Danone’s 2024 Media game plan: AI, alliances and accountability
It’s only a few weeks into 2024 and it’s already shaping up to be one of the most dramatic. By the time this year is over, granular tracking might be as extinct as a dodo, the Western world could be scratching its head over transatlantic election fallout, and AI will be wreaking havoc like a bull in a China shop. The business world is in for a wild ride, and Danone’s global head of media and brand communications, Catherine Lautier, spills the beans on how they’re staying one step ahead of this whirlwind of change and chaos.
The following conversation has been lightly edited for brevity.
2024 is going to be a rollercoaster ride for a lot of advertisers. Is Danone strapped in and ready for all the twists and turns coming its way?
Over the last couple of years we’ve been on a journey with a new CEO and a new strategy called “Renew Danone,” which has seen us reinvest in our brands. As a result, last year was really a year of reinvestment for us on the media side, which we increased by 20%. We did this during a crazy year of inflation for a lot of categories including food, and it worked because of how strong our brands are. It allowed us to pass price increases on to them without negative consequences on our volume. We gained the confidence of our investments because of that strength. Speaking of inflation, we’ve also been able to contain the impact of it on media pricing. This was thanks to the new partnership we’ve built with our new [creative] agency set up as well as how we consolidated our media agency investment.
Let’s come back to that final point on Danone’s agency relationships. What’s changed there?
There’s a really mundane, but very important, aspect to it, which is price commitments. There’s still value in having an agency of record that really helps you consolidate the volume you need and the price commitments you need. That said, while we were looking for a new agency we rethought our remuneration model to make sure we were getting the right level of strategic support. We didn’t want those fees to be just representative of our media buys. Instead, we wanted to have the right expertise in areas like communication, planning and strategy and data and analytics, so we set up centers of excellence globally that our people can get support on things like retail media and data — areas that they may not be able to find on their own. That’s been really successful as has outsourcing areas like ad ops.
Let’s dig into how you think about media. Digital media can be and do almost anything a marketer wants it to be, so long as the related advertising products have been appropriately adapted and features such as measurement are appropriately developed. Is that something you’re thinking about as you optimize budgets, and ultimately how you shift spending between different suppliers of advertising inventory?
There’s no clear distinction between TV and digital anymore. For example, we’ve almost completely disinvested from linear TV in the U.S. I try not to be dogmatic about it [media channels] because we have such a variety of geographies in our portfolios that have wildly different media landscapes. I said what I said about what’s happened to our investments on linear TV in the U.S., but in a market like Indonesia or Mexico, which are both very important to us, linear TV still plays a big role. Ultimately, it’s all about reach and frequency and constantly driving penetration with low frequency buyers who are new to the category.
The real challenge lies in creating loyal fans who consistently contribute to reach and frequency, attracting new customers to the brand. However, gauging the overall impact of your reach and frequency remains complex.
In fact, it now demands more effort than ever to have the necessary data and analytics in place to continuously bring new customers onboard. This is why I’m particularly enthusiastic about retail media, despite the market fragmentation it brings, making it harder to achieve a consistent return on frequency. Despite all of that, within a retail media partnership, we can precisely target specific consumers who are likely to show interest in the category.
For me, this aspect is intriguing. The level of targeting we achieved with [third-party] cookies in the past never matched this level of behavior-based precision.
Seeing as how you mentioned retail media first let’s switch gears. What’s your view of a market that was once just another name for Amazon’s ads business?
Let me clarify, I still consider Amazon to be the most influential retail platform for marketers due to its robust data capabilities. In many ways, it’s the most simple place for us to invest. As for the rest of our retail partners, well it’s a new type of relationship we’re having to work through.
Internally, we face the challenge of budget allocation, which can sometimes fall under the marketing department and at other times under sales. This division makes it difficult to align everyone, whether they work in e-commerce, data, marketing, or sales, to ensure we’re optimizing our budget investments with our retail partners.
When we get those calls right it’s really powerful because it enables us to achieve closed-loop attribution and target new consumers for our brand, and even within our category. The scale we can achieve here through second-party data from retailers is far bigger than what we can do with our first-party data in other media areas.
What about those internal issues you mentioned?
We’re working on really pulling it together. One of my challenges is educating our teams internally because our first reflex here is to think that retail media is an e-commerce driver, which it is, but it’s also so much more. It’s about brand-building and covers the full funnel of a media plan, so it should be something that’s bought by media experts. It’s for those experts to evaluate the value of the data to help us in the negotiations with the retailers. To do that, it takes a lot of breaking down silos internally, which is what we’re currently working on.
Given it was Davos last week, let’s talk about, let’s talk about turning corporate responsibility claims into reality?
I fought very hard to create a responsible media and advertising roadmap for our media and product advertising teams. This roadmap encompasses various key pillars, including brand safety, marketing to children, support for journalism, diversity and inclusion, data and analytics, and sustainability. We have well-defined strategies for each of these pillars.
For example, we have a policy in place for brand suitability plans that involves utilizing Integral Ad Science. We’ve also invested in Teads to promote responsible journalism. One aspect I’m particularly proud of is our commitment to allocate a portion of our media investment in the U.S. to support Black-owned, LGBTQ+, women-owned, and Latin-owned media. This commitment extends to working with influencers who represent the consumers we serve. As a best practice, we are actively working to scale this initiative in the U.K. and Canada.
You said you had to fight hard for a lot of that, can you talk through what turned it in the end?
Sometimes, it’s just as simple as doing the tests and showing the data from it. On the advertising side, for example, I wanted to test our ads to try to evaluate how we were doing from a D&I perspective when it came to representing our consumers in a positive way, or in a way they could relate to. I really struggled because the methodology didn’t exist so I had to spend a lot of time developing it with Kantar using the different criteria from the ANA, the Unstereotype Alliance and more to create something that I thought captured all the dimensions I needed. Once we got to that point, we were able to do the demonstration internally to show that we still had progress to make in terms of making sure our ads were relatable for all our consumers and portrayed all of our consumers in a positive way.
It would be remiss if we didn’t mention AI.
I’m really excited about AI, especially as a marketer, but my enthusiasm comes from various aspects of my role. At Danone, I don’t just oversee media; I also manage creative agencies, design marketing operations, licensing, digital content production, and PR. AI holds tremendous promise in the realm of digital content production. It’s particularly exciting for automating tasks in areas like e-commerce and social media asset creation. Previously, we faced challenges automating dynamic creative optimization and achieving precision marketing at the level I wanted. With the integration of AI, these challenges are resolving themselves. AI can automatically generate personalized ad versions, allowing us to create personalized consumer journeys in advertising and online content. That said, we’re still in the learning phase. The next step involves evaluating how AI impacts our media buying strategies in the future.
Given its having such a profound impact on the way Danone runs its marketing, are you thinking about what this means for the agencies you work with?
We’re already using AI in our digital content advertising work through our partnership with Brandtech Group. Their collaborations with the generative AI platform Pencil and the Oliver agency have changed the way we scope work with [the latter]. While we’re just beginning to explore the potential of AI in my media agencies, particularly in areas like dynamic creative optimization and precision marketing, I’m convinced that AI will not only enhance our efficiency but also ignite our creativity and strategic thinking. This excites me the most. AI can certainly handle mundane tasks, but it can also challenge us to be more strategic, whether by questioning the resonance of our insights with consumers or even generating those insights in the first place.
On a broader scale, I’m actively involved in a task force representing marketing and a company-wide initiative to understand the implications of AI. We recently published our first internal AI policy, which resulted from a collaborative effort involving various departments, including legal, research and innovation, IT, and marketing.
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