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GAT: Meta on track to surpass all linear TV spend
In just a few years, ad revenues going to Meta – owner of Facebook, Instagram, and Whatsapp – could outgrow the entire global linear TV industry, based on current trajectories; the findings of a new Global Ad Trends report indicate changes to global advertising as social media stands to become the world’s largest ad channel.
WARC Media members can find the full report here
If you’re not yet subscribed to WARC Media, you can access a sample of the report here.
Why social’s supremacy matters
Global social spend is set to total $247.3bn in 2024, up 14.3% year on year, ahead of paid search. This could see it grow to become the biggest advertising channel by spend.
But that’s a tussle among the new giants. Perhaps the more consequential shift is that on current trajectory, just the adspend going to Meta alone is set to earn more than the entire global linear TV industry.
It’s a moment that would signal a changing of the guard, not only from old media to new, but from a significant plurality of companies making money from global ad growth to a consolidated market dominated by global tech players.
What’s behind this
Both Facebook and Instagram grew by more than 20% year on year in Q1 2024, and Meta is forecast to earn $155.6bn in ad revenue this year.
- Tools like Meta’s Advantage+, which automates aspects of creative and media planning, are increasingly popular with advertisers.
- Meta reportedly increased its ad load in Q4 2023 to 19.1%, with most Reels sessions now having seven or more ads.
Elsewhere in the market
- The +18.3% year-on-year increase forecast for TikTok in 2024 marks a significant slow-down from the 87.8% growth rate it clocked up last year, despite the introduction of new search and shopping ad formats.
- Pinterest is set to enjoy a 17.3% year-on-year increase in ad revenue in 2024, while Snapchat is forecast to grow 13.7%.
- X’s ad revenue in 2024 is predicted to decline by 6.4% globally and 5.1% in the US – but this appears to be stabilising.
Editor’s view
“Much of social media’s success has been driven by Meta’s remarkable renaissance. However, social’s stronghold on budgets can also be seen in TikTok’s rise, and a return to double-digit ad revenue growth at Snapchat and Pinterest.
“However, with this dominance comes challenges, such as rising advertising loads in social environments, and the impact of AI on media planning. In this report, we take a holistic view of the global social media landscape, which shows no sign of losing momentum” – Alex Brownsell, Head of Content, WARC Media.
Krispy Kreme targets physical availability
Alongside overseas expansion, doughnut brand Krispy Kreme is aiming to triple the number of consumer access points in the US over the next three years, with the great majority of those being McDonald’s restaurants.
Key figures
- The business expects to add 15,000 points of access in the US by the end of 2026, CEO Josh Charlesworth told an earnings call, up from 7,775 today.
- “We’re accelerating into more grocers and convenience stores,” he said. “We’re excited about our national rollout with McDonald’s, which is expected to add more than 12,000 new points of access alone.”
- And that strategy will also inform international expansion: “We have raised our long-term global points of access goal from 75,000 to 100,000 to improve the quick service restaurant opportunity,” he added.
- Upcoming expansion into Germany, France, and Brazil will provide opportunities for thousands more points of access; the brand expects to continue opening three to five new markets per year.
Why physical availability matters
For a fresh food product, being readily available to consumers is vital for growth. And Krispy Kreme sees additional benefits from its deal with McDonald’s – that “gives us the opportunity to add distribution at other major customers such as Walmart, which still only lists us in about 25% of their stores,” Charlesworth explained.
At the same time, the brand has been growing the digital channel, through its own app and by partnering with third parties. “It’s becoming a significant channel and a big growth driver,” Charlesworth noted .
Sourced from Seeking Alpha
[Image: Krispy Kreme]
What the Ozempic revolution could mean for brands
Modern weight-loss drugs are a radical solution to the global problem of obesity, but the nature of the drug suggests that there will be winners and significant losers, triggered by treatments like social media sensation Ozempic – and it’s an issue that marketers will soon need to address.
Why weight loss drugs matter to marketers
The revolutionary element of modern weight-loss drugs like Ozempic is how they simply reduce people’s appetites. There is some suggestion that the drug may also allay addictive behaviours while apparently modulating motivational dopamine systems. Nobody yet knows, but anecdotal evidence suggests that they are changing patients’ relationship with desire.
The impact of the drug has been felt in American celebrity circles where the expensive treatments have been accessible. However, such is the potential for the drugs to help reduce obesity’s impact on national healthcare systems around the world, it’s likely that the systems of desire have changed fundamentally.
How this affects the business of marketing, especially of high fat, salt, and sugar foods or addictive but legal products or services, is now a key concern of financiers and, increasingly, the company executives who must think about their responses to such a revolution.
What’s Ozempic?
Ozempic is the most famous of Danish pharma firm Novo Nordisk’s semaglutide drugs. Wegovy is the formulation specifically for weight loss.
- Originally a diabetes drug, Ozempic is an insulin regulator that also causes dramatic weight loss, by reducing people’s appetites while also slowing the rate of digestion to keep patients feeling fuller for longer.
- It exploded into public consciousness when several celebrities like Elon Musk credited the product with helping the SpaceX CEO shed 13kgs.
- In recent years, #Ozempic has blown up on TikTok to the point of causing shortages of the drug for type 2 diabetes patients to whom it is typically prescribed.
Picking winners
Wall Street hedge funds have been particularly captivated by the disruptive potential of the drugs, which has not only seen lots of money going to drug companies, but also to some likely winners. Losers, meanwhile, are seeing their stocks dropping.
Potential impacts could be that snack companies are likely to struggle in an impulse-reduced world – as Mondelez did when Walmart reported that Wegovy users were buying less food. Makers of drugs and services that cater to the obese have also seen negative market reactions.
But they go wider in their long-term implications: lighter passengers, for instance, would mean fuel savings for airlines. Longer lives could be a boon for travel and tourism as people would have more time to travel in older age.
The trick, some analysts and investors tell the Wall Street Journal, is that while HFSS categories are unlikely to disappear altogether, companies that are not set up to adapt will face huge and damaging pressure – “it’s about finding the weakest links,” said one hedge funder.
Bottom line
The full impacts of modern weight loss drugs are unlikely to be felt in the short term. Major changes at a population level will take a long time, but amid the possibility of reduced demand in the future and surging raw materials prices in the short term (certainly among key FMCG ingredients like cocoa and coffee), brands are in a tricky spot. Category and business model adaptability should be on marketers’ minds.
Sourced from The Atlantic, New York Times, WSJ, WARC
Occasion marketing for Chinese brands going global
‘Milestone’ moments like Christmas, Ramadan, Black Friday/Cyber Monday, and the Super Bowl are critical for brands seeking instant impact – in a new Spotlight on Chinese brands going global, WARC explores how to get involved effectively.
WARC members can read the four-chapter bilingual report in full here.
Why occasion marketing matters
There is no shortage of overseas marketing calendars in the market for Chinese outbound brands, but marketers must concentrate their efforts on key moments to avoid spreading resources too thin.
Typically, these calendars are listicles that name all the festivals and public holidays in a specific region; however, not every single one may be a crucial point in the marketing cycle.
How to engage
- The advice is to cultivate momentum with overseas occasions; don’t stagnate with just passive attention but introduce interactivity to generate “active attention”, salience, and memorability, even after the festival or event.
- Take part in regular reflections on how to leverage these occasions; avoid using Western holidays solely for promotional purposes. Without profound cultural insight, a Chinese brand risks being incongruent in a foreign market.
What’s in the report?
Tips for advertisers:
Assess the suitability of the occasion for your brand. Explore opportunities in lesser-known events and differentiate yourself from competitors. While discounts are common during such shopping sprees, ensure they enhance the value proposition rather than erode it.
Tips for agencies:
Assist brand clients in understanding diverse cultural insights and nuances, as well as how sociocultural shifts may have evolved the occasion over time. Develop comprehensive content that enriches the consumer experience, complemented by strategic search strategies to amplify reach.
Tips for media owners:
Provide deeper platform expertise to outbound Chinese companies less familiar with Western digital media practices, facilitating their integration into the market. Occasions coincide with periods of high media usage and data-driven audience insights into peak times and optimal content.
For more insight, WARC members can read the entire bilingual report.
85% of Gen Z Muslims want to try Islamic banking
Millennial Muslims and Gen Z consumers are keen to embrace Islamic finance as part of their banking, with as many as 85% of young Muslims wanting to try Islamic banking, according to a new global survey.
Consumers who aren’t Muslim are also increasingly demanding greater ethics and transparency in their banking.
What is Islamic banking?
Islamic banking, also known as Shariah-compliant banking, is a system of banking that is based on the principles of Islamic law (Shariah). The charging or paying of interest is prohibited. Instead, Islamic banks operate on the principles of profit-sharing, risk-sharing, and ethical investing.
Why Islamic banking matters
With a huge global Muslim population, there is a significant market demand for inclusive financial services that adhere to Islamic principles, especially for banks that want to win over younger customers in Asia.
What this means for banks
- Reexamine portfolio for more Shariah banking. Banks wishing to court Malaysian customers should take note that millennial and Gen Z Muslims place high value on religious alignment as well as commercial viability. In fact, 74% of Malaysian and 64% of Indonesian respondents say it is important that the whole bank is Shariah-compliant.
- Eliminate lack of trust barrier in Indonesia. Forty-two percent of respondents in Indonesia say they do not use Islamic banking because they are distrustful that banks can be fully compliant. Interestingly, Indonesian respondents who do not use Islamic banking are also the most likely to want to, with the figure at 92%.
- Continue to focus on service. Millennial and Gen Z Muslim consumers expect high-quality, tech-enabled service to underpin Islamic banking. Ninety-two percent say it is important that their bank offers online banking options and 90% want great customer service during the investment process. Embracing Islamic finance shouldn’t mean ignoring the high standards consumers have come to expect in banking.
About the study
Software company Mambu carried out a global survey in March 2024 of 1,513 Muslims aged 16-40, across the UK, South Africa, UAE, Indonesia, Malaysia and Saudi Arabia.
Why brands should tap into the magic of Eurovision
Eurovision is a unicorn in the music landscape: a single property that resonates across European markets and beyond, it provides brands the opportunity to buy into the ‘disco magic’ centrally and activate credibly across local markets, using a platform that consumers genuinely care about - but it's potential hasn’t yet been fully utilised by brands.
Why Eurovision matters
With a viewership of 181 million it has over 60 million more viewers than the Super Bowl Halftime show.
What to do about it
Eurovision provides brands with an opportunity to strategically resonate with a huge and diverse audience across Europe – an opportunity that hasn’t yet been fully utilised, argues Fuse's Hannah Colbourne in an exclusive piece for WARC.
It is a rare moment in the music calendar that truly transcends markets and encourages sharing of the experience in real time.
Takeaways
- Eurovision’s scale and multi-market appeal should not be underestimated. It provides an opportunity for brands to tackle the fragmented music landscape, with a ‘one-stop shop’ akin to those found in the sports landscape.
- Eurovision provides a rare moment in the music calendar where viewing live is inherent to the experience, and where the event invites ’watch parties’ akin to those you see for major sports finals.
- While Eurovision is both playful and entertaining, it can also be controversial so brands must understand their role in the platform before committing.
- The audience make up for Eurovision is altogether more diverse, attracting youth, family, and LGBTQ+ audiences in their droves. These social-first audiences are hungry for content, expect brands to be playful, and are open to sharing their experiences.
[Image: Anthony DELANOIX from Unsplash]
Luxury travel adapts to the ‘new nomads’
Research from Kantar has identified a distinct new group of affluent consumers whose values and expectations are reshaping the experience of luxury travel.
Why luxury travel matters
Luxury hospitality brands are having to rethink their offer in order to accommodate the desires of these travellers, who are looking for more meaningful experiences in a safe environment. At the same time, they are increasingly having to compete with luxury goods brands that are extending their reach into new categories, like spas and hotels.
Takeaways
- The “new nomad” luxury traveller spends a lot of time away from...
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All In expands its work on inclusion
All In has announced three updates to its Action Plan, focused on Black talent, disabled talent, and talent from working class backgrounds.
Announced at the LEAD North summit in Manchester, the three new actions are informed by the results of its March 2023 All In Census and are part of UK advertising’s aim to build a workplace where everyone feels they belong.
New actions
- Invest in a sponsorship programme. According to the 2023 All In Census, just 2% of Black respondents were in C-suite positions; 31% of Black respondents also reported that they felt undervalued compared to colleagues of equal competence.
- Ask staff or visitors if they have any accessibility needs. For 39% of disabled people, their company was unaware of their disability/health condition. Among those whose company was aware, just over half (53%) felt their company was very supportive, 28% felt their company was supportive but could do more, 13% neither supportive nor unsupportive, and 4% unsupportive.
- Adopt the new Early Careers Social Mobility toolkit. Assess how to develop working class talent, with a focus on those in the early stages of their careers, through a toolkit developed by the All In Social Mobility Working Group. (Working-class professionals continue to be underrepresented in the UK advertising industry at 20% compared to the national average of 40%.)
Key quote
“The road to inclusion is complex and ever-evolving, and that is reflected in the updates to the All In Action Plan. Our objective is to continue to promote, encourage, and advocate for better representation, inclusion, and equity in UK advertising’s workforce” – Kathryn Jacob OBE, Chair of the Inclusion Working Group and CEO of Pearl & Dean.
Details of the full Action Plan can be found on the All In Hub, alongside a summary of the 2023 All In Census findings and a directory of resources to help employers build an inclusive workplace, including over 100 DEI initiatives.
Sourced from All In
What young APAC consumers want from beauty products
More than half of the world’s young people reside in the Asia Pacific region and there’s a rise in consumers seeking prevention rather than intervention from their health and beauty products.
Why beauty matters
More young APAC consumers are seeking non-harmful, science-backed skin health products, and while they are focused on health and beauty, they are also choosing brands that allow them to express their individuality.
Takeaways
- One trend is brands experimenting with makeup colours and products that adjust to changes in body temperature.
- The growth of the medical device industry, which makes products for wound care and traumatic skin...
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WARC Creative: Insights from North America rankings
What’s the DNA of North America’s most awarded campaigns? A new report from WARC Creative pulls out the attributes of the most awarded campaigns and companies that have dominated the higher echelons of the WARC Creative 100, Media 100 and Effective 100 rankings.
WARC Creative members can read the report here; if you’re yet to subscribe, a sample report is available here.
Key themes
Sport in focus
Many of the most successful campaigns from North America utilized sports-related themes and events, either by incorporating them thematically or by strategically leveraging sports platforms such as the Super Bowl and the World Cup.
- ‘Interface Interruption’, a campaign for streaming platform Tubi by Mischief @ No Fixed Address New York / VaynerMedia New York, released an ad during the Super Bowl where TVs seemingly switched channels to promote the Tubi app.
- ‘Dreamcaster’, for Michelob Ultra by FCB New York, addressed accessibility issues in sports, by developing tech that enabled visually impaired people to enjoy sports.
Top US advertisers consistently rank high
Almost half of all advertisers in the top 50 advertiser ranking in the Media and Creative 100 are headquartered in North America, with 22 featured in the Creative 100 and 23 in the Media 100.
This year’s most successful brands and advertisers have demonstrated long-term consistency, as seen with Apple and McDonald’s, which have maintained top 20 rankings for several years.
USA continues to dominate the rankings
The USA secured the top position across all three rankings, a consistent achievement since the start of the WARC Rankings. It had 65 campaigns in the top 100, with over a quarter of campaigns in the Media 100 running in the US.
Canada also had a strong performance this year, featuring as one of the top 10 countries in both the Media 100 and Creative 100. It also improved on its ranking from the previous year in both.
WARC Creative: Insights from APAC rankings
What’s the DNA of Asia’s most awarded campaigns? A new report from WARC Creative pulls out the attributes of the most awarded campaigns and companies from Asia-Pacific that have dominated the higher echelons of the WARC Creative 100, Media 100 and Effective 100 rankings.
WARC Creative members can read the report here; if you’re yet to subscribe, a sample report is available here.
Key themes
Partnerships
The top 10 APAC campaigns from each of the three rankings reveals brands using partnerships to increase the reach of their campaigns.
- In Bundy Mixer, Bundaberg Rum promoted women’s sports through a partnership with the NRL in Australia.
- In LEGO City Goes Nitro, The LEGO group partnered with action sports brand Nitro Circus to promote a new product, and numerous other campaigns collaborated to gain credibility when tackling social and environmental subjects.
Humour and entertainment
When compared to the EMEA region in particular, the top APAC campaigns were less dominated by not-for-profit campaigns and advertising ‘for good’. Instead, they showcase a diverse range of tactics to relaunch brands, launch new products and generate brand awareness.
There are examples of the effective use of competitions in the top 10s, and humour is also more widely used in this region than others, with many of the campaigns lighthearted and designed to entertain and surprise consumers.
Australia is top for creativity. India is most effective
Taking into account all awarded work in APAC that’s tracked by the WARC Rankings, India accrued the most points for both media and effectiveness. Across the top 10 APAC campaigns in the three rankings, 10 out of 30 came out of India, five of which were in the media ranking.
However, Australia leads the way for creativity, with two of the top 10 campaigns and five of the top 100 punching above their weight in terms of relative ad spend.
WARC Creative subscribers can view and download progression charts for agencies, networks, brands and advertisers via the WARC Interactive Rankings dashboards.
WARC Creative: Insights from EMEA rankings
What’s the DNA of EMEA’s most awarded campaigns? A new report from WARC Creative pulls out the attributes of the most awarded campaigns and companies from the region that have dominated the higher echelons of the WARC Creative 100, Media 100 and Effective 100 rankings.
WARC Creative members can read the report here; if you’re yet to subscribe, a sample report is available here.
Key themes
Problem solving through advertising
The top 10 EMEA campaigns from each of the three rankings reveals brands trying to solve real-world problems through marketing campaigns.
- For some, like Dove, this is part of a longer-term creative platform based on a clear brand purpose.
- Others have responded to immediate crises, such as Mastercard’s ‘Where to Settle’ campaign to help people displaced by the Ukraine war.
- Some use innovative marketing to reduce barriers to purchase, like Renault’s Plug Inn, which increased the network of e-car charging spots to increase sales.
Large advertisers dominate
Though there are a significant number of not-for-profit and short-term campaigns ‘for good’ at the top of the campaign rankings, the bigger picture shows that larger advertisers with a long-term focus on creativity and effectiveness are at the top of the brand and advertiser ranking.
In EMEA, McDonald’s accrued the most points for creativity and effectiveness, while eBay was most successful in media shows. AB InBev had similar success at the advertiser level for creativity and effectiveness, joined by Unilever for media.
France is top for creativity. The UK is most effective
Taking into account all awarded work in EMEA that’s tracked by the WARC Rankings, the UK accrued the most points for both media and effectiveness.
- Across the top 10 EMEA campaigns in the three rankings, nine (30%) came out of the UK.
- However, for creativity, France leads the way, with three of the top 10 campaigns and the most awarded agency is BETC Paris.
How to achieve peak performance and ROI in sports sponsorship
Sport in Australia is akin to religion, a vehicle for cultural aspirations and greater inclusivity, and sports sponsorship can help marketers to build upper-funnel metrics before conversion through emotive clarity and fan love.
Why sports sponsorship matters
Brand sponsors are the lifeblood of Aussie sports but they’re increasingly under scrutiny, with stakeholders questioning their true value. However, the focus should not be on evaluating immediate sales lift but on placing sponsorship in the realm of building upper-funnel metrics first and then conversion.
Takeaways
- Sponsorship is like a marathon, not a sprint, and capturing its impacts goes beyond measuring its direct...
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Crocs looks to marketing to boost HEYDUDE
Crocs reports that its two major brands are on different paths, with the Crocs clog brand growing while its HEYDUDE loafers brand is shrinking.
“They are definitely on different trajectories relative to the underlying market,” CEO Andrew Rees told an earnings call. “I think the underlying market is a reflection of the consumer spending less money on footwear,” he added.
Why it matters
If consumers are spending less, it suggests that marketing has to work harder, something Rees acknowledged: “We need to do a better job around engaging the consumer and making the HEYDUDE brand more relevant for more consumers,” he said.
In that respect, HEYDUDE will be taking a leaf out of the successful Crocs playbook, which is “to make the classic relevant for more consumers around the world”.
What Crocs has done
- Crocs operates a “socially-led, digital-first marketing playbook” which has kept the brand top of mind and popular with US teens, for example.
- It has driven brand affinity and engagement through partnerships, eg with Toy Story, Hello Kitty and Chinese streetwear brand Clot. A collaboration with luxury brand Simone Rocha was priced at $175-225 and sold out globally almost immediately.
- It has attracted new consumers through the creation of “multi-product franchises that broaden user occasions” (translation: think Echo Storm – an evolution of the clog to a sneaker).
What next?
Rees outlined three areas of focus for Crocs as a business:
- “Ignite our icons across both brands to drive awareness and global relevance for new and existing consumers”.
- “Drive market share gains across our Tier 1 markets through strategic investment behind talent, marketing, digital, and retail.”
- “Attract new consumers to our brands through methodically diversifying our product range and usage occasions.”
Sourced from Seeking Alpha
Behavioral science can be effective for promoting sustainability
Behavioral science can help the performance of ads that lead with an environmental message, improving their creative effectiveness by successfully encouraging consumers towards habits that positively change the environment.
Why behavioral science for messaging matters
As part of its Greenprint USA report, System1 analyzed 1,000 US TV ads and found that only 2.6% of them featured an environmental message. Those that did performed only slightly better than the US average across creative effectiveness metrics. With far too few corporations successfully addressing the climate crisis – or not addressing it all – finding ways to make environmental messaging...
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Why taglines are difficult to get right
Taglines are often held up as one of the best examples of distinctive brand assets – think “Just Do It” or “I‘m Lovin‘ It” – but research shows just how difficult it is for taglines to stick in people’s minds.
Brand asset research agency Distinctive BAT analysed client research in the UK banking category and found that not one tagline reached ‘hero’ status – that is, at least 50% of respondents recognising it and at least 50% attributing it to the correct brand. Barclays, meanwhile, saw only 8% brand attribution and 43% asset recognition for its tagline.
Why distinctive brand assets...
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Marketing is a key influencer in price sensitivity
Pricing has been called the swiftest and strongest arrow in the marketer’s quiver, and revenue growth management is the latest discipline to drive sustainable, profitable growth through increasing and leveraging pricing power.
Product assortment and brand building are key to this end, and marketers should consider both the economics and the customer behavioral implications of marketing decisions, argues a professor of marketing at Northeastern University in a WARC exclusive, part of The WARC Guide to marketing’s impact on pricing.
Why pricing sensitivity matters
Consumers’ willingness to accept price increases is substantially moderated by brand strategies and category context....
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Chinese EV exports face brand hurdle in Western markets
Taxes and tariffs pose a hurdle for China’s EV manufacturers seeking to expand into Western markets, but even if/when they get past those they will still need to address issues around brand recognition and trust.
Tariffs and taxes
- Imports of EVs from China to Europe currently face a 10% tariff, but this could at least double as the EU tackles what it sees as state subsidies to Chinese manufacturers.
- The US imposes a 27.5% tariff on all imported Chinese cars, but there is a push to increase tariffs on EVs or even ban them altogether.
- In addition, the UK and US are among several countries introducing new taxes or charges on EVs as they seek to replace lost tax revenues from fuel duties, actions which could significantly slow market growth.
Brand considerations
- The position of China’s EV manufacturers has been likened to that of Japan’s automakers in the 1970s and 80s, when Japanese brands were perceived as being inferior to their Western counterparts.
- Chinese manufacturers are arguably in a better position, having acquired Western brands like Volvo and MG. But that counts for little in terms of rapidly building credibility and trust when the marque being sold is unknown to buyers.
- Many markets don’t carry such baggage, especially across Southeast Asia where EVs are becoming increasingly popular.
- “Chinese EVs are flocking to fast-growing markets like Thailand in droves,” Jacky Chen, general manager of carmaker Jetour’s international business, told the South China Morning Post. “We have the huge potential to unseat conventional carmakers’ leading positions there.”
What can Chinese brands do?
Global Trade magazine suggests that Chinese automakers should initially focus on the fleet and rental markets, where cost is typically a more important consideration than brand. If they can generate significant sales in these markets then they can increase public familiarity, as well as amassing data on reliability, to be in a better position to penetrate the consumer market.
Sourced from South China Morning Post, Financial Times, Global Trade, BBC, Politico
Why purpose advertising isn’t always the best strategy
Brands new to activism should be cautious of wading into controversial waters in an attempt to look purposeful, as consumers could potentially punish this behavior for not being credible, according to a new study.
Researchers in the United States found that the source of a message has a huge bearing on how it is perceived, with established activist brands such as Nike less likely to experience negative consumer backlash as a result of purpose advertising.
About the study
The researchers used three studies to reach their conclusions, examining attitudes and perceptions toward Nike and Ben & Jerry’s primarily – considered to be established activist brands – and contrasting their findings with emerging activist brands such as Asics and Breyers. The participants in the first two studies were college-aged American students, while a third study about Ben & Jerry’s was broader in its age range, making it more nationally representative.
In each study, a controversial message (low consensus) was contrasted with one that was less likely to trigger a divided response (high consensus). Issues explored included immigration and policing.
Why purposeful brands matter
The Association of National Advertisers named ‘purpose’ the word of the year in 2018. In the last decade, meanwhile, there has been a movement toward the idea that brands should have a reason for being beyond profit maximization. This has given rise to conscious consumerism, with people searching for brands that they believe align more with their values.
Takeaways
- Promoting a controversial message results in less favorable advertising outcomes, even for established activist brands.
- Established activist brands are perceived to be more credible than their emergent counterparts when advertising a message likely to be divisive, and this translates to more favorable brand attitudes and purchase intentions among consumers.
- Established activist brands are not immune to net-negative effects and backlash but they can generally absorb adverse outcomes better than those newer to activism.
- When brands take a stand on a contentious issue, part of the negative response arises from the idea that they don’t act the way they are expected to (or what the researchers called ‘expectancy violation’). A high-consensus message is more expected, such as brands talking about CSR.
- Brands such as Ben & Jerry’s, Nike, and Patagonia have a competitive advantage, particularly among individuals with a lot of knowledge of certain topics.
Sourced from the Journal of Advertising Research
Coty boosts marketing budget and earned media value
An increased marketing budget and “overdrive on advocacy” on social media platforms helped deliver double-digit growth last quarter at Coty, a beauty company with brands including CoverGirl, Rimmel and Max Factor.
“Our focus in fiscal ‘24 has been on actively step-changing our social media reach in order to drive our brands and build stronger community engagement, underpinned by disruptive innovation,” CEO Sue Nabi told a Q3 earnings call. “We’re already seeing very strong positive impacts.”
Takeaways
- Advertising and consumer promotion investments represented approximately 28% of sales in Coty’s FY Q3, up approximately one percentage point from the prior year.
- CoverGirl reached the #3 rank for earned media value (EMV) in the US among the brand’s peer set (up from #6 last year), as product launches were amplified by thousands of influencers; EMV rose nearly 1.5x in the quarter.
- Rimmel reached the #4 rank for EMV in the UK among the brand’s peer set (up from #5 last year), as the brand worked with Rimmel’s Creator Crew to develop new products and launches and promote hero products; EMV growth was 75% in the quarter.
- That digital advocacy has also been an important factor in boosting sales via e-commerce channels which now account for 20% of all sales.
Why it matters
As Nabi explains it, in the context of CoverGirl, “distinctive brand equity, disruptive innovation and the strong momentum we are gaining in social media advocacy is allowing CoverGirl to outperform the established cosmetics brands at US mass retailers while simultaneously outperforming in e-commerce”.
Sourced from Seeking Alpha
[Image: Coty]
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