additional ones along the way. Here are some of the key findings explained in the study: 0% 20% 40% 60% 80% 100% More Effective Less Effective Same or Don't Know 1) Most Marketers Intend to Spend More on Green Marketing More than 80% of respondents indicated they expect to spend more on green Chart 1 PAGE 6

7 marketing in the future. Among manufacturers, that number is significantly higher. At least half, if not more, of respondents plan to engage in online marketing efforts in the future. [Chart 2] More Spending on Green Marketing? 18% No Yes 2) Marketers Believe Green 82% Marketing More Effective, Not Less 28% of marketers themselves think green marketing is more effective than other marketing messages, compared to 6% of marketers who think it is less effective. Management is even more optimistic, with 46% of them indicating a belief that green marketing is more efficacious. Just 23% of folks in operations think green marketing is more effective. Chart 2 3) Smaller Firms Spend More Companies with smaller marketing budgets tend to spend more on green marketing. Firms with a marketing budget of under $250,000 spend just over 26% on green marketing, while those with budgets of more than $50 million spend 6% on green marketing. 4) Internet Tops Green Marketing Media By far the most popular medium for green marketing was the internet, with 74.2% of respondents having spent money online, followed by print (49.8%), direct (40%), outdoor (7%), radio and TV (7%) and mobile (6%). 29% of marketers with budgets between $10 million and $50 million, and 25% of those with budgets of more than $50 million, used outdoor, compared to 7.3% for all marketers. Mobile was also a popular medium for marketers with the highest budgets: 14% of those in the $10 million to $50 million budget category, and 16% in the more than $50 million budget category have spent money on mobile, compared to 6% for all marketers. [Chart 3] 5) Green Marketing Is More Effective than Some Marketers Think Those firms that used the most trackable media are also those that said green marketing worked better than the average marketing message. 48% of respondents who employed direct marketing in their media mix said that it was more PAGE 7

8 or much more effective, much like those who used internet (43%). That contrasts with those respondents who had employed TV, 25% of whom said it was more effective than average. This indicates that green marketing works better than those who don t or can t measure results think it does. Mobile 6% Direct Print Internet TV Outdoor Green Media 6) Marketers That Track Marketing Spend and Its Relation to Sales Believe People Will Pay More for Green Products Radio 7% Similarly, when asked if customers would pay more for green products or to a green company, it was the direct-oriented media that showed the more positive results. Of the people who used the two least trackable media, TV and outdoor, only 29% and 25% respectively indicated that customers would pay more. That compares to 44%, 42% and 46% for internet, print and direct respectively. 7) Larger Companies More Likely to Target Employees Rather Than Customers Companies with media budgets of more than $10 million annually showed a much higher proclivity to have their own employees as their target audience. In fact, that was by far the most popular green marketing target for those firms, with customers being targeted in about 70% of their efforts. Firms with budgets less than $250,000 were about 80% more likely to target customers directly, and only about half targeted their own staff. 8) Marketers and Management Say Marketers Have Control; Ops Says No 50% of marketers themselves indicate they have complete or consultative control of green marketing, while 57% of PR folks say that have control of the sustainability program. Sales and operations, on the other hand, are skeptical that marketers have so much control of the sustainability programs, with just 41% and 21% respectively saying control lies in the hands of marketers. However, those in management tended to agree that control of the sustainability program is in the hands of marketers, at 50%. 9) Firms Already Taking Active Steps to Become Green In terms of actual green actions, about half of companies reported that they are 7% 8% 40% 50% 75% 0% 20% 40% 60% 80% Chart 3 PAGE 8

9 consciously taking steps to become more green. The most popular actions are conserving energy in operations, at 59%, and changing products to reflect greener values (such as changing ingredients, packaging or intended use), at 54%. 10) Smaller Companies Think Green Marketing Is More Effective than Larger Companies Nearly half of respondents said the decision-makers at their companies hold green marketing in high regard, compared to just 15% who said decision-makers hold it in low regard. Companies with decision-makers who have a low regard for green marketing tend to be those with the larger marketing budgets, especially in the budgets between $10 million and $50 million per year, where more than a quarter indicated that their decision-makers held green marketing in low regard. This indicates that smaller companies may believe green marketing to be more effective than larger companies do. 2. How to Budget for Green Marketing The 316 executives who completed the survey revealed that their firms spend an average of about 20% of their overall marketing budgets on green marketing. But this number varied wildly, with some companies spending as little as 1% or 2% (or none at all), and other companies spending 75% or more. Weighted by amount spent, the average marketing dollar was likely to be split with a smaller portion sent to green marketing efforts. Specifically by sector: Those in the manufacturing sector spend an average of 18% on green marketing Those in professional services spend 19% on green marketing Retail spends 21% on green marketing Internet/other media spends 21% on green marketing Ad agency/marketing firms spend 20% on green marketing Companies with smaller marketing budgets tend to spend more on green marketing: Those firms with a marketing budget of under $250,000 spend just over 26% on green marketing Firms with budgets under $10 million spend an average of 9% on green marketing PAGE 9