Editor's note: The Supply Side series, produced by our content partner The City Wire, focuses on the nearly 1,300 suppliers who have set up offices within a 27-mile radius of Wal-Mart's home office in Bentonville, Arkansas.
Social media continues to turn the entire retail and supplier world upside down and is fundamentally changing the way the sector markets and promotes itself to shoppers.
Placing products on shelves at Wal-Mart, Walgreens or any other retailer is barely half the battle for suppliers toting even the iconic brands like Nestle, Tyson Foods, Glidden or Orville Redenbacher. Just being on a shelf doesn’t promote brand loyalty or drive higher sales, which is why these companies choose to work with Collective Bias, a content marketing company based in Bentonville.
“Shopper marketing at its core is based on the relationship between brands and shoppers,” said John Andrews, co-founder and CEO of the company. “Collective Bias has used this theory to develop a successful community of brand ambassadors, influencers and social media enthusiasts who are changing the way these brands connect with consumers. This relationship-focused community has allowed us to emerge as a pioneer in this newly developed industry.”
At its core, Collective Bias hopes to help its customers experience sales growth by winning the hearts and minds of potential shoppers through social media influence or healthy gossip. Think of it as recruiting a chorus of public voices to sing in harmony about a particular brand. Research shows this is more compelling than anything a company is saying about their own brands.
Andrews says his firm uses a proprietary “social fabric,” which is a vetted group of more than 1,300 shopper influencers scattered across the country. This group creates authentic content – stories, photos or videos – about the brands everyday people are already using and love. Collective Bias then matches those genuine stories with their growing customer base. That brand-relevant content is then shared via multiple social media platforms to reach more than 40 million viewers and potential shoppers, hoping to drive sales and create heightened brand awareness. This network of bloggers does receive compensation for their contributions.
Early indications say this business model is garnering measurable success. After opening in mid 2009 Collective Bias has created 52 jobs to handle the firm’s growing customer base. They have retained brands such as Heinz, Sears, Disney, Johnson & Johnson, Elmer’s and Colgate for a variety of marketing tasks including seasonal promotion, in-store demo support, new product launch and shopper insights.
“There really is no better place for Collective Bias to headquarter, than the retail hub of Bentonville. The bulk (40) of our employees are here. We do have satellite offices in other smaller supplier hubs such as San Francisco, Chicago, Minneapolis and on Madison Avenue in New York City. We also recently added a position in Cincinnati, in hopes of picking up some supplier clients there,” Andrews said.
Collective Bias is part of a rapidly growing business demographic in Northwest Arkansas – companies who furnish services to the thousands of product suppliers for Wal-Mart and the retail world in general. But Collective Bias also works directly with retailers to support seasonal promotions and has put together a lean team with true inside knowledge.
Andrews started the ElevenMom’s program when he was hired as senior manager of Wal-Mart’s emerging media in 2007. The program was a blogging community of real moms sharing true stories about their Walmart shopping experiences. The retailer continues to use the program under the title “Walmart Moms.”
Prior to Andrew’s two-year stint at Wal-Mart, he worked in brand marketing directly for Sara Lee, Newell Rubbermaid and Eastman Kodak.
Andrews said in 2009 his co-founder Amy Callahan, who was working at Mars Advertising at the time, came to him with a job proposal.
“I told her I really didn’t want to go into the agency business but we talked about perhaps spinning off a new model that concentrated specifically on this idea of genuine content media supplied by a vast network of real people,” Andrews said.
RELATIONSHIPS, GROWTH FUNDING
Callahan cut her teeth in Northwest Arkansas’ supplier community. Her dad founded a vendor office here and she spent several years working in the supplier community calling on Wal-Mart for Newell Rubbermaid. She also created promotional strategies for Club Marketing Inc., servicing Sam’s, Costco and B.J.‘s.
Several other management staff at Collective Bias spent time at Wal-Mart Corporate or the local supplier community. Andrews admits that the extensive relationships give the company instant credibility and often a competitive advantage. The Collective Bias team also includes several interns – mostly recent college graduates with expertise in technology, social media and marketing.
Ken Barnett, CEO and owner of Mars Advertising, was the original angel investor for Collective Bias and allows the company to operate satellite operations within Mars’ offices with the exception of Bentonville and New York. Collective Bias initially set up shop inside Mars’ offices, but the firm outgrew the space and now has two adjacent buildings in downtown Bentonville and is already eyeing a third.
Rapid expansion requires capital, and Andrews said the firm is reviewing its options for additional funding because of those growth plans. He believes funding will come in the form of additional angel investors. He didn’t rule out the possibility of the company going public. In recent months the firm has met with investment bankers about that possibility.
In just three years, Collective Bias has grown annual revenue to $10 million with ambitious plans exceed $20 million in 2013.
Thomas Jensen, University of Arkansas professor and Wal-Mart Lecturer in Retailing, says Collective Bias is scratching the surface in terms of its potential.
“All of the traditional advertising agencies are moving in this direction, the larger ones are doing it in-house and smaller ones could very well partner with Collective Bias on certain jobs in the future. The interesting aspect of Collective Bias is they are just focusing on this one aspect of the marketing portfolio – generating media content from real life experiences – in hopes of growing brand loyalty and driving more sales. They clearly have a first mover advantage here,” Jensen said.
Nielsen data confirms consumers are relying more on word-of-mouth in the decision-making process either from people they know; or online consumers they don’t know personally. This has been made possible by a plethora of consumer-generated media spread through social platforms, according to a Nielsen report in April. The consumer research firm surveyed 28,000 internet respondents in 56 countries and found 92% do trust the recommendations from friends and families, above all other forms of advertising. The trust percentage has grown 18% since 2007.
But the survey also found online consumer reviews were the second most trusted source of brand information and messaging. A whopping 70% of global consumers said they trust messages on this platform, even though they don’t personally know the content author. This level of trust increased from 55% in the past four years, according to Nielsen.
Jensen said companies know they must incorporate social media into their marketing plan, but the dynamic is changing at such a rapid pace it has become a major disruption. That’s where companies like Collective Bias have found niche opportunities to help.
It doesn’t matter if it’s Tyson Foods looking for retail support of certain products or Glidden trying to sell more paint at Walmart, Collective Bias can activate key demographics from within its expansive social network of social bloggers. These shopper influencers then began weaving stories and photos that support those brands with measurable results: impressions or views; share of voice; added sales; wider brand recognition and loyalty.
Mary Tarczynski, chief shopper marketing officer at Collective Bias, heads up the company’s satellite offices from coast-to-coast. She says the “real-time aspect of marketing media has become the true differentiator.”
“In this information age content is king and it lives forever once published online, unlike in print media formats. The ability to harness the power of social media as this content is shared in multiples of thousands is incredibly exciting,” Tarczynski said.
The rise of social media has also created a transparency and is holding companies to a higher level of accountability with consumers and shoppers, she said.
“Consumers research everything online and there are both good and bad things being said at all time in various social media platforms. Companies have to proactively address those negative comments and latch onto as many of the positive comments as possible,” she said.
Collective Bias generates between 6,000 and 7,000 pieces of media content per month for its customers. The pieces include authentic stories people tell on their own and in photos, recipes and videos being shared through the company’s network.
The company works with Plano,Texas-based Mutual Mind to develop metrics that measure shopper marketing results so its customers can understand their return on investment behind their social marketing programs.
Andrews said Collective Bias is still evolving because of rapid change in the industry with respect to technology and shopper reach. He said the firm aligns more with shopper marketing than social media, and it’s definitely more content media related than pure advertising agency.
“The Collective Bias model is not only working, but working well enough to replicate in a highly competitive landscape,” Jensen confidently concluded.