A couple of things going on at once - it's hard for old guard companies to compete in digital marketing because consumers are being trained to buy based on reviews, price, and delivery times more than brand. And when you're spending $100M/quarter over a dozen brands all digital marketing is going to be brand marketing.
It also raises a question about conversion being a lagging indicator here. It's possible after a few more months of lower spend they will start to see consumers pulling back.
Perhaps it's possible that digital marketing is not all that effective for commodity items?
I admit to having brand preferences for laundry detergent and garbage bags, though I like to believe (perhaps wishfully) they are a result of first-hand and family experiences.
Often it's a false economy. Dish detergent for example... the more expensive stuff is often far thicker concentrate and lasts many times longer than the cheap stuff.
Oh they care about the packaging, they care very much. They're doing price discrimination in stages:
The fancy toothpaste with the beautiful box comes from the same conglomerate as the cheaper one does. If you consider yourself hot stuff, you pick the fancy brand with the shiniest box. The middle class, humble folk pick the same product sans color whirl and foil insets on the box, but it's still Colgate brand shaving cream. None of that Value-By-Walmart crap for our house, no sir.
The in-store, value-add generic products look even cheaper and less attractive. My rational mind knows that Safeway doesn't own any shampoo factories, and Safeway Compliments brand shampoo comes from the same vats as the more expensive stuff on the higher shelves.
It's not like fancier graphics take more money to print. Rather, P&G, Tesco et al pay the designer to make the boxes look "cheap" or "expensive", so us suckers would opt for the more expensive option - and bring more revenue.
We are all suckers. I learned this like 10 years ago prepping for my economics admittance exam. Our house is still filled with brand-name items, because monkey be dumb.
As a control system engineer, I can confirm you're correct that store brand items are often made in the same factory, using the same equipment as brand items.
However in every factory I've worked in, there have always been differences in quality.
Active or expensive ingredients are reduced or replaced. Soaps concentration is lowered, butter and cocoa is reduced/replaced, less pulses(beans) or fruit in the tin, drained weights are lowered, quality control is not as strict, etc.
Regarding quality control - often factories would clean the line prior to running the high end product. Switching over to the cheaper product usually consists of switching the packaging out and topping up the supply with the cheaper product - no clean or flushing of the line. The first couple of items produced would be different quality to the rest of the batch.
You have to cut some corners to compete with big companies like p&g and Unilever. They're buying and producing much larger quantities of products than any generic brand.
Regarding cheap packaging - you pay per colour when printing. Printing materials can also be swapped out. Thinner plastic or card. Matt instead of high gloss.
A lot of people love brands and pick the one they last remember - which is why advertising is so powerful. It maybe sound cheesy/irrational/unbelievable but it's true and there are 100s of billions in market value built on it.
There is even a hidden logic to picking a brand product: when I recognize a brand, chances are high that if I had read something scandalous about that brand in the past I would not fail to make the connection. Whereas when I am looking at a noname with a "brand" as recognizable as an IPv6 address, there is no way I could make the link between product and something bad I might have read about it in the past.
"It's famous, I would have heard about it if they were all duds"
I actually do this, more or less, and consider it rational. For a large number of household goods, I really don't care about them past some baseline quality threshold. So if something worked last time and the price doesn't seem out of line, I'll use that. I generally don't remember brand names for most of these things, but generally can pick out what packaging looks like. And I'm sure advertising influences my first-choice and whatnot on the margin.
I'm sure paying attention would save some money, or, who knows, I might even be "delighted" by a "new" "product experience", but I'd rather just not think about it.
Better yet: seller that delivers to your local supermarket so you don't have to stay home and wait for them. In NL it's pretty much the preferred option for carryable items
at this scale their digital marketing is not your traditional performance marketing. traditional performance marketing would absolutely be worthless to a brand this big, but large ad buys ensure they stay top of mind for consumers in a (commodities) space where competition is more numerous than it is deep.
> It also raises a question about conversion being a lagging indicator here. It's possible after a few more months of lower spend they will start to see consumers pulling back.
Why would online lag be different from other media? It's unlikely consumers drop everything and stock up on Downy Fabric Softener after viewing the ad on TV or hearing a cheerful radio/podcast commercial.
The point is that old mass media ads are pretty much accepted as a bottomless pit with unclear outcome and that there is a whole industry specialising in independent result assessment.
Online ads promise perfect monitoring, but that is not only provided mostly by the advertisement channel provider itself (quite the opposite of independent) but also only useful for ads that aim for immediate reaction ("buy now!"), it does not tell anything about brand awareness effects.
I don't think that you are disagreeing with GP at all.
Bingo. No one rushes to the store to get Downy because of a Facebook ad, but they might start buying something else a few months later if another brand has been consistently hitting them with ads.
In my (anecdotal) experience a lot of people just go for the familiar brands when buying commodity products. Surely creating brand awareness must have some kind of effect.
It also raises a question about conversion being a lagging indicator here. It's possible after a few more months of lower spend they will start to see consumers pulling back.