P&G Works Hard to Clean Up Pampers Dry Max Mess
Companies have embraced social media Web sites like Facebook and Twitter as wonderful marketing tools, but these sites can also spark public relations nightmares.
Take the case ofProcter and Gamble'srecent product launch of its "Dry Max" Pampers. It's an $8.5 billion business, and when it was introduced in March, the hope was to push for more profit and market share.
The company used Facebook and other sites to promote the new diaper, which is 20 percent thinner than its predecessor.
"Social media is absolutely here to stay, and I think social media has a lot of real strengths that it brings,” said Jodi Allen, P&G's vice president of Babycare. "It allows us to engage with parents in a much more one-to-one personalized way, which is fantastic.”
But there is a downside.
"At the same time, it brings about all sorts of opinions," Allen added.
Soon after the product's launch, complaints emerged, except people didn't complain to an 800-number or write letters as they did circa 1982. . .or even fire off emails circa 2002.
Instead, they went to the Web—and specifically—to Facebook. Unhappy consumers began a social-networking movement with the expressed purpose of getting the old diapers back.
Several groups emerged, with the most organized one being titled: "Pampers Bring Back the Old Cruisers and Swaddlers." It is up to more than 11,000 members.
People posted their stories and even pictures of the sores and rashes that they claimed were caused by the new product.
Of course, there's no way to know what caused those rashes, and truly, who really knows the people behind the posts. But the movement gained enough traction to become a national media story, start a chain of class-action legal activity and prompt the Consumer Product Safety Commission to investigate. The CPSC findings are expected before the end of June, and the Commission tells CNBC that P&G has been cooperating.
In addition to working with the CPSC, the company has also invited "mommy bloggers" to visit the company to address any lingering fears.
P&G maintains that the product is 100 percent safe, and is continuing to publicly encourage feedback.
“They are just so unfamiliar with how to handle this stuff that they end up falling over themselves,” said Rob Frankel, a brand expert who says that overall, P&G has done a decent job of responding to this story. “Very often, they tend to kowtow to protestors, which now gives these protestors sort of an inflated sense of influence.”
There is truth to that. The organizers of the 11,000-member Facebook page admit to not having direct talks with P&G and referred CNBC to frequently asked questions. They also refused to come on camera.
"Be it bloggers or social media groups, they really aren't beholden to any sort of standards or accountability," Frankel says. "They can just launch and volley claims. If Procter & Gamble were to simply say 'okay, we hear ya', we're responding, what are your scientific claims? Show us what you got, and we'll certainly take them into consideration precisely because you are our customers.'"
But the question for now is whether those customers have abandoned the product enough to impact the bottom line. So far, it does not seem to be the case.
Since the product launch, P&G has seen an increase in both its sales and market share. However, one five-star analyst tells CNBC that despite the reported success, both metrics are below internal expectations.
One possible explanation could be this consumer backlash.
Conventional wisdom is that it’s a huge problem for P&G, but Frankel disagrees as long as there's no merit to the claims.
"When you do the math, very, very rarely do you see a social-media groundswell have a membership of more than a thousand, or maybe low tens of thousands of people who simply sign on, but aren't necessarily proactive," Frankel said. "In the scope of the mass market, where you're talking about hundreds of thousands or maybe mega-millions of consumers, that barely registers on the scale."
And the scale is huge. Last year, P&G had revenues of nearly $80 billion. Diapers were more than 10 percent of that. Right now, the company has several billion of these diapers in the open market, and for every person signed up for that one Facebook page against the new diapers, there are nearly 30 consumers who "like" P&G's Facebook page dedicated to the Pampers brand.
"We are not in the business in defending ourselves versus parents," said P&G's Allen. "We are in the business of sharing our story, talking about the safety of our product, engaging with parents and really listening to them, so I view this very much as working with parents and making sure we have open communication lines."