Adidas looks to cities

27 March 2015
HERZOGENAURACH: Adidas, the sportswear giant, intends to focus its marketing efforts on six cities around the world as part of a new five-year plan.

"Global brands are created in global cities," said Roland Auschel, head of global sales. "If we win running in New York and Los Angeles, we will win running in the US. Therefore, we are committed to win market and mind share in key cities around the globe."

In addition to the above two, Adidas will also be looking at London, Paris, Shanghai and Tokyo. Most of its investment in "talent and attention", Marketing Week reported, will also rest in these six cities.

Chief executive Herbert Hainer described them as "'halo' locations where the perceptions of brands will be shaped" and spread to the rest of the world.

The move comes as Adidas seeks to restore margins and profitability and to close the gap on rival Nike.

Hainer conceded mistakes had been made. "We did not focus enough on the needs of our consumer," he said. "This was a result of our function-driven organisation, which slowed down our decision-making, making us and our plan too static and not agile enough.

"Losing our number two position in North America is a direct consequence of that," he added.

One way Adidas plans to address this is by bringing some production back from Asia as it trials automated production units. Hainer noted that it could take six weeks to ship products from Asia to Europe, which was too long.

"We will bring production back to where the main markets are," he declared. "Robots can be everywhere."

This strategy will enable it to react more quickly to fast-changing fashion trends. In a similar spirit it will extend the innovations pioneered by its NEO teen fashion brand which gets new products into store in 45 days, compared with a sports industry standard of 12-18 months.

Data sourced from Marketing Week, Financial Times, Reuters; additional content by Warc staff

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'Understanding gap' frustrates consumers

27 March 2015
READING, UK: Consumers are increasingly opting to contact brands via written digital communications – email and social – rather than voice, which is leading to frustrations as the two sides fail to fully understand each other.

Eptica, a supplier of customer interaction management software, surveyed 1,000 UK consumers and 103 contact centre agents for its study, The Power of Linguistics in Customer Service. It reported that consumers overwhelmingly used email to contact brands, with 87% of consumers selecting it as their primary communication channel, ahead of Facebook (6%), chat (4%) and Twitter (3%).

The biggest single source of frustration, cited by 78% of consumers, was getting a response that either partially, or completely, failed to answer their question. Another major issue, brought up by 31%, was a failure to acknowledge their upset or anger.

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The research found that the consequences of this frustration were stark: 82% said they always or often switched supplier if they failed to correct their mistakes.

As well as the impact of customer churn on revenues, the understanding gap also adds to costs as consumers have to re-contact a company, so putting more pressure on customer service workloads and stretching resources.

On the other side of the fence, 61% of contact centre agents said they found it hard to understand the language and vocabulary that consumers used, and nearly a third (31%) found it hard to recognise anger or upset in written communications.

Being sworn at and abused were fairly obvious signs of anger that made agents unhappy but they also cited emails written totally in UPPER CASE and use of the word 'disappointed'.

And while agents empathised with consumers' frustrations they felt powerless to help and wanted better tools and technology. For example, half wanted to be able to prioritise answers based on tone (anger, sadness, happiness) and a similar proportion wanted technology that analyses questions and suggests relevant information.

Julian Sammells, sales director UK & Ireland at Eptica, observed that many brands were focused on building stronger relationships and engaging with their customers, but said their efforts were being "seriously undermined by a breakdown in understanding between consumers and frontline customer service staff".

Data sourced from Real Wire; additional content by Warc staff

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Viewability issues exaggerated

27 March 2015
AUSTIN, TX: The issues around the viewability of digital ads have been exaggerated by those with an interest in doing so, according to a leading industry figure.

Noting the extent of negative press coverage around "the two ugly sisters of the trust and supply chain – viewability and fraud", John Montgomery, CEO for GroupM Interaction North America, suggested that these stories were "apocryphal and based on self-interest".

"It's confused marketers a hell of a lot," he told Beet.tv, before going on to argue that there was "a huge good news story to be told".

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The nature of that story, he reported, was that GroupM had seen viewable ads "increase by nearly 30% year-on-year" while other agencies he spoke to had seen the same thing.

"Web designers and publishers are redesigning their pages to make them much more viewable," he said. "And marketers are responding by paying premium rates for more viewable ads."

There was, of course, more to be done but the direction of travel was hugely encouraging.

The same was true of the other sister. "On fraud, the industry has spoken – media buyers and clients – to say 'we won't tolerate a high degree of fraud in our advertising, we need to have this addressed'."

Montgomery pointed to the existence of the Trustworthy Accountability Group (TAG), a new body set up to counter ad fraud, identify criminal behaviour and share policing resources among members, and which includes leading brands, agencies, internet and adtech companies among its members.

A TAG certification could become a standard feature of online ad buys, according to Mike Zaneis, the organisation's interim CEO. "You are going to hear a lot more about this," he said. "I think it will become a regular part of the buying process."

Backing the new group, ANA president Bob Liodice said businesses could invest millions of dollars to save billions.


Data sourced from Beet.tv, Advertising Age, Advertising Week; additional content by Warc staff

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Netflix goes beyond demographics

27 March 2015
AUSTIN, TX: Netflix, the online streaming service, has moved significantly beyond using demographics to understand its users, having learned this information was "almost useless" as an indicator of behaviour.

Todd Yellin, Netflix's vp/product innovation, discussed this subject at South by Southwest (SXSW) 2015 in Austin, Texas.

"Everyone's instinct was, 'Yeah, if you find out their age and gender data, that's fantastic'. But what we learned is: it's almost useless," he said. (For more, including details of its A/B testing strategy, read Warc's exclusive report: How Netflix enhances the customer experience.)

"Because, here's a shocker for you, there are actually 19-year-old guys who watch 'Dance Moms', and there are 73-year-old women who are watching 'Breaking Bad' and 'Avengers'."

The importance of looking beyond such basic characteristics has been reinforced as Netflix's operations have grown increasingly international in scope. "Taste is becoming more global," said Yellin.

An alternative on which to base its strategy simply involves getting consumers to rate the shows and movies they watch.

"You can just ask people and have them rate things on a one-to-five star scale," Yellin said. "At the peak, we had over half of our members rating over 50 titles."

The issue with this tactic, however, is that people often "pretend" they like certain things – replicating the problems frequently experienced where studies are premised on reported behaviour.

"We've spent so many resources over so many years getting those billions of ratings, making an amazing algorithm that could predict how many stars someone's going to give something," said Yellin. "It's helpful, but secondary."

Through monitoring and gathering statistics across several years, Netflix has thus effectively been able to establish a hierarchy of data points.

"What we've learned over time is: it's not who they are in a superficial sense – like gender, age, even geography. It's not even what they tell you. It's what they do," Yellin said.

"This is how it works in the hierarchy; if you give us age and gender and geography, hit play on one title – hit play on 'Dance Moms', hit play on 'The Avengers', hit play on 'Orange is the New Black' – and we'll know more about you than all the superficial stuff."

Data sourced from Warc

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'Seamless retail' a work in progress

27 March 2015
NEW YORK: Hard-pressed retailers need to invest across the board if they are to deliver the "seamless retail" experiences that most consumers now expect, according to new research.

Consulting firm Accenture surveyed 750 US consumers and undertook a separate analysis of how US retailers operate across multiple sales channels, and concluded that if retailers wanted to win consumer loyalty and achieve growth across all channels, they would have to improve both their mobile commerce offerings and the in-store shopping experience.

The research showed that only 42% of shoppers found it easy to complete a purchase using a mobile device. And 39% said the physical store was the area of the shopping experience most in need of an upgrade.

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Tying the two together, more than one third (39%) of consumers said that they would take advantage of the opportunity to earn loyalty points and save money on their purchases through in-store mobile phone offers, while almost half (45%) would like to receive real-time promotions sent to their phones or tablet.

But only 28% of retailers can currently offer such services. And the gap between what consumers want and what retailers can deliver was further highlighted in the area of the shopping experience second most in need of improvement.

Almost one third (32%) of shoppers wanted to be able to use all three sales channels – physical store, online and mobile – in an integrated way. However, tablet and mobile phone users were able to start shopping on their devices and complete the cycle in-store with only 22% and 19% of retailers, respectively.

"Physical and digital commerce are converging at an incredible pace," said Dave Richards, global managing director of Accenture's Retail practice.

"All sales channels must be equally desirable to the consumer, so that the path to purchase is not chosen based on satisfaction in one channel over another, but simply on what is most convenient at that time."

He advised retailers to rethink their investment approach and to build capabilities like digital marketing and analytics that will "enable them to tap into the core strengths of the physical store and seamlessly integrate with the rest of their digital offerings"

Data sourced from Accenture; additional content by Warc staff

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UHNWIs need personal service

27 March 2015
HONG KONG: Information and data are key to reaching consumers, but at the luxury end of the market such concerns take on a whole new dimension that might alarm privacy campaigners.

The typical ultra-high-net-worth individual (UHNWI) "doesn't respond to traditional marketing initiatives," according to Jean-Luc Gustave, APAC vp/business development for luxury at Wealth-X, a wealth intelligence service. "You can't just send an email to the richest man in Asia and hope to engage him.

"Knowing someone perfectly means not just knowing his money but who he is," Gustave explained at an event reported by Campaign Asia-Pacific.

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"If I was a wealthy person in Hong Kong, with a son who has just graduated from Harvard,your job is to know that," he elaborated. "It might be your opportunity to approach me very personally.

"Perhaps I might be considering buying a house in London or a car to celebrate his graduation – it's your chance to connect to my reality, and if you don't know that you have lost the perfect opportunity."

Gustave further suggested that the best way to sell to such people may often involve an oblique approach that skirts around the brand itself.

He gave the example of an aviation business which identified 50 people attending a conference who possessed sufficient funds to buy a private jet. 

When it became apparent that most of these individuals were also interested in fashion, the aviation firm partnered with a luxury fashion brand to host an event, which attracted 40 of the 50 targets and led on to five plane sales.

Companies at the very top end of the market need to build relationships that are more than purely transactional and that requires a good knowledge of the individual.

But, added Gustave, chances were being regularly missed. A fairly frequent occurrence, he said, was a woman rushing into a luxury brand store in Hong Kong's Tsim Sha Tsui, desperate to find an accessory for a gala dinner in a few hours' time.

A couple of assistants help her find what she wants, she buys it and leaves.

"She has just spent HK$1.5m in the shop in under 20 minutes and because shop assistants are often too polite to ask questions, no-one knows who she is," said Gustave.


Data sourced from Campaign Asia-Pacific; additional content by Warc staff

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TV gains on print in India

27 March 2015
MUMBAI: 2014 was a good year for TV advertising in India and its continued growth will see it overtake print in the next four years according to a new report.

The Indian Media and Entertainment Industry Report 2015, produced by consulting firm KPMG in association with trade body FICCI, said that TV ad revenues had grown 14% in 2014 to reach a total of Rs 154.9bn. This compared with print's 8.5% uplift to Rs 176.4bn.

But TV's projected compound annual growth between 2014 and 2019 is 14.1%, or roughly 50% greater than that for print (9.7%), so it is expected to overtake print as the largest advertising medium in 2018.

Together these two media currently account for 80% of all advertising revenues in India. Digital is growing fast, however – up 44.5% in 2014 – and its current share of 10.5% will almost double by 2018, most of that gain coming at the expense of print and TV.

Election spending in 2014 was a significant factor in TV's performance, with the Business Standard noting that "electoral spends were among the highest in the world, second only to the 2012 US presidential election."

Other reasons cited in the report included a positive shift in the macroeconomic environment, the general election spends, and "the emergence of e-commerce as a significant new advertising spender".

In print, most of the growth was seen to come from tier 2 and tier 3 cities where regional language editions outperformed national editions and English-language dailies.

KPMG said that the print sector was not yet following the global trend where revenues have been cannibalised from digital media, but it added that "it is clear that the time has come for players to embrace digital strategies that complement the existing physical product and support brand building and penetration efforts".

That reflects the rapidly growing numbers of internet-enabled smartphones in use – predicted to almost quadruple in the next five years from the current figure of 116m – as well as the government's Digital India programme to transform the country into a digitally empowered society and knowledge economy.

Data sourced from KPMG, Business Standard; additional content by Warc staff

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Kraft, Heinz seek to expand brands

26 March 2015
CHICAGO/PITTSBURGH: After a day of speculation in the financial media, food and beverage giants Kraft Foods and Heinz have confirmed that they will merge to create one of the world's largest consumer groups.

The deal will unite some of America's best known brands, ranging from Heinz tomato ketchup to Kraft Philadelphia spread, and offers opportunities for The Kraft Heinz Company to grow outside the US.

Kraft CEO John Cahill confirmed plans to "bring Kraft's iconic brands to international markets" in a move that Marketing Magazine forecast would result in more spend on marketing and innovation.

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"By bringing together these two iconic companies through this transaction, we are creating a strong platform for both US and international growth," explained Alex Behring, chairman of Heinz and managing partner at 3G Capital, the Brazilian investment firm which engineered the deal with Berkshire Hathaway.

"Our combined brands and businesses mean increased scale and relevance both in the US and internationally," he added, in comments reported by Advertising Age.

Warren Buffett, owner of Berkshire Hathaway, said: "This is my kind of transaction, uniting two world-class organisations and delivering shareholder value."

The new company will become the fifth-largest food and drinks group in the world and the third-biggest in North America with about $28bn in annual revenues.

At least eight brands each generate more than $1bn a year in sales while another five are worth between $500m and $1bn.

However, not all observers are convinced that the mega-merger will solve underlying issues, such as changes in consumer tastes.

Neil Saunders, managing director of retail analyst Conlumino, said the merger "is not a magic wand that can wave away the underlying problems of either company.

"Heinz, and especially Kraft, both need to invest in brands, in marketing and, most critically, in product innovation if they are to remain relevant to consumers around the world. Unlike cost savings, this is not something that a merger automatically delivers."

Subject to approval by regulators and shareholders, Heinz shareholders will take a 51% stake in the combined group with the other 49% going to Kraft shareholders.

Data sourced from Marketing Magazine, Advertising Age, Chicago Tribune; additional content Warc staff

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Brands should list with discounters

26 March 2015
LONDON: As the UK supermarket sector tries to adapt to the challenge presented by discount stores, most especially from German retailers Aldi and Lidl, a new study has recommended that brands should embrace the trend.

Despite concerns that listing with a discounter might negatively impact a brand while simultaneously lowering a product's checkout price, Kantar Worldpanel said brands should not overlook this rapidly-expanding sector.

The consumer insights firm analysed the performance of over 350 branded products sold at Aldi and Lidl as well as the purchasing behaviour of 30,000 demographically representative households that took part in its grocery shopper panel.

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It concluded that concern about brand image is increasingly outdated because the two discounters have now become mainstream after almost doubling their market share to 8.3% since 2010. Both also plan to expand further.

More important than brand image, the report sought to establish whether listing with them would be "incremental" to sales. In other words, would sales rise without hitting revenue at discounted prices?

It found that for the majority of brands, listing with a discount retailer will increase their volume of sales. Furthermore, there is an even chance that a purchase of a specific brand at a discounter would not otherwise have been made at another retailer. This makes it "highly likely to add an incremental sale", the report said.

On the crucial issue of price, Kantar Worldpanel found that branded products sold at discounters are on average just 5% cheaper than at other stores.

However, as discounters very rarely sell products on promotion, the report said the average price of a brand sold at a discounter "could actually be higher than in other retailers".

"The key to making this listing a success is ensuring that it is done so at the right cost and that price isn't driven down too significantly over time," the report said.

"The only genuine risk of listing in a discounter is cannibalisation. That's why finding the right price point is essential," it added.

Data sourced from Kantar Worldpanel; additional content Warc staff

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VOD to be worth £1bn+ by 2019

26 March 2015
LONDON: Video on demand (VOD) subscriptions in the UK were worth just £28m in 2009, but are now expected to grow to an annual value of more than £1bn by 2019, a new report has forecast.

According to market research firm Mintel, demand for video streaming services from Netflix and other providers has been growing rapidly and it estimates the UK market grew 56% between 2013 and 2014 to reach a value of £437m.

Despite facing increased competition from pay-TV services that continue to reach more homes, Mintel estimates video streaming subscriptions will total £1.17bn in four years' time, giving the sector 38% of the total UK video market.

Much of this growth is being driven by younger users, with 91% of consumers aged 16 to 24 accessing a video streaming service in the past 12 months.

But the channel appeals across the generations and the report found that more than two-thirds (69%) of all British consumers have streamed online videos over the past year, with a third (32%) of them paying for the service.

Paul Davies, senior leisure and technology analyst at Mintel, said that part of the appeal is that streaming services allow people to access a huge mix of content.

He also predicted that "as more consumers acquire connected devices such as smart TVs, which allow them to stream films and TV programmes directly, more people will pick digital sources over physical formats such as DVDs and Blu-rays".

The Mintel research also found that exactly half of UK consumers prefer to explore content themselves rather than receive recommendations from providers. Meanwhile, nearly a third (31%) said they would like to see content recommendations from their friends appear on sites.

Also of note for providers, Mintel discovered that a third (33%) of online video subscribers – and 41% of online music subscribers – would be open to a subscription package that included a bundle of different media services.

Data sourced from Mintel; additional content Warc staff

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Hispanics attract TV ad dollars

26 March 2015
NEW YORK: Despite a growing tendency for US TV viewers to opt for on-demand and streaming services, Spanish-language real-time broadcasters are still attracting consumers with advertising revenues following in their wake.

That is good news for America's top six Spanish broadcasters, the Financial Times reported. Univision, Telemundo, MundoFox, UniMas, Estrella TV and Azteca saw an 11% increase in adspend last year compared with growth of just 3% at CBS, ABC, NBC and Fox.

Indeed, Univision sometimes beats English-language rivals among the sought-after audience of 18-49-year-olds and advertisers now see it as a serious contender.

"Univision, along with other networks in the Hispanic media market, is serious competition for the English-language broadcast networks, and the SMI [Standard Media Index] data highlight that perhaps ad dollars are finally beginning to catch up to ratings," said Scott Grunther, SMI's evp of media.

The trend is being driven in part by the viewing habits of America's population of 56m Hispanics, who are more drawn to live programmes and less likely to rely on catch-up TV.

For example, a full 92% of Univision viewers aged 18-to-49 watched live broadcasts during the 2013-14 TV season. By contrast, the four big English-language networks recorded percentages in the high-50s and low-60s.

"Whether it's sports or telenovelas [nightly soap operas] that you can't delay viewing because you'll miss out the next night, we really sell the value of a live audience," explained Keith Turner, president of sales and marketing at Univision.

Attractive also to advertisers is the demographic evidence that US Hispanics are younger than other segments of the American population.

The median age of the US Hispanic consumer is 27, firmly within the sought-after millennial generation, of whom Hispanics account for more than a fifth.

Data sourced from Financial Times; additional content Warc staff

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Stories spell success for Airbnb

26 March 2015
AUSTIN, TX: Airbnb, the online accommodation rental service, has benefitted from basing its core brand mission on storyboards which outline what "great trips" should look like.

Joe Zadeh, Airbnb's director of product, discussed this subject while speaking at South By Southwest (SXSW) 2015 in Austin, Texas.

And he reported that the approach of formulating storyboards enabled the digital service to picture both what people look for when renting rooms or properties, and the ideal scenario for individuals who list places to stay.

"We ended up with a guest story … that goes from end to end," Zadeh said. (For more, including five lessons from the storyboarding process, read Warc's exclusive report: How Snow White inspired Airbnb's brand strategy.)

"So it starts with that moment of wanderlust, when somebody is considering the idea of travelling, to taking their trip, and then returning from their trip and then sharing memories with their friends."

Equally, its "host story" covers everything from how they learn of Airbnb, thinking about participating, uploading a listing, receiving their first guest, leaving a review and repeating the exercise.

"The storyboard shows … the reality you want to create. And sure, some of those things are going to be incredibly difficult and some of those things will be incredibly easy," said Zadeh.

"And this has become the canonical vision of Airbnb. This is what we focus on: we focus on providing great trips. And that is a long-enduring vision that does not change."

One particular advantage of pursuing this approach, Zadeh told the SXSW delegates, was that it means the organisation's eyes stay firmly on the customer.

"Using storyboards for your vision has the really strong benefit of keeping you customer-focused, not company-focused," said Zadeh.

"There are no charts up to the right; there's no 'We're going to dominate market share'. There's no company metrics. This is a story about people. And I think your vision needs to be customer-centric and start with people."

Data sourced from Warc

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Asian marketers 'fail' on mobile

26 March 2015
SINGAPORE: Marketers in Asia have been accused of being "behind the curve" when it comes to leveraging the power of mobile, and of failing to recognise the growth of mobile usage in the region.

Joanna Flint, the managing director of Google Singapore, told delegates at the annual Festival of Media Asia event that the next generation of consumers will only use their mobile devices to access the internet, Enterprise Innovation reported.

She cited a study that Google conducted at the end of last year, which found that more than a third (35%) of Malaysians only use their smartphones to access the internet. That compares with 11% of Americans and just 7% of Australians.

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Apart from China, mobile-only usage is also high in other Asian nations. In Singapore, for example, it stands at 16% while it is 14% in Hong Kong and South Korea.

Google's study advised that Asian consumers are living in a mobile-first world that "needs new products and services built with mobile in mind, not as an afterthought or nice-to-have".

"There's a great chance here for Asian businesses to lead the world in mobile-first innovation by reacting fast to the revolution that's happened on the streets right outside their office doors," it said.

Flint told the audience: "The next generation, no actually the next volume of consumers will be mobile-only. It will be the only way they access the internet because the price is so low."

Flint's comments come after a recent report predicted that mobile's share of internet traffic in the Asia-Pacific region will surpass that of PCs before the end of the year, as mobile connectivity becomes a part of more people's everyday lives.

Data sourced from Enterprise Innovation, Google Asia, Mumbrella; additional content Warc staff

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New Delhi among top retail hotspots

26 March 2015
NEW DELHI: New Delhi has retained eighth position among Asia Pacific's top retail hotspots, according to an assessment of established and emerging retail markets in the region.

Global property consultancy CBRE examined how many new retail entrants there were in 2014 and found New Delhi attracted 19 global retailers.

Meanwhile, with 11 entries, Mumbai retained its fourteenth place in its rankings alongside Brisbane in Australia, in a list that concentrated on the emerging markets of India, China and Southeast Asia.

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However, the established market of Tokyo attracted the highest number of new retail entrants (63), followed by Singapore (58), Taipei (49), Hong Kong (45) and Beijing (34).

Overall, the region had 464 new retail entrants last year, up 23% from 2013, and US retailers made up almost a quarter (24%) of the total. British and Italian retailers accounted for 11% each followed by French retailers with 10.5%.

"We are expecting a growth in retail sales across the region in 2015, albeit with a more cautious approach from retailers," said Anshuman Magazine, chairman and managing director of CBRE South Asia.

"In terms of retail segments, we expect food and beverage to remain the most active," he added. "Consumers in the region thrive on new concepts, with landlords keen on creating shopping destinations by offering more dining options."

Data sourced from Economic Times; additional content Warc staff

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Global adspend to reach $540bn

25 March 2015
LONDON: Global adspend is expected to grow 4.6% to $540bn this year, according to the latest forecast from media agency Carat, which also highlights that all markets are ring-fencing digital media spending.

Based on data received from 59 markets across the Americas, Asia Pacific and EMEA, Carat believes that digital media, with a forecast $17.1bn or 15.7% increase in spend in 2015, is outpacing its previous predictions.

Digital is expected to account for 21.7% of market share, with global mobile spend up 50% and online video rising 21.6%, and for the first time digital is expected to account for more than a quarter of all adspend in 2016.

The upwards trajectory of digital is particularly pronounced in the UK, where the total advertising market is forecast to grow by 6.4%. Digital media spend is forecast to reach just under half (48.2%) of total UK adspend this year, rising to 51.1% in 2016.

A healthy UK advertising market is also driving growth in Western Europe, where adpend is forecast to rise 2.8% this year. However, growth remains stagnant in France and will be just 1.6% in Germany.

The UK advertising industry is expected to benefit from the Rugby World Cup, which England is hosting this autumn, but there are some minor concerns about whether the general election in May will result in a hung parliament and political uncertainty.

Elsewhere, North America is expected to record 4.5% growth although there is wide disparity between the US (4.6%) and Canada (2.5%).

Latin America is the region forecast to post the highest adspend growth (11.1%) this year, while Asia Pacific should record 5.2% growth.

Of that, adspend growth in the region ranges widely from Japan (0.9%) and Australia (1%) to China (7.9%) and India (11.0%).

"Carat's latest advertising forecast gives us increased optimism for the outlook for global advertising spending," said Jerry Buhlmann, CEO of Dentsu Aegis Network.

"With harder times behind us, negative growth markets are pleasingly now a minority, and collectively we can look ahead to 2016 with positive growth predicted for all key markets."

Warc's latest International Ad Forecast, released in December 2014, also concludes that global adspend growth of 4.6% is likely this year. It will be aided by a 14.0%, or $16.8bn, increase in digital advertising expenditure.

Forecast growth of 4.4% and 6.9% for the US and UK respectively are also largely in line with Carat's expectations.

UK adspend in 2014 will be quantified in full as part of the AA/Warc Expenditure Report, which will be released next month.

Data sourced from Carat, Dentsu Aegis; additional content Warc staff

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Unilever builds corporate brand

25 March 2015
LONDON/NEW YORK: Unilever, the FMCG multinational, has put social responsibility at the heart of its corporate brand-building and is putting its U logo on all its product brands as a "trust mark of sustainability", the company's CMO has said.

Speaking to Adweek, Keith Weed explained that this was "a way of telling consumers that any product with the U is the right choice for the planet".

Unilever, which spent $7.6bn on brand and marketing initiatives last year, has set itself the strategic goal of doubling the size of its business while simultaneously reducing its environmental impact.

The Unilever Sustainable Living Plan, established by Weed and CEO Paul Polman in 2010, underpins the approach with each of the company's product divisions required to add social purpose to its brand positioning.

"Our brands that most engage with our sustainability and social purpose plan are growing faster," Weed said, pointing to evidence that there has been a 10% annual increase in sales among those brands over the past three years.

As part of its mission to encourage people to associate sustainability with the Unilever logo, the company launched its first TV ad for the corporate brand last October.

Featuring images of Martin Luther King and Mahatma Gandhi alongside young people giving speeches about fighting child hunger, the ad closes with the U logo as well as those of some of Unilever's leading brands, such as Lipton tea, Hellmann's mayonnaise and the Dove beauty brand.

Shown in the US, the UK, Brazil, India and Indonesia, the ad offers an emotional "explanation of what our U logo means", Weed explained.

Turning to the possibilities offered by mobile, Weed said marketers now have a "massive opportunity" to use mobile to talk to people as individuals with access to real-time data.

However, when asked whether the efficiencies offered by mobile could lead Unilever to spend less on media, Weed said that was an unlikely development.

"I'm a great believer in building the brand, so my goal is always to reach more people," he said. "Instead of trying to reach the same number of people with less money, I look at reaching more people with the same money."

Data sourced from Adweek; additional content Warc staff

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Brand advocates lift Virgin America

25 March 2015
AUSTIN, TX: Virgin America, the air carrier, believes the support of brand advocates can help it continue to take flight in a category dominated by large rivals with significantly greater marketing budgets.

Abby Lunardini, Virgin America's vp/brand marketing and communications, discussed this topic at South By Southwest (SXSW) in Austin, Texas.

"We're actually one of the fastest-growing airlines in the US … We're really known for having a different product," she said. (For more, including examples of how the brand activates its advocates, read Warc's exclusive report: Virgin America shows the power of targeted brand advocacy.)

"We have new aircraft with mood lighting and touchscreen entertainment. We were the first airline to have WiFi fleet-wide and power outlets at every seat."

But if such features have differentiated the experience on offer, Virgin America must find similarly distinctive techniques to spread the word.

"Because we're small in an industry that's dominated by giants, our marketing budgets are about one twentieth the size of the competition," Lunardini said.

In overcoming this hurdle, tapping into the enthusiasm of its advocates has become a crucial goal for the company, which launched in 2007 and is headquartered in Burlingame, California.

"We're also really known for having a very loyal guest following and some pretty passionate brand advocates," reported Lunardini.

"So in terms of product messaging, we rely a lot on our flyers to help spread the word about the product difference on social and through general marketing."

Beyond amplifying its marketing, this group has assisted Virgin America in campaigning on issues like gaining access to new airports.

"We've also increasingly used our flyer base to help with some pretty big commercial and business challenges that we've faced along the way," said Lunardini.

"Some of those things come with the territory when you're the little guy in an industry dominated by behemoths."

Data sourced from Warc

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NFL will test digital streaming

25 March 2015
NEW YORK: In a further sign of the rapid changes taking place in the US TV market, the National Football League (NFL) has announced that it will stream a regular season game on a digital platform later this year.

When the Buffalo Bills and Jacksonville Jaguars face each other in London on October 25, the early morning clash (09.30 EST) will be streamed worldwide, the Wall Street Journal reported. The early start means it will be prime time in China, the NFL said.

The match will be broadcast on local TV stations in Buffalo and Jacksonville, but national video rights will be sold to a digital platform that is yet to be identified.

NFL executive vice-president Brian Rolapp said the NFL will not set any technological limitations on those bidding for the package, which means any website or streaming service will be able to bid.

"We won't shut the door on anyone because we are trying to learn about the market and find out what the models might be," he said. "But we want to reach as many people as we can."

Commenting on the initiative, a Netflix spokesman wished the NFL luck but said the match would be better suited to ad-supported video-on-demand because it will be a live game.

Separately, the NFL also announced that it will suspend its TV "blackout" rule for the 2015 season. The controversial rule prevents local TV stations from broadcasting games if tickets have not been sold out 72 hours before kick-off.

The Federal Communications Commission (FCC) allowed the NFL to impose blackout restrictions for decades until it changed its mind last September and voted to end its support of the rule.

While the change removed the FCC's support for the blackout policy, it could not force the NFL to stop TV blackouts. However, the NFL imposed no blackouts during the 2014 football season.

Data sourced from Wall Street Journal, ESPN; additional content Warc staff

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Unlocking FMCG's potential in Asia

25 March 2015
HONG KONG: FMCG brands can look forward to tapping into an estimated $770bn of new spending that is expected from wealthier consumers in ASEAN countries over the next five years, a new study has forecast.

According to Accenture, the global management consultancy, the ASEAN economy will be worth $3.1 trillion by 2020, making it the sixth largest in the world, while 100m people will join the consuming class or advance into wealthier tiers.

With so many consumers being enabled to trade up to premium products, this represents a great opportunity for brands to win loyalty in new growth areas, the report said.

This trend is likely to be enhanced when the ten ASEAN nations – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar (Burma), the Philippines, Singapore, Thailand and Vietnam – establish the ASEAN Economic Community (AEC) later this year.

However, the report warns that success will not be delivered on a plate. Brands will need to engage these new consumers by delivering digitally-driven strategies while also overcoming logistical delivery challenges and competition from local rivals.

After analysing data from a variety of sources as well as conducting a survey of 1,800 consumers in six of the larger ASEAN countries, Accenture advised brands to adopt a three-pronged strategy.

They should lock in demand from new and more affluent consumers, ensure supply is only a fingertip away, and build an effective operating model, such as adopting a regional model focused on capability and value.

Dwight Hutchins, managing director of Accenture Strategy Asia Pacific, urged FMCG brands to move fast to take advantage of the opportunities on offer.

"The spectacular growth of the ASEAN economy represents one of the biggest opportunities on the planet for consumer goods companies today," he said.

"All that growth, however, means that markets are changing very quickly while digital technologies lift expectations for more tailored and engaging consumer experiences.

"Companies that hope to compete for new consumers must be bold and move fast if they are to take advantage. The best advice for CPG companies entering or expanding in the region can be summed up in four words – be aggressive, move now."

Data sourced from Accenture; additional content Warc staff

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Mobile will lead US digital adspend

25 March 2015
NEW YORK: Mobile adspend in the US will increase to $65.87bn by 2019, accounting for 72.2% of total digital adspend, the latest estimates from eMarketer have shown.

That represents a significant trend, given that mobile accounted for about a quarter (24.7%) of digital adspend in 2013 and just under half (49%) in 2015.

In terms of total media advertising expenditure, it also means mobile would have grown its share from 6.3% in 2013 to 28.6% in 2019.

Next year will be the tipping point when mobile adspend surpasses desktop, according to eMarketer, which predicts mobile will take 60.4% of all digital adspend with mobile spend valued at $40.5bn.

The shift to mobile ad spending is being driven mainly by consumer demand as American adults increase the amount of time they spend on their mobile devices. This increased by 32 minutes in just one year between 2013 and 2014.

In terms of format, eMarketer estimates that by 2019 mobile display adspend will total $33.9bn compared with $28.41bn spent on mobile search.

Interestingly, the report also expects US mobile ad spending on classified, email and lead generation to more than triple over the forecast period from $962m this year to $3.32bn in 2019.

Turning to spending on mobile apps, eMarketer says advertisers will spend $20.79bn on mobile apps in 2015, up from $13.67bn in 2014, which is also three times more than the $7.93bn that will be spent on mobile web browsers.

Finally, ad spending on mobile app installs is expected to reach $3bn this year, no less than an 80% year-on-year increase from the $1.67bn estimated for 2014.

However, eMarketer cautioned: "The leading search providers are making strides to attract app developers' ad dollars, but we expect app install ads to represent an insignificant portion of mobile search spending in 2015."

Data sourced from eMarketer; additional content Warc staff

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Amazon hails fashion ad success

25 March 2015
NEW DELHI: An advertising campaign at the end of last year has helped to boost sales of apparel, footwear and jewellery at Amazon India, the online retailer has reported.

"Our apparel business has grown by 300% over the past three months. That's proof of the pudding," said Vikas Purohit, head of fashion at Amazon India, in comments to Livemint.

"Being a horizontal player, we can cater to all needs," he continued. "For instance, if I have to shop for my travels, will I go to one place to buy apparel, one place to buy luggage, one place to buy shoes or a swimming costume? In a horizontal, you can buy all these things."

Apart from the success of its advertising campaign, Amazon is also spending heavily on other marketing initiatives.

It has launched a designer store on its website that offers clothes by well-known designers, such as Rohit Bal, and the company has partnered with the Fashion Design Council of India to increase collaboration with retailers, brands and designers across the country.

"We are working with a lot of designers to help them understand and adapt to ecommerce so that they can reach a larger audience," Purohit explained.

"A lot of them are working with our sellers or becoming sellers themselves on our platform to design different ranges that are relevant for Amazon customers," he said.

It comes as the company further ramps up its challenge to domestic e-retailers Flipkart and Snapdeal by setting up a logistics company in India which will deliver direct to customers who use its online marketplace.

"We want to change how India shops," Samuel Augustine Thomas, director of transportation for Amazon in India, told the Economic Times.

"The logistics arm has been set up to aid in last-mile delivery as products can be shipped faster," he explained.

Data sourced from Livemint, Economic Times; additional content Warc staff

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Marketers unaware of digital OOH

24 March 2015
LONDON: A majority of marketers are not aware of the full range of digital capabilities that out-of-home (OOH) advertising now offers, according to new research which suggests the OOH industry has a major education job on its hands.

Clear Channel UK, an OOH specialist, surveyed more than 200 marketing professionals for its Look Again report and found that less than one third of respondents realised OOH could provide contactless technology, motion detection, QR and NFC integration and facial recognition technology.

This was ironic as "innovation" was cited as one of the top buying considerations among marketers under pressure to find new ways to reach mass audiences.

More specifically, the innovative technologies dubbed most exciting to the marketers surveyed were environmentally friendly technology (70%), motion detection technology (67%), contactless technology (70%) and use of NFC/QR code technology (72%).

"We are at the point where many marketing professionals' perceptions are at odds with the new levels of digital sophistication available across the OOH medium," noted Sarah Speake, CMO at Clear Channel UK.

She highlighted the millions of pounds worth of investment in digital that had taken place in the UK in recent years to create "a medium that is capable of delivering broadcast reach, measurability and brand fame at a national and regional level".

Bus shelters can be turned into "tweet-activated vending machines and ad-serving aeroplanes," she said. "There's a wealth of sophistication available across the medium to tap into."

A session at Advertising Week Europe heard the statistic that digital OOH generates 30% of the sector's revenue from just 2% of the sites, but panellists cautioned against getting too hung up on the innovative aspects of digital outdoor and neglecting the wider campaign.

"It's about scale, not just the one-off stunt that digital makes possible," said Andy Tilley, managing director of Talon. And Ann Wixley, creative director of OMD UK, agreed that frequency was needed as much as stunts and insisted on the need for "layers of stuff" depending on the site and the message.

Another thing the panel agreed on was the need for greater collaboration between all the players in the industry – creatives, media owners and media buyers.

Data sourced from Clear Channel UK, Advertising Week Europe; additional content by Warc staff

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PR firms target Africa

24 March 2015
LONDON/LAGOS: Global PR firms are increasingly looking to set up offices in African markets, where the emphasis of their work is shifting from the political to the commercial.

African Business reported that this development was in part a consequence of the international clients of these firms looking to penetrate new territories but also noted the rise of African businesses seeking to expand across the continent.

Hill+Knowlton Strategies, for example, has just opened a new office in Lagos to add to existing ones in Egypt, Ghana, Kenya, Rwanda, South Africa, Tanzania, and Uganda.

"Global businesses with long-term growth strategies are focusing on the African continent," said Lars Erik Grønntun, chairman and CEO of Hill+Knowlton Strategies, Europe, the Middle East and Africa, adding that it was important to be able to offer businesses "access to full-service communication strategies" in a market with such potential as Nigeria.

Narda Shirley, the founder of Gong Communications, a ten-year old London-based boutique agency which also has offices in Accra, Johannesburg and Nairobi, outlined the shift she had noticed.

"Our portfolio was primarily international companies wanting to enter African markets when we first started out working on the continent," she said, but "recently we are working a lot with local firms".

"Many of these want to expand outside of their home markets," she explained. "They feel that professional PR is crucial to building their profile regionally or across the whole of Africa."

Local PR firms are also waking up to the idea of regional expansion, with Nigeria's Brooks+Blake opening an office in Cameroon to service the Central African market

Senior manager Dare Ogunyombo cautioned that African firms had no special advantages in this regard as "different countries present their own peculiarities" which needed to be understood by anyone entering them for the first time.

And for international businesses a local presence is likely to become ever more necessary, according to Paul Jackson, managing director at Grey South Africa.

"African clients are growing tired of the seagull mentality of most European and international PR firms, where the top team flies in for the pitch, wins the business and disappears leaving the local team ill–equipped to execute the strategy," he said.

Data sourced from African Business, Business Wire; additional content by Warc staff

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Google trials new TV ad service

24 March 2015
MOUNTAIN VIEW, CA: Internet giant Google is trialling the dynamic insertion of television ads in Kansas City, with subscribers to Google Fiber TV getting the first taste of the service.

"Fiber TV ads will be digitally delivered in real time and can be matched based on geography, the type of program being shown (sports, news, etc.), or viewing history," the company explained in a blog post.

"If you're a local business in Kansas City, just as with digital ads, you'll only pay for ads that have been shown, and can limit the number of times an ad is shown to a given TV."

Viewers will notice little difference, however, as ads will be shown during existing ad breaks along with national ads. The viewers are also being offered the ability to opt out of being shown ads based on their viewing history.

The Kansas City Star elaborated, using the example of a Kansas-Wichita State basketball game, which typically attracts a broad range of viewers.

"Imagine placing ads during such a high-rating event that recognise one viewer spends several hours a week watching kitchen shows and might be a sucker for an ad for knives.

"Or others, glued to the same basketball game, who see a motor oil ad because they watch five hours a week of auto racing."

One area of particular interest is that ads can be inserted not only on live TV programs but also on those recorded on DVR.

Or, as Advertising Week put it, "if you save Sunday's Walking Dead until Wednesday, you might get ads for a sale at the Oak Park Mall that starts on Thursday".

Advertising Week also quoted a source familiar with the deal who said "the tracking at this point is pretty unsophisticated", as Google is proceeding cautiously to avoid any possible privacy infringements.

So, while there will be direct measurement of viewers in order to enable payments by advertisers based on how often an ad is shown, viewers are not being further matched with other data sources.

Data sourced from Google, Advertising Week, Kansas City Star; additional content by Warc staff

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Google learns lessons from Glass

24 March 2015
AUSTIN, TX: Google could have "done a better job" with the communications surrounding Glass, its controversial connected-eyewear product, according to a leading executive from the company.

Astro Teller, who holds the title "Moonshot Captain" at Google[x] – a unit of the Mountain View-based firm specialising in breakthrough innovation – discussed this topic at South By Southwest (SXSW) 2015.

He argued the "one not-so-great decision" made about this offering by Google, which halted public sales of the prototype to focus on further development in January 2015, involved communications.

"The thing that we did not do well – that was closer to a failure – was that we allowed, and sometimes even encouraged, too much attention for the program," he said. (For more, including why undertaking customer research was a "great decision", read Warc's exclusive report: Google learns lessons from broken Glass.)

Although Google was clearly not responsible for all the hyperbole engulfing Glass, it did stir up some attention, and this fed into some very vocal criticisms, especially regarding the privacy implications of Glass.

When Diane von Furstenberg kitted out models with Glass at New York Fashion Week, for instance, Sergey Brin – a Google co-founder – joined her on the catwalk at the end of the show, also wearing the product.

This one example pointed to a considerably wider problem experienced by Glass, in that the messaging about its precise level of readiness was extremely mixed in form.

"What we wanted was to say to the world was that, 'This is an early prototype of something that we think is really exciting. What do you think? Where can we go from here?' And much of our messaging reflected that," said Teller.

"But we also did things which encouraged people to think of this as a finished product, and the world started to think of it as a finished product while we were still busy not trying to productise [sic] it, but trying to learn as fast as we can, to fail as fast as we can.

"And we could have done a better job of communicating that, and preventing it from becoming as loud a conversation as it got."

Data sourced from Warc

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Trust vital say leading industry figures

24 March 2015
MUMBAI: Trust is an essential aspect of advertising, highlighted by the remarks at a recent event by top agency and client-side marketers, including P&G India's managing director Shantanu Khosla and leading adman Sir John Hegarty.

Both were speaking at Creativity, for Goodness Sake, organised by the Advertising Standards Council of India, and both stressed the role of trust in connecting with consumers.

Hegarty expressed some concern about the current direction of advertising, especially with regard to how content is being used and the rise of native advertising.

"We seem to be heading to a stage where we are undermining the value of what we do by pretending it's not advertising," he said, and he was doubtful whether this particular balancing act would have a happy outcome.

"I am not sure how we can portray ourselves as a truthful industry if part of what we do is deceiving people into watching ads," he said, adding that "part of the reason that we are considered deceitful is because of these things".

He argued that there were plenty of other techniques advertisers could use – including humour and product demonstrations – to successfully get their message across to consumers.

"I did not come into this industry to be deceitful and I think brands who do that should be really ashamed of themselves," he declared.

Khosla, too, had firm views on the importance of trust, which he described as "a very valuable commodity" which extended in all directions to "brands, companies and people and who do you build relations with".

And he made the point that brands needed to demonstrate integrity and to follow society's rules in order to build that trust.

"Ultimately these rules are coming from the consumers themselves," he noted. "As the consumer changes and society changes the rules change."

As an example of this he cited the history of advertising of sanitary napkins, which had been banned from TV 25 years ago. 

Today they are not only shown on TV but their role in improving women's health "is so deeply accepted that state governments are funding and running programs to freely distribute branded sanitary napkins".


Data sourced from Exchange4Media; additional content Warc staff

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Female audiences wield cinema clout

24 March 2015
LOS ANGELES: Hollywood executives focused on shoot-em-up movies they expect will attract young men are having to reassess future output in the light of growing evidence that women may be a more reliable audience.

According to the New York Times, "women have delivered the three biggest live-action openings of the year". These include "Insurgent", the audience for which was 60% female, "Fifty Shades of Grey", 67% female, and "Cinderella", 66% female.

Nor was this just a fluke, it insisted, as it listed "a parade of movies aimed at young men" that had "bombed over the same period".

"You can never put your finger on it entirely, but you have to ask the questions," said Dan Fellman, president of domestic distribution at Warner Bros. "Is this just the cyclical nature of the movie business? Or does it point to a more serious shift in habits?"

According to one analyst, it's the latter. Paul Dergarabedian of Rentrak, which tracks box-office data, said the clout women wield at the cinema has moved "from sporadic to continuous".

And he added that he expected the practice of producing all-action summer blockbusters built around special effects would change as a result.

Several factors appear to be instrumental in this development, including young men being more easily distracted by other entertainment, whether video games, sports or YouTube comedy clips, as well as a more general reluctance to have to show up in a certain place at a certain time to see a movie.

Teenage girls, however, "still seem to want the experience of going to the movies as a group", said Terry Press, president of CBS Films.

The focus on entertaining young men has paid dividends in the past. Figures from the Motion Picture Association of America (MPAA) show that, for 2014's top five highest-grossing movies, four saw male cinema-goers attending in higher numbers than their female counterparts.

But, as the Guardian pointed out, these figures disguised some other shifts that Hollywood has not obviously addressed. Most notably, 23% of cinema-goers were from Latino backgrounds, compared to their 17% share of the total population.


Data sourced from New York Times, Guardian; additional content by Warc staff

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Smartphones take off in Philippines

24 March 2015
MANILA: Low-cost models from local manufacturers are driving the rapid adoption of smartphones in the Philippines, which is now the third largest market in Southeast Asia according to new figures.

The latest Asia/Pacific Quarterly Mobile Phone Tracker from researcher IDC revealed that smartphone shipments to the Philippines grew 76% in 2014 compared to the previous year while their share of the mobile phone market jumped from 24% to 47%.

"The narrowing price gap between smartphones and feature phones made smartphones more palatable to budget-conscious Filipino consumers, leading to the faster adoption of smartphones in 2014 compared to previous years," said Jerome Dominguez, Market Analyst at IDC Philippines.

Smartphone models costing less than PHP4,000 (US$90) accounted for more than 58% of all smartphone shipments in 2014, with the third quarter seeing these devices overtake feature phones for the first time.

"The Philippines is now the third largest market for smartphones in Southeast Asia, coming after Indonesia and Thailand," Dominguez added.

This shift is being driven by local smartphone vendors, three of which feature among the top five smartphone vendors in the Philippines in terms of units shipped.

Cherry Mobile was the top smartphone vendor in 2014 with a 21.9% share, with MyPhone (11.2%) in third and Torque (4.8%) in fifth. The remaining two places were taken by Samsung, in second with 13.3%, and Lenovo, in fourth with 6.5%.

Overall, the share taken by local vendors increased from 49% in 2013 to 57% in 2014, while that taken by Chinese vendors slipped from 16% to 15% in 2014, while global vendors saw a seven-point drop from 35% to 28%.

Daniel Pang, senior research manager/Client Devices group at IDC Asia/Pacific, pinpointed the reasons behind the rise of local vendors: "heavy marketing, celebrity endorsements and price-competitive offerings".

"Branding is critical in the Philippines," he explained, "The thriving local vendors are those that not only offer budget-friendly smartphones, but also produce strong ATL campaigns and are endorsed by popular celebrities."

IDC was bullish about the Philippine smartphone market in the coming year, predicting 20% growth and unit prices falling to around PHP2,000 (US$50).

Data sourced from IDC; additional content by Warc staff

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Twitter wants to sell users' tweets

23 March 2015
LONDON: Marketers could soon gain greater access to the vast mine of data that Twitter users generate each day after the social network's data strategy chief confirmed plans to increase sales from tweets.

Sales amounted to $70m in 2014, a tiny proportion of Twitter's overall revenues of $1.3bn, and Chris Moody told the Guardian that the company wants to increase that amount from its 288 million active users.

Moody, the former CEO of data analytics firm Gnip which Twitter acquired last year, explained that Twitter can match its users to a company's database of customers to provide targeted advertising.

"You bring your data to us and we will ensure that your customers, if they exist on Twitter – we can provide advertisements to them," he said, while also acknowledging the ongoing issue of data privacy.

"It's done in a completely anonymised fashion, so we are not sharing private information," he stressed.

By way of an example, he suggested that Samsung, the Korean tech giant and rival to Apple, could use Twitter when Apple launches its next iPhone later this year.

He said Samsung could check Twitter to single out Apple customers who might be thinking of switching brands. Alternatively, it could identify the phone features that most appeal to users and then employ that data to design and target real-time advertising.

"Twitter gives this fascinating ability to understand people in context like we've never been able to do before," Moody said.

"It's not 'I know that Chris Moody is a 48-year-old male' – which is how we've thought about marketing in the past – but 'I understand that Chris Moody is dealing with the death of a parent because he's talking about it on this public platform'."

A more positive example could be of a grandparent travelling by plane to see a newborn grandchild. The airline would know the good news from tweets and could congratulate the traveller on arrival and leave a gift on their seat.

Twitter does not share the content of direct messages, but its privacy policy is clear that "what you say on Twitter may be viewed all around the world instantly".

Data sourced from the Guardian; additional content by Warc staff

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Aldi plans UK online retail foray

23 March 2015
LONDON/ESSEN: Aldi, the German discount supermarket chain, is reportedly planning to launch an online platform in the UK in a move that at least one analyst says could change the dynamics of the British groceries market.

According to German trade journal Lebensmittel Zeitung, Aldi is preparing for a large-scale trial in the UK in what would be its first venture into ecommerce in Europe, Essential Retail reported.

The company is said to regard the UK as more developed than Germany in the ecommerce sphere and views the country as a more suitable testing ground.

Aldi, along with fellow German discounter Lidl, has been making major inroads in the fiercely contested UK groceries market and already has 560 outlets.

Just last month, it announced plans to open more than 70 new stores and recruit almost 5,000 staff this year as it continues its challenge to the established "Big Four" supermarkets – Tesco, Sainsbury's, Asda and Morrisons.

As well as taking 4.8% UK market share, according to Kantar Worldpanel, the German retailer was also named as the UK's top brand in last year's YouGov BrandIndex 2014.

Although Aldi has not confirmed whether it intends to expand into online shopping, if it does then that would ramp up the pressure on other retailers, Research Farm analyst Daniel Lucht predicted.

"For now this is only a trial, however should Aldi decide to really venture into online grocery retailing in future, perhaps with a dedicated click & collect offer, then this would have the potential to change the dynamics of the entire industry," he said.

"At the moment online grocery is one of the defensive tactics other retailers utilise against the discounter threat. Once both Aldi and Lidl add the online channel to their overall proposition and tap into latent demand, all bets are off in terms of where their market share could go.

"There are still many areas of the UK underserved by Aldi and Lidl. Through an online home delivery offer – if this is where Aldi is going – shopper reach could become truly national."

Data sourced from Essential Retail, Telegraph; additional content by Warc staff

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Foreign automakers come under fire

23 March 2015
SHANGHAI: Jaguar Land Rover is to recall more than 36,000 Evoque sport utility vehicles (SUVs) in China after a state-controlled TV programme accused the British automaker of selling some models with faulty gearboxes.

The recall, announced late last week, came after a consumer rights show on China Central Television (CCTV) said the previous Sunday that Jaguar Land Rover had failed to respond to customer complaints, the Financial Times reported.

Other foreign auto brands also came under fire with car dealers for Mercedes-Benz, Nissan and Volkswagen accused of overcharging consumers at some of their service centres in the country.

As reported by China's official news agency Xinhua, the annual 3/15 Consumer Rights Gala broadcast on CCTV accused Jaguar Land Rover of putting drivers' safety at risk and of "hushing up" the Evoque's "imperfections".

The other three automakers were said to have been "in the habit of maximising profits by carrying out unnecessary repairs and replacements".

All four companies apologised for the lapses and have launched investigations into the allegations. Jaguar Land Rover also apologised to customers on its Sina Weibo blog.

CCTV has targeted foreign companies on its annual Consumer Day programme in the past and some well-known names include Apple, McDonald's and Procter & Gamble.

Whatever the substance, communications experts say it is essential for brands to respond with the correct tone to limit any reputational damage, Reuters reported.

"The 3/15 show still packs a punch to the firms targeted, and a poor or flippant response from a targeted company can evoke consumer outrage," said James Feldkamp, CEO of consumer watchdog MingJian.

Data sourced from Financial Times, Xinhua, Reuters; additional content by Warc staff

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Facebook taps the poor of Brazil

23 March 2015
SÃO PAULO: As Facebook sees its home market levelling off, the US social media giant has begun to look overseas for growth and sees great potential in Brazil, even in the slums of São Paulo.

It launched a new initiative last week in the Heliopolis favela where an innovation lab will offer technological advice and support for small businesses and entrepreneurs.

As reported by the Wall Street Journal, the aim is to tap into a wellspring of entrepreneurship that is thriving in some of Brazil's poorest communities.

But it will also assist in spreading Facebook's reach in a nation whose citizens are recognised as being very tech-savvy and, in time, these small enterprises could turn into paying advertisers.

Facebook would benefit from the advertising generated by the programme while small businesses improve their knowledge and digital skills.

Patrick Hruby, director of Facebook's SME business division in Latin America, said small enterprises in Brazil are more likely to use Facebook's messaging function for transactions online than elsewhere in the world.

They are using these social media tools because they lack access to other technology and infrastructure, he explained.

A full 90% of residents in Heliopolis use Facebook, but only about 14% of small businesses there have a page on the social network. Hruby said he wants to increase that percentage and turn more entrepreneurs into paying advertisers.

One could be 26-year-old photographer Victor Hugo, who said he used to make about $1,600 a month marketing his services in local newspapers, but who now earns $4,000 a month since creating a Facebook page to promote his business.

If Facebook's lab in Heliopolis is successful, the company says it may expand the programme to similar communities in Brazil and other countries. There is certainly room to expand.

More than 11.4 million people live in favelas in Brazil and, according to the United Nations, there are an estimated 110.7 million people living in slums throughout Latin American and the Caribbean.

Data sourced from Wall Street Journal; additional content by Warc staff

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Emotional ads pay off for P&G

23 March 2015
AUSTIN, TX: Procter & Gamble, the FMCG giant, has found that ads generating an emotional response are nine times more likely to be successful, according to a leading executive from the company.

Pete Carter, marketing director/creative strategist at P&G, told delegates at South By Southwest (SXSW) 2015 that its in-house research compared emotional responses with the times ads left people feeling indifferent.

"We did an analysis, actually over the last decade, and we looked at over 300 different TV ads, we had 85 different online videos, a hundred Facebook posts and 50 in-store displays," he said. (For more, including further results and examples from P&G, read Warc's exclusive report: Procter & Gamble research validates its marketing instincts.)

"So we looked at a multimedia account of this. And the results were kind of surprising - not totally, but they were surprising to us."

Positive emotions, perhaps least surprisingly, greatly increased the likelihood of success, supporting the long-time marketing tradition of attempting to make audiences laugh or smile.

Even negative emotions, the owner of Tide and Febreze learned, had a discernible impact on performance levels.

"Typically, we used to say that only people like the Ad Council could do things that were negative, because they're talking about stopping people from drunk driving and not lighting forest fires and things like that. And that was okay in their advertising; it wasn't good in ours," said Carter.

"And what we found was: it actually was good in ours. It wasn't as high, and I think that was mainly because we didn't have as many as examples of it."

Rather than proposing that marketers should make more ads based on negative emotions, Carter argued indifference is the real enemy.

"Indifference is the killer here. And that's what you want to avoid," he said. "I think … discovering all the different kinds of emotions that are out there: that's where the real meat is right now.

"As long as we avoid indifference and give people something that touches them, I think we're in a good place."


Data sourced from Warc

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Rise of the multicultural consumer

23 March 2015
NEW YORK: Multicultural consumers are the most dynamic and fastest growing segment in the US consumer economy and are on course to become a majority of the population by 2044, a new report has stated.

Already with a collective spending power of $3.4 trillion, multicultural consumers are younger, comprise 38% of the US population, consume a disproportionate share in many product categories, and their spending habits can influence other groups.

These are some of the key findings in the Multicultural Edge: Rising Super Consumers report, published by research firm Nielsen.

It said American multicultural shoppers – defined as those from African-American, Asian and Hispanic ethnic backgrounds – have what the report calls an "ambicultural identity", or the ability and willingness to maintain their cultural heritage while simultaneously being equally American.

Cultural identity is very important for African-Americans (78%) and Hispanics (71%), the report asserted, while adding that social causes are particularly important for Hispanics (43%).

Cultural identity is not just important in itself but also because multicultural consumers are drawn to brands and products that reinforce their cultural roots and their purchase behaviour can influence other consumer groups.

Hot sauce, for example, has now become a mainstream condiment while other food products are becoming as "ubiquitous as apple pie and hot dogs".

But the influence of multicultural consumers is not limited to particular goods. They also comprise a disproportionate share in many categories, including dairy, detergents, school supplies and other family goods – in part because of their younger age profile.

Nielsen said that the younger average age of multicultural consumers meant they have more "effective years of buying", CNBC reported.

According to the report, the median age for non-Hispanic whites in the US is 42. That compares with 32 for African-Americans, 35 for Asian-Americans and 27 for Hispanics.

One other aspect about the younger age profile to consider is that multicultural consumers make up a relatively high proportion of the sought-after millennial generation.

"Organisations are so focused on millennials, but how can we speak about millennials without looking at the multicultural quotient?" asked Vanna Tran, senior manager of multicultural growth and strategy at Nielsen.

Data sourced from Nielsen, CNBC; additional content by Warc staff

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Aussie food brands spy Asia growth

23 March 2015
SYDNEY: A number of Australian food brands recently acquired by Asian companies are likely to be introduced into Asian markets for the first time as affluent consumers there demand premium quality.

The development will be welcome news for the Australian groceries sector, which has already benefitted from steady expansion into key Asian markets over the past decade.

But this time exports could increase with support from Asian investors searching for new opportunities, the Australian Financial Review reported.

Just this month, two iconic Australian food companies were taken over. Goodman Fielder, the country's largest listed food manufacturer, was acquired in a $1.3bn deal by Singapore-based Wilmar International and Hong Kong-based First Pacific.

A week earlier, Monde Nissin, one of the largest food companies in the Philippines, took over Menora Foods, a privately owned firm in Western Australia that makes the popular Wattle Valley dips.

Chris O'Sullivan, chief executive of Monde Nissin Australia, explained that there's an emerging middle class in Asia, which has a strong affiliation with Australia and is looking for the same things.

"[But] they just can't find it in their supermarkets. Premium brands in Asia can sell for double the price they sell for in Australia," he said.

The perception that Australian-made goods are "premium" is absolutely crucial, he added.

"The key thing from Monde Nissin's perspective is the premium-ness of the product, so they're keen for them to be manufactured in Australia. It adds to the premium-ness of the brand – anything made locally tends to be diminished in value."

His comments were echoed by Robin Nicolson, an executive director at First Pacific and the new chairman of Goodman Fielder.

"This is an opportunity to ramp it up," he said. "If we can see an opportunity to take successful, well-established Australian and New Zealand brands and push them into Asia we're going to seize that."

Data sourced from Australian Financial Review; additional content by Warc staff

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Top retailers for social effectiveness

20 March 2015
SOUTHAMPTON: Amazon UK and fashion brands Topshop and ASOS are the three most popular retailers on British social media sites, according to new analysis of over 100 top retailers who use social platforms.

Amazon, in particular, stands out for attracting 700,000 new followers to its UK Twitter account in the past six months alone, although Topshop leads three out of the four social platforms examined by eDigitalResearch, the digital insights firm.

Its latest Retail Social Media Benchmark report, now in its thirteenth iteration, shows Amazon is now second for Twitter followers (965,000), just behind Topshop (1.06m), having jumped seven places since the last study.

It did so, the report said, on the back of its #AmazonBasket account, which allows users to add items automatically by tweeting the hashtag, and an "impressive" performance during the Black Friday retail event and over Christmas.

Amazon also tops the Facebook charts with nearly 5.4m followers, a respectable distance ahead of Topshop (4.1m) and ASOS (3.59m), but discount retailer Primark comes in fourth (3.57m) having made substantial gains.

Primark "surged" up the Facebook league table and does well on social media despite lacking a transactional web presence, the report said.

More broadly, the report found that almost all top retail brands post a message on Facebook at least once a day and they are also updating their Facebook pages more over weekends than in the past.

Furthermore, the top five performers on Facebook all added a significant number of new followers over the past six months, suggesting that attracting new "likes" is easier for brands that already have a large follower base.

Turning to Instagram, the photo-sharing platform that is included in the study for the first time, eDigitalResearch places Topshop on top with 3.7m followers, ahead of ASOS (2.6m) and Urban Outfitters (2.4m), the US fashion brand.

Instagram, with its growing global user base, is the second most popular site for retail brands to engage with online social audiences, the report added.

Google+, the fourth and final social platform under examination, has ASOS as its lead UK retailer with 2.26m followers, just ahead of Topshop (2.25m) with AllSaints, the retailer based in fashionable Spitalfields in East London, rounding out the top three with 1.32m followers.

Data sourced from eDigitalResearch; additional content by Warc staff

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Sony joins US TV revolution

20 March 2015
NEW YORK: Sony, the Japanese technology giant, has become the latest challenger to traditional TV providers in the US after it announced the launch of a new TV streaming service.

Its PlayStation Vue service is targeted at users in New York, Chicago and Philadelphia with prices ranging from $49.99 to $69.99 a month, and customers will not have to sign a contract or pay penalty charges for cancellation.

The service costs more than the offering from rival Sling TV, which charges $20 a month, but will feature a host of channels that includes NBC, CBS, Fox, Nickelodeon and Discovery. However, sports channel ESPN as well as Disney-ABC are absent.

"Cable hasn't evolved much in the past decade and we think users want something better," Eric Lempel, vice-president of Sony Network Entertainment, told the Financial Times.

"Customers told us they wanted channels that were tailored towards them – a bundled offer, but at a competitive price," he added.

Sony said the service will be aimed initially at the 35m American users of PlayStation 3 and PlayStation 4 consoles, an affluent market, before it is extended to tablets and smart TVs.

The move comes in the same week as the Wall Street Journal reported that Apple is preparing to launch its own online TV service later this year.

According to "people familiar with the matter", the US technology giant has been in talks with several major broadcasters and plans to offer consumers a service with 25 channels costing $30 to $40 a month.

Content from broadcasters including ABC, CBS, Fox and Disney would be made available across all Apple devices, such as iPhones and Apple TV set-top boxes.

It remains to be seen whether consumers will rush to embrace these new offerings, or whether the growing number of options available will prove too confusing, but the US TV industry almost certainly faces major change in the near future.

Data sourced from Financial Times, Wall Street Journal; additional content by Warc staff

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Brands should focus on life events

20 March 2015
LONDON: Significant life events can dramatically alter the brand choices made by consumers, so marketers should strive to identify the most appropriate life event for their target audience, a leading agency practitioner has argued.

Richard Shotton, the head of insight at ZenithOptimedia, said marketers who target these moments "will find receptive customers more open to their messaging than normal" because life events – for example, marriage or changing jobs – can disrupt habitual patterns of behaviour.

Research conducted by ZenithOptimedia reinforced this assertion after findings showed the scale of change could be "remarkable", he said in an article for Mediatel Newsline.

More than 1,100 consumers were asked what life events had happened to them over the past year and whether they had tried out a new brand in any of eight categories.

"In every category people were more likely to have tried new brands if they had undergone a life event," Shotton said. "In all product categories, bar one, the probability of trying new brands increased by at least 75% after a life event."

In over half of the cases the difference was more than double, he added.

He went on to say that separate research also points to evidence that life events can trigger changes to purchase behaviour.

For example, 40,000 households were studied for a year by researchers from the Universities of Essex and the West of England, along with the Department for Transport, and it was found that consumers who "gained a life partner" were four times more likely to change their choice of car.

The likelihood of doing so also increased significantly when people moved house or got a new job.

Shotton concluded: "Therefore, undergoing a life event may cause a physical disruption alongside a psychological one. Either way it represents an opportunity for competitors to steal share.

"Marketers' focus should be on identifying the most appropriate life event for their target audience [and], luckily, digital data sources mean that serving messages to people around life events is easier than ever."

Data sourced from Mediatel; additional content by Warc staff

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NASA explores social media space

20 March 2015
AUSTIN, TX: NASA, the US space agency, has helped build a group of online advocates by holding offline events for select users of social media services like Facebook and Twitter.

Veronica McGregor, the organisation's news/social media manager, discussed this topic at South By Southwest in Austin, Texas - and suggested these real-world meet-ups both built and enhanced digital connections.

"We can be on all the social media platforms we spot," she asserted. (For more, including examples of how these fans have supported NASA in practice, read Warc's exclusive report: How NASA mastered the social media universe.)

"But there's something very special about putting the 'social' back into social media, and having face-to-face meetings with people and getting people who enjoy space and science together in a room for a day or two days to learn about what we're doing."

Since 2009, NASA has convened more than 100 gatherings at its own locations across America and some other sites, with the aim of drawing in a diverse range of enthusiasts.

"We're up to over 6,000 alumni now, and those alumni still maintain groups with their individual events that they went to, and then a larger alumni group that they belong to," said McGregor.

"And these people have been phenomenal in helping us spread the word about what we do. And that was one of the great benefits. We really didn't think it was going to turn into that, but that was what it turned into."

Between 25 and 50 applicants generally attend each NASA confab, which last anywhere from a single evening to 48 hours.

Its recent meetings have spanned watching the Soil Moisture Active Passive (SMAP) satellite take off, discussing the organisation's influence on aeronautics and an insight into its plans to land a craft on a comet.

And whether they are talking with astronauts, viewing launches or going behind the scenes at research centres, attendees are able to share their experiences via social media.

"We give everybody power. We give everybody great WiFi access so they can all talk about what they are learning," said McGregor.

And the engagement does not end when events finish: rather, their enthusiasm then goes on to have an impact among the communities in which they live and work.

"People from different walks of life: they go back and they spread the word to their community," said McGregor.

"That's, again, key for us: we might never have made into that group of people before in terms of having them get interested in NASA missions and what we're doing."

Data sourced from Warc

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Brands face World Cup ad rate hike

20 March 2015
MUMBAI: Advertisers in India should expect "a substantial hike" in their ad rates as the national cricket team progresses through to the semi-finals of the ICC Cricket World Cup, industry insiders have revealed.

The six-week tournament, jointly hosted by Australia and New Zealand, is now in the knockout stage and defending champions India soundly defeated Bangladesh in their quarter-final clash on Thursday.

With India now through to next week's semi-finals, media-planning sources told Indiantelevision.com that broadcaster Star Sports is looking to raise ad rates by at least 7% to 10%.

However, as they were speaking before India made it through to the semis, there remains the possibility that rates could rise still higher.

"From the semi-final stages, we will have a number of fresh sponsors and advertisers coming in as numerous deals at the earlier stages were signed only till the quarter-final stage," said an unnamed source at Star Sports. "The rates will certainly see a substantial hike."

Vinit Karnik, director of entertainment, sport and live events at media planning network GroupM, agreed that ad rates are likely to rise significantly.

"India's performance in the triangular series Down Under was below par, which resulted in a slow beginning to the World Cup in terms of advertiser participation," he said.

"However, as India started playing well, the tournament gained momentum. Now in the knockout stages, the demand is high and naturally Star will increase the ad rate substantially," he added.

The Indian cricket team will now await the outcome of the match between Australia and Pakistan to know who its opponents will be in the semi-finals. If Pakistan, then viewers can expect a traditionally intense spectacle.

Data sourced from Indiantelevision.com; additional content by Warc staff

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Call for mobile spend to increase

20 March 2015
NEW YORK: Mobile raises brand awareness, drives sales and significantly increases ROI yet insufficient budget is being allocated to the channel, according to a new study of campaign spending.

The Smart Mobile Cross Marketing Effectiveness (SMoX) report by the Mobile Marketing Association, a non-profit trade association, assessed the campaign budgets from four major brands – AT&T, Coca-Cola, MasterCard and Walmart.

It concluded that reallocating to mobile would drive incremental impact for each of the campaigns and make existing budgets work harder.

For example, analysis of Walmart's annual Back-to School campaign in the summer of 2014 found that mobile impacted more consumers per dollar spent than both broadcast and cable TV.

Mobile also drove 14% of change in overall shopping intent despite accounting for just 7% of spend, the report said.

Similarly, mobile accounted for just 5% of the budget for Coca-Cola's Gold Peak Tea campaign of Spring 2014, yet it generated 6% of sales on top of driving 25% of top-of-mind awareness.

And regarding MasterCard's Travel campaign of Q4 2014, which sought to raise awareness of its Concierge app, the report asserted that "mobile worked almost twice as hard compared to the campaign average, in terms of the number of people it converted on image per dollar spent".

Greg Stuart, CEO of the MMA, urged marketers to work out how to leverage the power of mobile effectively and optimise spending in their marketing mix.

"At its core, SMoX proves the concept of same budget, better results and guides marketers on how mobile makes their marketing work harder," he said.

"With very limited effort, brands can increase the performance of a campaign by 30% on average – and potentially much more – by simply reallocating funds," he added.

Data sourced from Mobile Marketing Association; additional content by Warc staff

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Luxury discount malls will double

20 March 2015
SHANGHAI: China's middle classes aspire to buy European luxury brands, but for those who cannot afford a trip abroad, or don't want delivery, the option of shopping in a European-themed luxury discount mall is growing in popularity.

These luxury "villages", which often feature mock castles or piazzas, are expected to drive retail growth in the next few years and two major operators already making plans for expansion are Value Retail and Fingen Group, Bloomberg reported.

According to CBRE China, a commercial real estate firm, there are currently as many as 80 outlet malls in the country and another 100 will open over the next five years.

UK-based Value Retail operates a huge "village" outside the city of Suzhou which it estimates will cater for four million visitors this year with the spend on fashion and luxury brands averaging more than $700.

The company plans to open another outlet at Shanghai Disney in October and at least three more at other locations after that.

Not to be outdone, Italian retailer Fingen opened its second Chinese outlet near Shanghai in January and plans at least five more by 2017 with each offering discounts on more than 100 brands in one place.

Its existing outlet in Tianjin features gondolas, fountains and porticos – features that may appear a little gaudy for European tastes – yet it means "people can make a trip to Italy without going to Italy," explained Maurizio Lupi, managing director of Fingen's Florentia Village.

Indeed, the experience of a visit is at least as important as the discounted prices, according to Vincent Lui, an analyst with Boston Consulting Group (BCG) based in Hong Kong.

He said purchases made at discount malls "are still big ticket items for most Chinese consumers so the experience needs to match", especially as BCG estimates that consumers who value convenience, store design and service spend twice as much.

Data sourced from Bloomberg; additional content by Warc staff

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Seven ways to annoy consumers

19 March 2015
MARRAKECH: If the perfect ad is one that reaches the right person at the right time then brand marketers have some way to go as new research shows the many ways in which they continue to irritate consumers.

Social media agency, We Are Social, conducted a detailed analysis of 670,000 English language Twitter comments about ads over the course of six months in the context of Project Reconnect, the WFA's flagship initiative to better align brand and marketing strategy with people's changing expectations in the digital age.

Many negative tweets expressed a generic dislike of ads or commercials, but there were also more specific complaints that marketers can look to address.

Interruption of viewing was always annoying but especially so during high intensity content such as action and drama shows or live sporting events, so marketers need to add value to the context in which an ad appears.

Too many brands are also choosing the wrong moment and the wrong audience for their messages. It might be the right time but the wrong place or the right time but the wrong audience. Constant retargeting was another bugbear.

Advertising overkill – too many ad breaks and often ad breaks that are too long – can create irritation with all commercials, regardless how often any individual message appears.

Exaggeration riles people, the research said. Brands will gain credibility if they are honest and don't airbrush the challenges they know they face and consumers know they face.

Online targeting is meant to be clever but is often anything but, as the study highlighted instances of ads inappropriate to the content alongside which they featured and consumers being targeted by brands about which they had already expressed negative sentiments.

And many ads are just plain bad, with brands needing to do more testing work to establish if they are engaging and add value before they show them to consumers.

While positive comments outweighed the negative by a factor of 3:2, Stephan Loerke, WFA managing director, said it was the latter the industry should be focused on.

"We are not blind to the fact that ads can be annoying, intrusive and even be seen to contribute to social problems," he said, adding that marketers needed to "better align their strategies and executions with what people want and expect of brands."

Data sourced from WFA; additional content by Warc staff

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Premium publishers pool audiences

19 March 2015
LONDON: Four leading English-language publishers have joined forces to create a new digital advertising proposition that will allow brands to access a combined global audience of 110m readers via the latest programmatic technology.

The Pangaea Alliance brings together the Guardian, CNN International, the Financial Times and Reuters as founding partners, with The Economist, 50%-owned by the Financial Times group, also providing access to advertising inventory.

Initially, Pangaea will offer display solutions both as a standalone product and alongside existing publisher initiatives, including native advertising programmes and publisher trading desks, via the Rubicon Project platform.

As well as the global reach, Pangaea claims the collective audience is made up of highly influential and affluent individuals, with one in four being in the top income segments and one fifth being C-suite/senior management executives.

And as partners will be sharing their first-party data, Pangaea says it will also be able to deliver hyper-targeted campaigns and deeper connections with readers.

Ads will work seamlessly across all the publishers, and advertisers will be able to liaise with just one point of contact for all publishers within the alliance.

While this is an innovation in the world of English-language publishing, Jay Stevens, Rubicon Project International General Manager, noted that Pangaea was the sixth publisher collective Rubicon Project had powered, having already "[brought] competitive publishers together in countries such as France, Denmark and the Czech Republic"

Such publisher collectives, he added, "enable media brands to collaborate and compete for share of media plans against global digital competitors such as Google, Facebook and LinkedIn".

Tim Gentry, global revenue director at Guardian News & Media and Pangaea Alliance project lead, noted that the combined audience of 110m "means we're starting to knock on the doors of sites and brands like Twitter, which has 183m [uniques] by the same measure".

He added that "Pangaea's uniqueness lies in the quality of its partners".

"We know that trust is the biggest driver of brand advocacy," he said, "so we have come together to scale the benefits of advertising within trusted media environments, which are geared towards delivering cutting-edge creative campaigns in technically advanced formats."

Data sourced from Guardian, Financial Times; additional content by Warc staff

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P&G's Pritchard backs shift in metrics

19 March 2015
HOLLYWOOD, FL: Marketers must move beyond "in-process" metrics to secure the maximum benefits from digital media, according to Marc Pritchard, Procter & Gamble's global marketing and brand building officer.

Pritchard discussed this topic at the Association of National Advertisers' (ANA) 2015 Media Leadership Conference in Hollywood.

And he reported that brands are increasingly able to provide "great creative delivered in context to the consumer at a time when they're most receptive". (For more, including the importance of transparency, trust and teamwork for marketers, read Warc's exclusive report: P&G's Pritchard: Digital practice lags digital process.)

They also, however, often remain focused on "in-process" snapshots of engagement. Such "sub-measures" and "sub-issues" incorporate impressions, page views, clickthroughs and similar numbers.

"It's when we get bollixed up in the middle and start working on things that are the sub-measures, things that are the sub-issues: that's where we get tangled up," Pritchard asserted.

"We just have to step back and ask, 'What is the outcome we're trying to achieve?'"

This shift will allow brand custodians to enhance their knowledge of consumer activity, and reduce the reliance on approximations that traditionally underpinned communications.

"They're in-process measures for a good reason: back in the old days – and still today, in parts of our industry – you didn't have enough technology to know exactly where your ads were going and what happened with them," said Pritchard.

"So we had to use a proxy – GRPs – to guess and give us a high probability ... The beauty of what digital technology does is that it takes the guesswork out. You can know exactly where it's served and when it's served.

Marketers, of course, are grappling with an enormous amount of new technology – and that has further distracted attention from the correct point of emphasis.

"We've all been understandably racing to master the new technologies in this ever-changing machine," Pritchard said.

"But I have a little secret for you: we will never master all these technologies. As long as we try, we will forever be on our heels.

"We need to lose our obsession with the technology in the machine and turn our attention to what really matters – the consumer experience. When we do that, magic happens and value is created for everyone in the industry."

Data sourced from Warc

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Big advertisers shift towards digital

19 March 2015
NEW YORK: The biggest advertisers in the US cut their spending by more than 4% in 2014 as they moved more of their budgets into digital, new data have revealed.

Full-year figures from Kantar Media, the research business, show that total advertising expenditures increased just 0.7% in 2014 and finished the year at $141.2bn. At the same time, the top ten advertisers had reduced their adspend by 4.2% to $15.3bn, or just under 11% of the total.

"Large advertisers in particular are the ones that are most aggressively moving budgets into digital, and the cost efficiencies of digital advertising enable many marketers to buy more for less," Jon Swallen, the chief research officer at Kantar Media North America, told the New York Times.

The biggest of them all, Procter & Gamble, also registered the sharpest fall among the top ten, lopping 14.4% off its 2013 total to come in at $2.6bn for the year.

Swallen noted that a majority of the top 1000 advertisers had actually increased their spending over the past calendar year, with that by mid-size companies up 4.6% – "a promising sign for the start of 2015".

In terms of media channels, television performed strongest, growing 5.5% in 2014 as it was boosted by spending around the Winter Olympics and mid-term elections; it also benefitted from higher ad expenditures on sports programming.

The last point was especially evident in Spanish language TV, where a significant part of the 14.7% increase in adspend was attributable to the FIFA World Cup in Brazil.

Cable TV expenditures were also well up on the previous year, increasing 6.8%, helped by spending growth from the motion picture, pharmaceutical, restaurant and telecom categories.

Internet spending was flat, increasing just 0.9%, but Kantar's figures only cover display advertising and not the fast-growing areas of mobile and video.

Print media continued to suffer, with spending down 10% at newspapers, the bulk of the decline coming among local papers (-11.6%) and Spanish language papers (-4.6%); nationals newspapers held up relatively well, with a mere 0.3% decline.

Magazine spending was down 5.1%, with Sunday magazines hardest hit (-15.2%). Radio ad spending declined 3.9%, while outdoor expenditure slipped 0.2%.

Warc's latest International Ad Forecast estimates total US adspend of $167bn in 2014, buoyed by 5.8% growth in TV advertising expenditure and a 15.9% rise in internet adspend (including display, classified, search, email and mobile).


Data sourced from Kantar Media, Wall Street Journal; additional content by Warc staff

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Education can tackle counterfeiting

19 March 2015
HONG KONG: Rather than simply relying on legal enforcement to address the problem of counterfeit goods, brands operating in China should also consider demand-led actions, two academics have argued.

"Knowing who buys these fakes and why can help firms get a handle on what can be done to dissuade the customers in question from doing so again," said Lars Bergkvist, associate professor/marketing at the University of Nottingham in Ningbo, and Li Wanzhen at the EDHEC Business School.

Writing in the China Economic Review they profiled five types of buyer, based on qualitative research carried out by their university, and suggested tailoring strategies accordingly.

Thus, dupes think they are buying real brands when they're actually buying fakes and need to be educated into understanding that "alluringly cheap branded products" may be imitations.

A group which neither knows nor cares about brands were described as insouciants for whom no demand-side activity is relevant.

Happy-go-luckies are young middle-class consumers who are understand they and their friends are buying fakes and even swap tips on where to buy the high-quality ones. For this group, two possible approaches are suggested: either introduce products at prices they can afford or use advertising to disparage people who buy fakes.

Wannabes may be from a similar age group but these are more aspirational and live in fear of being found to use counterfeit products. And cheapskates can afford the real thing but sometimes buy fake items to save money.

For both these groups, the loss of face if caught using fake products is the major deterrent. So the authors suggest educating the buyers of genuine branded products on how to spot knock offs in order to make it more likely the wannabes and cheapskates will be identified.

Such an approach, they add, "would also provide an opportunity to highlight the superior quality of genuine products to customers and potential customers".

Data sourced from China Economic Review; additional content by Warc staff

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TV, ISP score low on CX

19 March 2015
WABAN, MASS: TV service providers and internet service providers returned the lowest overall customer experience scores in a new survey of US consumers.

The 2015 Temkin Experience Ratings, is an annual ranking of companies based on a poll of 10,000 US consumers covering 20 industries. Respondents are asked to evaluate recent experiences with a company in terms of success (can you do what you want to do?), effort (how easy is it to work with the company?) and emotion (how do you feel about the interactions?) with these scores then being averaged to produce an overall Experience Rating.

Temkin noted that the same two industries had been at the bottom of its ratings for the past three years, but said "their scores hit an all-time low this year".

Not only was Comcast – the "poster child for poor customer experience in these industries" – bottom in both, it was also among the lowest-scoring companies in the entire ratings.

Of the 17 companies that received "very poor" ratings (scoring below 50%), five of them were from these two industries: Comcast for TV (43%), Comcast for internet (45%), Time Warner Cable for internet (47%), Charter Communications for TV (48%), and Time Warner Cable for TV (48%).

"Internet and TV service providers are awful to consumers," said Bruce Temkin, managing partner of Temkin Group. "The lack of competition continues to fuel this bad experience epidemic," he added.

Not all providers were performing that badly, however, although none made it into the 'good' or 'excellent' categories.

Cablevision earned the highest rating for both of these industries, scoring 61% for its TV service and 60% for its internet service, earning it 'okay' status.

The only other company to receive an 'okay' rating was DirecTV for TV services. Every other company in these industries had a 'poor' or 'very poor' rating.

Only two companies registered improvements, with Verizon (+3 points) and AT&T (+1 point) both edging their TV services upwards.

But for many there were bigger falls, especially in internet provision where Bright House Networks and Time Warner were both down eight points and Cox Communications down seven points.

Data sourced from PR Newswire; additional content by Warc staff

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Rural India is mystery to marketers

19 March 2015
NEW DELHI: Indian marketers are guilty of making erroneous assumptions about consumers in rural markets, from regarding them as a homogenous group to underestimating their spending potential.

"Many marketers and most advertising agencies are still caught in a world of rural myths," according to Ashish Bhasin, chairman & CEO South Asia at Dentsu Aegis Network.

Writing in the Economic Times, he demolished three of these, starting with the notion that rural India is all the same. "In a relative sense, rural India is more heterogeneous than urban India," he asserted. There are more than 625,000 villages, all with differences between them in income, education and healthcare, and within them differences are often exacerbated by caste.

And he cautioned against talking down to rural consumers. "Village folk may be simple but [they] are not simpletons," he said. In fact, they are often smarter than urban consumers as they have to be more careful with their limited income.

Bhasin also argued that the traditional view of the importance of local influencers – such as sarpanches and mukhiyas – was becoming outdated as television and mobile phones changed rural society.

This was also highlighted by his colleague Narayan Devanathan in a contribution to Warc's New Perspectives on Indian Youth series last year. He suggested that rather than viewing young Indians through a simple urban-rural divide, the play between traditional and progressive mindsets – often present in the same person depending on need and circumstance – was more significant.

Bhasin's solution is for more marketers to get out of their offices and spend some time living with villagers to truly understand their lives and motivations.

The spending potential of rural India was highlighted by a think tank, People Research on India's Consumer Economy, which crunched the numbers from an all-India survey and segmented rural India into three groups – developed rural, emerging rural and under-developed rural.

The last of these, it pointed out, had 55% more income and 64% more expenditure than developed rural. "Lots of gain, lots of pain, not every company's cup of tea," remarked co-founders Rama Bijapurkar and Rajesh Shukla.


Data sourced From Economic Times; additional content by Warc staff

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Pantene wins Grand Ogilvy

18 March 2015
NEW YORK: Pantene, the hair care brand owned by P&G, has won the Grand Ogilvy at the 2015 ARF David Ogilvy Awards for a campaign that helped women tackle weather-related bad hair days.

The annual awards covered 14 categories, with a total of 12 Golds awarded to celebrate "the extraordinary and/or creative use of research in the advertising development processes" of research firms, advertising agencies and brand owners. The Grand Ogilvy Award, presented last night at an event in New York, goes to the highest scoring Gold winner.

Looking for a way to demonstrate its relevance to customers, Pantene's research identified the weather – uncontrollable and unpredictable – as a major culprit in bad hair days.

So its agency, Arc Worldwide, developed a campaign, Beautiful Hair Whatever the Weather, in which Pantene tied up with The Weather Channel across mobile, tablet and desktop, to provide geo-targeted "haircasts", while also recommending the right Pantene product to match at Walgreens, thus reviving its fortune at this key retailer.

Unilever, one of P&G's rival, was awarded Golds in both the food & grocery and household categories. In the former, its Knorr Sides brand was repositioned to help busy mothers break dinner monotony with simple meals. The campaign had a near-immediate effect, increasing brand and category sales and improving perceptions of the brand.

In the latter category, Unilever's global Dirt Is Good campaign was based on the idea that children everywhere can learn important values and lessons whilst getting dirty, with ad creative linking that to mothers wanting the best for their children. As a result Unilever increased its market share and added €1bn in revenues.

Bank of America was honoured in the financial category thanks to a campaign promoting its BankAmericard Better Balance Rewards product which – among other features – lets users earn $25 per quarter for quickly paying down their balance.

Golds also went to coffee specialist Keurig, automaker Toyota, retailer Kmart and sports broadcaster ESPN.

Subscribers to warc.com can read all the winning papers from the 2015 ARF Ogilvy Awards here.


Data sourced from ARF; additional content by Warc staff

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African marketers fight global ignorance

18 March 2015
MARRAKECH: Some of the challenges global marketers face in Africa are outside their control, but many are failing to address issues within their purview, including developing a proper understanding of consumers in local markets.

New research from the World Federation of Advertisers, organised in co-operation with Millward Brown and national advertiser associations in Cameroon, Kenya, Morocco, Nigeria, South Africa and Zimbabwe, highlighted matters such as the lack of reliable data on media consumption and retail performance.

A survey of 82 marketers working for well-known local and global brands at a country or regional level also revealed a significant gap in consumer understanding that local and regional marketers say exists at a global level.

Thus, 55% of respondents agreed with the statement that "global colleagues do not understand consumers in our local markets" and only 20% disagreed.

The local versus global debate also applied to local agency partners, with 58% of respondents agreeing that local agencies have a superior understanding of local business issues than international agency brands.

Marketers were, however, generally bullish about the resources they have to deliver effective marketing solutions with 34% saying they were a fair way along the road at a regional level and 30% claiming similar progress in their home markets.

And there remains much to be done to generate actionable consumer insights with 45% of respondents saying they had just begun this journey at a regional level and 33% saying they were at the same stage at a local level.

"The WFA Study highlights that, for marketers, success requires a thorough understanding of local cultures, beliefs, customs, economics, and practices," said Charles Foster, managing director, Millward Brown Africa & Middle East.

"Companies and practitioners that have followed globalised assumptions and methods have often failed to make an impact, he added, "and we've seen that a key factor for success is having marketing operations headed by locals who understand and connect with what consumers need."

The WFA's new president, David Wheldon, managing director, Brand, Reputation Citizenship and Marketing at Barclays Bank, noted the organisation was experiencing "impressive growth" from local advertiser associations and hoped to help them become more effective and efficient.

Data sourced from WFA; additional content by Warc staff

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No more heroes any more

18 March 2015
LONDON: Britons are far less likely than their US counterparts to have a personal hero, although more than half think it is probably a good idea.

New research from pollster YouGov, based on a survey of 1,683 UK adults, found that 54% agreed that "it is generally a good thing that certain people are seen as 'heroes' in society". But a similar proportion (53%) said they personally did not have one.

In fact, less than one third (31%) professed to having a hero and most of them said they had more than one.

Equivalent figures from the US, based on a sample of 997 adults, revealed that 50% had a hero while 38% did not.

More telling transatlantic differences emerged in the identity of the most popular heroes. While parents ranked top in both countries, in the UK Winston Churchill was the runner up, while in the US that position went to Jesus.

Britons also had a more internationalist outlook, citing Nelson Mandela, Margaret Thatcher and Martin Luther King among public figures after Churchill. In the US, the most chosen public figures were Ronald Reagan, Abraham Lincoln and Barack Obama.

YouGov identified a partisan split in the US – which was not evident in the UK – as Republicans (59%) were more likely to have heroes than Democrats (48%).

But there were similarities when it came to household income. On both sides of the Atlantic, those people with the highest incomes were more likely to have heroes than those with the lowest: 36% vs 30% in the UK and 55% vs 48% in the US.

Increasing age brings increasing cynicism, at least in the UK, where 42% of 18-24 year olds had a hero, declining steadily to 26% among the over-60s.

In contrast 56% of 18-29 year olds in the US claimed to have a hero, and while this proportion dipped in middle age, it leapt to 64% among the over 65s.

Data sourced from YouGov; additional content by Warc staff

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NPD a risk in SE Asia

18 March 2015
SINGAPORE: Just over one in every one hundred new products launched in Southeast Asia meets key innovation success criteria for distinctiveness, relevance and endurance, according to a new study.

In the Breakthrough Innovation Report, market researcher Nielsen analysed 2,500 consumer product launches in the top 20 FMCG categories in Malaysia, Indonesia, Philippines and Thailand and found that less than 2% met the fundamental criteria for a successful product launch.

It assessed products on the degree to which they delivered a new value proposition to the market (distinctiveness), their ability to generate significant year-one sales (relevance), and their ability to achieve at least 90% of year-one sales in year two (endurance).

Few were successful on all these measures. Just 10% of new products retained a retailer listing beyond their first year, highlighting the significant risk involved in investing in taking a new product to market.

"Thousands of new product launches fail in their first year, costing businesses millions of dollars, yet manufacturers can reverse these outcomes by changing their perspective on what drives innovation success," said Tobias Puehse, Nielsen's Head of Innovation Analytics in Southeast Asia, North Asia and Pacific.

He argued that successful innovation was about "deliberate attempts to touch all aspects of the innovation process and challenge everyday norms", including consumer attitudes, long-standing beliefs, launch mechanics, organisational behaviour and disciplines.

Local business appears to have taken these ideas on board to a greater extent than global brands, as the report identified 54% of innovation successes coming from local giants.

Three brands, said Nielsen, underscored the principles of breakthrough innovation, including Japanese skin care line Hada Labo in Thailand, brandy manufacturer Emperador Light in the Philippines, and Nestlé's formula milk preparation Lactogen 4 in Malaysia.

Puehse noted several common themes across these three, including "keeping the consumer's needs central to innovation investment, understanding the consumer and competitive landscape, and focusing on innovating for local market needs rather than a globally-scaled approach".

Data sourced from Mumbrella Asia; additional content by Warc staff

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LatAm digital TV to double

18 March 2015
LATIN AMERICA: The number of digital TV households in Latin America will double to 152m by 2020, according to a new report.

Digital TV Latin America Forecasts, from London-based Digital TV Research said that slowing economic growth across the region would not hinder the growing penetration of digital TV, which currently stands at just over 50% and is expected to hit 93.6% by 2020.

This is despite few of the 19 countries covered in the report completing conversion to digital. Puerto Rico was the first to do so, in 2014, but by 2020 Panama and Uruguay will be the only other countries to have achieved this.

The greatest absolute increase will come in Brazil, where 28.3m digital TV households will be added between 2014 and 2020, bringing the total there to 63.5m. During the same period Mexico will contribute an extra 10.9m for a total of 27.7m.

Fastest growth is expected to come in Central America and the Caribbean which together will increase the number of digital households by some 145% to 11.9m.

The Andean countries of Bolivia, Colombia, Ecuador, Peru and Venezuela will also more than double, rising 113% to 29.4m. The southern cone – Argentina, Chile, Paraguay and Uruguay – will grow more slowly, at 71%, to a total of 19.4m digital households.

Pay satellite TV is projected to add another 10m or so households between 2014 and 2020, but the report suggested that this technology has already passed through its period of fast growth and would be overtaken by free-to-air digital terrestrial television in the next couple of years.

In fact, the report predicted that primary free-to-air digital terrestrial television would overtake pay satellite TV as the leading digital platform in 2016, with the number of primary DTT homes hitting 68m in 2020, representing 41.9% penetration, compared to the 25% achieved by pay satellite.

Digital cable penetration is forecast to hit 20% by 2020, and while IPTV numbers will grow fivefold the total will remain small at just 6.8m.

Finally, total Pay TV revenues in Latin America are expected to increase by $2.6bn by 2020, with satellite TV continuing to be the largest pay TV platform, with revenues of $16.7bn.

Data sourced from Digital TV Research; additional content by Warc staff

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How Chevrolet reversed a social crisis

18 March 2015
AUSTIN, TX: Chevrolet, the auto marque, demonstrated how a mix of preparation and strategic flexibility can help marketers overcome the challenges of a nascent social media crisis during a session at South By Southwest (SXSW).

Jamie Barbour, the brand's manager/digital and social advertising, discussed this topic as part of the Interactive Festival at the annual event held in Austin, Texas.

And she zeroed in on the fallout from the 2014 World Series, where a Chevy representative stumbled over his words while presenting Madison Bumgarner with the Most Valuable Player award and the keys to a new vehicle. (For more on this subject, including key brand metrics, read Warc's exclusive report: How Chevrolet turned a social-media crisis into a triumph – and stuff.)

With the cameras rolling and millions of baseball fans watching, Rikk Wilde, a zone manager in Kansas City, stated that the 2015 Colorado truck incorporated a winning combination of "technology and stuff".

Twitter soon erupted with parodies and unflattering posts, representing a significant problem for the brand late on a midweek night.

Fortunately, however, Chevy had an infrastructure in place should any such scenarios emerge during the finale of the Major League Baseball season.

"Anytime we are part of a big event – or even if there is a big event that Chevrolet is not actually a part of – we have these little teams that we put together and they're monitoring the conversation in case things like this happen," Barbour said.

Working with FleishmanHillard, its social agency, Chevy was able to formulate a strategy and upload its own tweet in response approximately two hours after the online storm began.

By analysing the hashtags that were trending about the incident, it picked the most light-hearted conversation to join. Then, the brand made a judgement call to actively embrace the burgeoning "technology and stuff" meme.

And through entering the fray at the right time, and then phasing out this messaging before the joke got stale, Chevrolet effectively reshaped the online chatter.

But while this initiative clearly involved thinking on the fly, such spontaneity is only achievable if it is accompanied by the necessary long-term preparation.

"That's one thing to remember: when you work in social media, there is no weekend" Barbour said.

"You are constantly working 24/7, and though it might not seem that way, you always have to make yourself available, because moments like these do happen."

Data sourced from Warc

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Indian phone brand offers free internet

18 March 2015
NEW DELHI: Internet penetration in India may be on the verge of another leap forward with the launch of a cheap smartphone that also comes packaged with one year's free internet access.

"The big issue with internet has been that the cost barrier has not been broken," according to Suneet Singh Tuli, CEO of Datawind, a Canadian company best known for its low cost Akash tablets but which is now moving into smartphones.

The new offering, as Tuli outlined to The Hindu, is "a stepping stone for basic internet, because if the consumer has to pay for it, he is not sure. If he has it for free, he will try".

There are some restrictions – consumers will have to surf the internet using Datawind's own UbiSurfer web browser and if they want to access audio and video streaming content they will have to buy data packs.

Falling hardware prices have made smartphones increasingly accessible – although Tuli noted that feature phones still accounted for two thirds of monthly phone sales – but data costs are a barrier to consumers going online.

Datawind claims to be able to offer a free internet service – it pays the operator for all consumer usage – thanks to its technology which significantly reduces the consumption of bandwidth.

"If you use a normal Android browser, it uses about 14-15 MB/hour of data consumption," Tuli explained. "Opera Mini is around 6 MB and we are 1.5 MB. That reduction is so significant that I can recover the cost of data on a Rs 2,000 device."

"Not only does it [data] go through faster but the cost of data too is low," he said.

The firm is targeting tier 2 and tier 3 cities in an ambitious drive to shift around 5m units in the next year through tele-shopping networks and physical retail outlets.

Separately, a report from retargeting business Vizury said that mobile commerce in India had grown 130% in 2014 and now accounted for 58% of all online sales.


Data sourced from The Hindu, Economic Times, PR Newswire; additional content by Warc staff

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