Video ads gain confidence of agencies

6 July 2015
LONDON: More than half (57%) of UK agencies say online video ads are as effective or more effective than TV and two-thirds (65%) expect mobile video to account for the largest increase in their digital budgets, a new report has revealed.

BrightRoll, Yahoo's programmatic video platform, conducted a survey of 70 industry practitioners in November 2014, aggregated the data, and found a significant increase in the attention being paid to video.

Just 29% of agencies say video advertising is less effective than TV while a quarter (25%) report that a video ad component was included in the majority of their request for proposals (RFPs) last year.

With just 4.5% saying in 2011 that their RFPs included a video ad component, BrightRoll calculated that represented an increase of 456% in only three years.

Agency respondents also have growing confidence in programmatic with the proportion planning to dedicate a majority of their digital video budget to the technology more than doubling to 18.8% in a year (up from 9.2% in 2013).

Two-thirds (65%) of respondents agree that mobile video is where they expect the largest increase in digital media spend and a full 92% say they are likely to dedicate budget to tablet video.

CTR (8%) remains relevant for agencies, but its importance is declining as they rate completed views (31%) and brand lift (28%) as the two metrics that matter the most.

Targeting is the most valuable aspect of digital video for agencies, the report said, and this capability is cited by 44% of respondents, followed by reach (33%), price relative to TV, and ad unit format (10% each).

Taken together, BrightRoll concluded that confidence in the effectiveness of online video advertising is growing to the point where "digital video is becoming mainstream".

Data sourced from BrightRoll; additional content by Warc staff

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Complaints soar over nuisance calls

6 July 2015
LONDON: A record 180,188 complaints were made about nuisance calls and texts last year, according to new figures from the Information Commissioner's Office (ICO).

The UK privacy watchdog said the number of complaints rose 11.4% from the previous year as households found themselves bombarded with marketing communications.

"Most concerns related to accident claims, green energy deals, payday loans and lifestyle calls. Live calls generate significantly more concerns than automated calls and spam texts," the report said.

The ICO said it had levied five fines totalling £386,000 regarding these calls and texts. It also issued eight enforcement notices while another 31 firms were "monitored".

Christopher Graham, the Information Commissioner, said a change in the law meant the ICO would be able to punish more "merchants of menace" in the future.

"The job of pinning civil monetary penalties on nuisance phone callers and text spammers was made easier when the Government removed the requirement to prove substantial damage or distress before we could issue a fine.

"We were anyway tackling a record number of complaints under the Privacy and Electronic Communications Regulations (PECR), but the change in the law will help us to nail more of these merchants of menace."

However, the consumer advocacy group Which? warned that the number of complaints was likely to be the "tip of the iceberg" and called on the ICO to use its new powers to full effect.

Richard Lloyd, executive director of Which?, said: "Regulators, Government and industry must work harder to cut off unwanted calls and texts that annoy millions of us every day.

"The ICO must use its new powers to full effect and hit hard any company breaking cold-calling rules. We also want to see senior executives personally held to account if their company makes unlawful calls."

On a more positive note, the ICO said it had received fewer data protection concerns in 2014.

It said the number of complaints fell to 14,268, partly because of its work to reduce the number of ineligible concerns, and that it had significantly improved the time taken to deal with them.

Data sourced from ICO, Telegraph; additional content by Warc staff

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YouTube unfazed by Facebook

6 July 2015
SAN FRANCISCO: The increasing challenge posed by Facebook and other rivals to YouTube's command of online video advertising has been played down by the company's head of content and business operations.

Speaking to the Financial Times, Robert Kyncl said YouTube and its rivals would have plenty of space in which to grow as advertisers continue to shift their budgets to video.

With online video becoming mainstream, Kyncl said of Facebook's bid to earn more advertising revenue from the channel that "it will be a decade before we bump into each other".

Although speaking before Facebook's announcement last week that it will share ad revenue with video creators who use its site, Kyncl's confidence stemmed from a belief that content creators will always want to gain maximum exposure.

"If you're a content creator you want to publish on as many platforms as you can," he said. "Exclusivity is virtually impossible to pull off."

As YouTube continues with its tried-and-tested "pre-roll" video ad format, Facebook launched a "Suggested Videos" feed which, when clicked, intersperses video content with ads.

"Within suggested videos, we are running a monetisation test where we will show feed-style video ads and share revenue with a group of media companies and video creators," Facebook said in a statement.

Facebook plans to share up to 55% of ad revenue with selected video creators – the same split as offered by YouTube – although the exact share is reportedly based on how much time users spend watching videos.

But it is not clear yet whether that means users will have to watch the full ad, a creator's full video, or both, for a creator to make the maximum money.

Data sourced from Financial Times, BBC, Advertising Age; additional content by Warc staff

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The New Yorker adapts online

6 July 2015
NEW YORK: The New Yorker, the weekly magazine published by Condé Nast, has boosted its online readership and subscription levels by adapting the model underpinning its digital paywall.

Monica Ray, Condé Nast's evp/consumer marketing, discussed this subject at the INMA World Congress in New York.

She reported that The New Yorker's metred system - which was launched last year, and lets users access six articles of their choosing for free each month - has helped the site surpass a total of 12 million unique visitors.

After clicking on a fourth article, visitors receive a reminder that they are half way through their monthly allowance; upon trying to view a seventh, a "full barrier" indicates a payment is now required.

"In our research, we found that people got that at some point you're going to have to pay for the content. They did not have to be reminded incessantly about paying for the content," Ray said. (For more, including more detailed results, read Warc's exclusive report: How The New Yorker turned the page on digital.)

Rather than representing a simple demand for money, the reminders also draw on The New Yorker's rich visual history and distinct tone of voice.

"We worked hard to bring our brand sensibility - and some of the humour and whimsy of The New Yorker - into that subscription process," said Ray.

"So we have used cartoons from the print magazine, from the archives, to make those offers a little less of a sting."

Under this system, subscription numbers rose by over 50% during the holiday period last year and more than 80% in the opening quarter of 2015.

Its previous paywall - introduced in 2001, when the brand first established an online presence - had restricted access to between 60% and 70% of content from each week's issue, largely as chosen by the editors.

The main drawback of this approach was that it limited both The New Yorker's visibility on search engines and curtailed social sharing. Over the longer term, though, it did help the brand avoid the mistakes of others.

"In the early days of the internet, I don't know what Kool-Aid everybody was drinking, but, boy, was everyone excited to give our wonderful content away for free," said Ray.

Data sourced from Warc

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Shopping trends slow FMCG growth

6 July 2015
SHANGHAI: FMCG brands in China continued to see declining market growth in most categories in 2014, but average price growth of 5.4% offered them a more positive outlook, a new report has shown.

According to Kantar Worldpanel, the consumer insights firm, and management consultancy Bain & Company, overall market growth across 26 categories in four sectors slowed to 4.4% in Q1 2015 after a high of 12% in 2011-2012.

Now in its fourth year, the joint report studied the shopping behaviour of 40,000 Chinese households and also noted that international brands are losing ground to domestic rivals.

Local brands gained share in 18 out of 26 categories in 2014, growing on average by 10% to take about 70% of the market.

Meanwhile, foreign brands grew by just 3%, their third consecutive year of declining share, and made gains in only eight categories, including beer and chocolate.

Despite the somewhat discouraging slowdown in volume growth, higher average prices in 2014 partially offset this trend with the study showing average prices rose by 5.4%, more than twice the inflation rate of 2.5%.

Premium goods, especially health-related products, fared well, but commoditised categories like soft drinks and fabric softener saw price growth lower than the inflation rate.

Not surprisingly, the study confirmed that the trend towards online shopping continued last year. Online sales increased by 34% and accounted for 3.3% of all FMCG goods sold.

"Consumers' shifting shopping habits, the expansion of online channels and pricing dynamics have put the brakes on FMCG company growth in China once again," said Jason Yu, China general manager of Kantar Worldpanel.

"These trends are forcing brands to quickly understand the changes in the market and successfully adapt to the 'new normal' they face."

The report went on to recommend that brands target lower-tier cities where there is faster growth potential and to ensure their product categories lend themselves to adding a price premium.

Prioritising a digital strategy is a must considering how many consumers are shopping online, and brands should make the most of growth in smaller sized stores.

Data sourced from Kantar Worldpanel; additional content by Warc staff

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Asia retailers must cater to Gen Z

6 July 2015
HONG KONG: Online shopping has now become the preferred method of purchasing in certain Asian markets and retailers will need to be proactive to meet this trend, especially when catering for influential "Generation Z" consumers, a recent report has advised.

In its study, How We Like to Shop Online, global property consultancy CBRE found half of consumers in Asia-Pacific still visit physical stores, but a higher proportion go shopping online in China, India and South Korea.

Three-quarters (76%) of Chinese consumers use the internet as their most commonly used method for making purchases, the report said, while a similar pattern is happening in South Korea (73%), India (68%) and Taiwan (55%).

There are two key motivations behind this behaviour - convenience and pricing - and CBRE reported that 63% of Asian consumers identify pricing as the deciding factor for shopping online, World Property Journal reported.

The convenience of being able to compare products without having to physically visit individual stores is another important reason why consumers turn to the internet to go shopping.

The report said this trend is more prominent in emerging markets such as Vietnam (64%), China (61%) and India (58%) where quality shops are often located far from each other.

Joel Stephen, senior director and head of retailer representation at CBRE Asia, advised retailers to review their regional pricing strategy, particularly in China and South Korea, where more than two-thirds of consumers identify lower prices and better offers as the main reason to shop online.

"With 56% of Asia Pacific consumers using their desktop or laptop to check prices of products online, price transparency is an important aspect for retailers to consider," he said.

CBRE went on to highlight Generation Z consumers as an age group that retailers must accommodate because these tech-savvy consumers, aged roughly 18 to 24 years-old, will play an influential role in the regional retail market in the coming years.

"Landlords and retailers need to be more digital-savvy, keeping pace with the latest trends in smartphone applications and social media so they can build a stronger relationship with consumers, especially those from Generation Z," Stephen said.

Data sourced from CBRE, World Property Journal; additional content by Warc staff

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New streaming tax hits consumers

6 July 2015
CHICAGO: Consumers in Chicago who use Netflix, Amazon Web Services and other streaming or database platforms will now have to pay a "cloud tax" of 9% after city officials introduced new rules.

Faced with declining municipal revenue from traditional high street stores, Chicago has sought a new source of income by extending existing tax laws to encompass "electronically delivered amusements" and "non-possessory computer leases".

In effect, the tax targets streaming services and online databases within the city limits and has raised concerns about the impact on consumers and the extra complications that service providers could face, The Verge reported.

There are also worries that thousands of other jurisdictions could follow Chicago's lead, creating complexities around compliance and accounting practices.

For example, it raises the possibility of restrictive methods like IP tracking being used to identify and locate subscribers who fall under the new tax.

Netflix has confirmed that it is already making arrangements to add the tax to the cost charged to its customers in Chicago while other companies, such as Lexis-Nexis and Spotify, may follow suit.

Michael Wynne, a partner with law firm Reed Smith, said the new tax may violate the Federal Telecommunications Act and the Internet Tax Freedom Act 1998, although he recognised the financial pressures faced by the Chicago authorities.

"There's no question that the city needs revenue and I can see where things are escaping the old tax base," he said.

"I think the objectionable part is that, instead of drafting new laws for that, we're simply stretching the old laws to fit," he added.

The development, coming just before Independence Day, is a rare piece of bad news for Netflix which has been buoyed recently by a number of upbeat industry reports.

FBR Capital Markets recently predicted that Netflix's audience would soon surpass the total viewership of broadcast channels, such as NBC, ABC and CBS.

Separately, a study from consumer insights firm iModerate found that 40% of households now subscribe to a streaming service and that Netflix is by far their favourite choice.

Data sourced from The Verge, BRG, iModerate; additional content by Warc staff

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Final countdown for Warc Connection Prize

3 July 2015
LONDON: Senior executives from AOL, Initiative and ZenithOptimedia are among the final selection of judges for the Warc Prize for Connection Strategy, a new competition to find the best examples of channel thinking that delivers brand advantage.

There are just two weeks left to enter the prize, which carries a $10,000 prize fund.

The competition, which is free to enter, will look at the strategy, analytics and measurement powering modern media investment. The focus is on new ways of connecting with consumers, and how those connections are being planned and measured by forward-thinking marketers.

Mark Kaline,senior media & digital marketing leader at media owner AOL, Mainak Mazumdar, chief science officer at adtech business Simulmedia and Brett Leece, chief data officer at Initiative, one of the Interpublic Group's three worldwide media networks, and are among those joining senior client- and agency-side figures previously announced.

So too will be Sherrill Mane, svp/research, analytics and measurement at the IAB, Demian Brink, director of analytics at The Martin Agency, and Richard Shotton, head of insight at ZenithOptimedia, The full list of judges is available on the Prize website.

"True cross-channel measurement and planning remains the major challenge when choosing how to invest your marketing budget," said Aaron Fetters, director of the Kellogg Company's Insights and Analytics Solutions Center and chair of the judging panel.

“I will be looking for great examples of thinking that transcend touchpoints such as television or online and demonstrate a true consumer experience," he added.

Warc will name Gold, Silver and Bronze winners for the highest-scoring cases in four geographic categories, and award a $5,000 Grand Prix to the best paper in the competition.

There will also be five $1,000 Special Awards covering the following areas: commercial impact, POE, attribution, context and low-budget.

Full details on all the Awards along with the entry kit, entry form, and tips on writing a great strategy case study, can be found on the Prize website. The deadline for entries is Friday 17th July.

Data sourced from Warc

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Family-friendly women's football attracts brands

3 July 2015
LONDON: Women's football is the fourth-biggest participation sport in the UK and brands are increasingly tapping into a family-friendly sport that is gaining increased media coverage.

The current FIFA Women's World Cup has attracted a lot of coverage, not least as the England team progressed to semi-finals and only lost a final place in the last moments of the game.

Marketing reported viewing figures of 1.6m for a game that was broadcast after midnight and said the national team had "re-inspired a nation and altered the landscape of women's football beyond recognition".

The adam&eveDDB agency is currently working with the Football Association on a campaign, #wecanplay, to tackle negative images of women playing football.

"[We aim] to make football the second-biggest participation sport in England, behind men's football, by 2018," Russell James, the FA's head of marketing, told Marketing.

Advertisers have taken note with major brands like Adidas and Continental Tyres sponsoring the World Cup and the England Women's team respectively.

"This delivers us to an important audience, namely families, and allows us to talk about our premium brand so that we are top of mind during the purchasing decision for tyres," explained Guy Frobisher, UK marketing director for Continental Tyres.

James also highlighted the "family-friendly atmosphere" of women's football which, he suggested "presents a huge opportunity for brands".

Mat Goff, adam&eveDDB's managing director, saw an opportunity for brands to take a long view. "Brands getting involved in women's football have a chance to get in early and help to shape and create the way fans enjoy, watch and share their experiences," he said.

"As the sport gets bigger, the players will become higher profile, which will create a whole new raft of well-known sporting heroes for the brands to associate themselves with."

"When we go past the tipping point - it feels like the time is now - and female football stars become as mainstream as their male counterparts and are being emulated in playgrounds, there are rich sponsorship opportunities," he argued.

Data sourced from Marketing; additional content by Warc staff

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Brazil leads LatAm digital trends

3 July 2015
NEW YORK: Mobile and programmatic are strong emerging trends in digital marketing in Brazil according to an industry figure.

Users in Latin America are very highly engaged with mobile, Maren Lau, CMO at IMS Internet Media Services, a digital marketing and communications company with ten offices across the region, told eMarketer.

And she highlighted geolocation as being especially "hot" at the moment. "If you go to Brazil, you see that the taxi drivers and everyone else are using geolocation platforms," she said. "In Mexico as well, it is very popular."

Part of the reason is the investment that Brazil made ahead of last year's World Cup in things like 4G infrastructure and wifi in stadiums. "These kinds of capabilities … really provide a context [where] mobile can thrive," Lau noted.

And consumers are responding in a manner that is making Latin America is a mobile-first region. "As digital consumers grow, they're starting to use mobile and may not even have a computer," said Lau – upgrading from a feature phone to a smartphone means they don't have to invest in a desktop or a laptop.

This new type of digital consumer is also open to engaging with brands and receiving information from them, Lau reported, "as long as it's relevant".

Brazil's economy has hit a difficult patch, which has been reflected in falling advertising expenditure, but Lau said the share of digital was continuing to grow, with advertisers and agencies showing particular interest in programmatic.

"Programmatic is certainly a trend or a development in digital advertising overall," she said. "I see it gaining traction in Brazil first, then in other areas of Latin America. The reasons behind it are very similar to why programmatic is growing in the US –wanting to optimize your ROI and reach audiences."

But a lack of available digital inventory is holding up its progress. "And what is available is not yet piped into major programmatic platforms. So there's still a lot of work that needs to be done."

She observed that most advertisers continued to take a traditional approach – buying a demographic via a certain media – but as they became more comfortable with the idea of buying an audience, then "programmatic offers a huge advantage and provides tremendous value".

Data sourced from eMarketer; additional content by Warc staff

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Reckitt Benckiser looks to mcommerce

3 July 2015
GURGAON: Reckitt Benckiser, the consumer goods business, anticipates that in future almost one third of its sales in India will come via mobile commerce, a leading executive has said.

Nitish Kapoor, regional director at Reckitt Benckiser South Asia, made the remarks in conversation with the editor-in-chief of Businessworld at the launch of the latter's Marketing Whitebook.

Kapoor noted that currently ecommerce accounted for maybe only 0.5% of all FMCG sales in India, a proportion that was predicted to grow to anywhere between 3% and 5% over the next five years, Exchange4Media reported.

"China moved from this level to 15% in less than seven years," he said. "For us, we can see up to 30% of our business coming from m-commerce, not e-commerce."

He was less concerned about the price points of individual products online than the fact that Reckitt Benckiser had a wide portfolio of products available across the household products, health and hygiene categories.

Typical prices might range anywhere between Rs 100 and Rs 500, but, he added, "we launched a product that was priced at Rs. 3000 ($47), and 90% of our sales – multiples of Rs. 10 crore – are coming from online".

His approach to spending on digital advertising was similarly pragmatic. When deciding where to allocate resources, "it primarily depends on the product categories, reach, cost and effectiveness.

"For example, 100% of our spends for Durex are on digital," he explained. "This is because we believe we have a very narrow audience to focus on, and we can achieve high effectiveness by the digital route."

And, of course, digital will only become more significant in the years ahead, as prime minister Narendra Modi emphasised earlier this week when launching Digital India Week. He spoke of his dream of "a digital India where high-speed digital highways unite the nation" as he sought to avoid a divide between digital haves and have-nots.

While his focus is on the use of digital to improve governance, health and education, the investment in infrastructure and high-speed broadband that will be necessary to turn dream into reality will ultimately benefit brands as well.

Data sourced from Exchange4Media, Hindustan Times; additional content by Warc staff

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Aussies dislike targeted socmed ads

3 July 2015
SYDNEY: The majority of Australians are comfortable with social media monitoring to detect possible terrorist activity but only one third as many like the idea of targeted advertising on social media.

Part of a global study covering 12 countries, the Unisys Security Insights: Australia social media monitoring report from the global IT firm surveyed 1,210 adult Australians and found that while 79% accepted the need for organisations to check social media for purposes such as the detection of terrorist activity, just 27% were happy about the idea of specific individuals being identified for targeted advertising or offers.

Younger Australians aged 18-24 years, however, were the most comfortable with social media monitoring for targeted advertising and offers, B&T reported.

Two other Asia-Pacific countries were also studied and while the results from New Zealand were broadly similar to those of Australia, it was clear that the views of Malaysian consumers were very different, in at least some respects.

A significantly smaller proportion (59%) were comfortable with monitoring social media for terrorist activity, but they were twice as likely (60%) to welcome the idea of targeted advertising.

Across the other purposes suggested as reasons for monitoring social media – identifying issues of public concern, tracking sentiment about how an organisation is performing, and evaluating job candidates for positions of trust – there was broad agreement across all three countries.

The study observed a shift in attitudes as consumers became increasingly aware of the power of big data analytics. Where once they had felt able to enjoy a sense of anonymity because of the sheer effort involved in sifting social networking data, that was no longer the case thanks to improved technology.

In the Observer, columnist John Naughton recently argued that it was wrong to assume that people put up with companies “spying" on them because they ended up getting a good deal out of it – in terms of “free" internet services.

He cited US research which suggests consumers are not really engaged in a trade-off but are rather resigned to giving up their data, seeing it as inevitable and feeling powerless to stop it.

Data sourced from Unisys, B&T, The Observer; additional content by Warc staff

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Blog: This girl can?

3 July 2015
What's the best approach to sports marketing to Chinese women? Edward Bell examines the different approaches taken by global leaders adidas and Nike and by challenger brands like Under Armour and New Balance.

warc

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Brands distance themselves from Trump

3 July 2015
NEW YORK: He may be a billionaire and a US presidential candidate, but many brands have concluded that the nation's Hispanic community is more valuable to them than any potential association with Donald Trump.

Macy's, the department store chain, has joined a growing list of brands that have ended their relationship with "The Donald" following his comments about Mexicans when he announced his intention to seek the Republican presidential nomination.

Most would-be politicians might think it wise to avoid alienating almost one fifth of the electorate before the end of their first campaign speech, but following Trump's derogatory remarks about Mexican immigrants to the US, no amount of subsequent back-peddling was likely to rescue the situation. "Some, I assume, are good people," he said at the time.

Later he went on ABC News to explain: "I love the Mexican people, I have great respect for Mexico."

But consistency has not been a watchword in how the Trump brand has handled the PR disaster. When Macy's said it was ending its ties to Trump, he accused it of supporting illegal immigration and added that it had been his decision to end the relationship.

And in comments that will surely have upset another large ethnic minority, he said that he had never been happy that the Trump menswear collection sold at Macy's was made in China, MediaPost reported.

The first brand to sever ties was Univision, the Hispanic TV network owned by Mexican billionaire Carlos Slim. Trump promptly replied that he was suing Univision for $500m in damages.

Another network, NBCUniversal, which has worked with Trump on the Miss Universe pageant and Trump's own reality television series, The Apprentice, also ended its relationship with him.

The billionaire advised that "their contract violating closure of Miss Universe/Miss USA will be determined in court".

While Trump struggles to extricate his candidacy from this mire, marketers have long known the importance of the Hispanic community, which is predicted to make up almost one third of the population by 2060.

Nielsen data, for example, shows they spend at least $10 more per visit than the total market (Hispanic and Non-Hispanic combined) on all forms of consumer packaged goods.

And brands have extensively researched Hispanic consumers and their media habits, finding they are more likely to share content and engage with brands online than the general population.

Data sourced from ABC News Radio, MediaPost; additional content by Warc staff

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Brands can grow only with trust

2 July 2015
LONDON: Although there is evidence that consumers are more willing to exchange personal data and are more aware of its value, it is vital that brands retain their trust, a new report has argued.

Trust is by far the most important consideration for consumers when deciding whether to share their information and brands will not grow without winning it, according to the Direct Marketing Association (DMA).

Working with analytics firm Acxiom and the Future Foundation, a consumer trends research firm, the DMA received responses from 1,000 UK consumers.

A full 39% rank trust in an organisation as their top consideration, a far higher proportion than freebies (10%) or discounted offers (6%).

While the report is the latest in a long line of surveys that have emphasised the importance of trust for effective brand engagement, the DMA survey also suggests consumers have become more accustomed to data-sharing. It seems they have become savvy about its value, too.

The proportion of consumers who expect to exchange information when making a purchase has risen to 73% from 65% in 2012 while more than half (55%) accept that the exchange of data can make free products available.

Of particular note for brands, the report identified a growing "consumer capitalist" mindset whereby consumers have an increasingly sophisticated understanding of the value of their data.

Those who see their data as their own to trade has increased from 40% to 52% over the past three years, which suggests consumers may be open to offers from brands while they also seek to secure a good deal.

Chris Combemale, CEO of the DMA, said these shifts in attitude suggest consumers are more interested in creating "a progressive culture of data exchange".

"Brands need to capitalise on these positive trends and take the lead by nurturing the growing pragmatism and helping create a culture of data exchange that will benefit all," he said.

"Without trust, brands will not grow. They must look at the way they deal with consumers and their data, and take their privacy concerns seriously."

Data sourced from DMA; additional content by Warc staff

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Mars does not seek to be loved

2 July 2015
GLASGOW/LONDON: Mars, the international food and drinks business, does not believe that its marketing strategy should be driven by a need for consumers to "love" the brand, the company's global CMO has said.

Instead, Mars seeks to engage consumers by taking a more realistic approach to the relationships people develop with brands and with each other.

Speaking to The Drum, Bruce McColl drew parallels with people's normal social and family lives when there often is not the time to make real connections.

If that is the case with personal relationships, then it should apply even more for brands, which therefore should accept the situation and focus on how that particular insight can support strategy and creative.

"For most people out there buying our brands they don't love us; we just have to accept that," he said. "It goes against some of the popular stuff out there, [but] it's hard enough to have relationships with real people.

"If you think about the people in your life, your family and friends, how much time do you have to really connect with them? To ask consumers en masse to have that kind of relationship with brands is one step too far."

He said Maris is trying to generate ideas that resonate with consumers at a more human level and then use technology to get across the message.

A recent campaign for Snickers, for example, used the tagline "You're Not You When You're Hungry", a simple insight that could be used in engaging ads.

Reaching consumers through individualised messaging is also an important element of the company's strategy and McColl saw a significant role for programmatic.

"The big change that's happening now is the way people are shopping and when you think about tailoring, or starting to merge how you communicate with how people buy, then programmatic and the ability to individualise messages there start to get very exciting," he said.

Data sourced from The Drum; additional content by Warc staff

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90% of TV viewers like to binge

2 July 2015
SAN JOSE, CA: Binge-watching TV, or watching more than three episodes of a series a day, is enjoyed by a full 92% of viewers but it seems it can also induce lost sleep and even sadness, a new survey has revealed.

According to TiVo's latest Binge Viewing Survey – a poll of almost 12,500 consumers and 30,000 of its own subscribers – the activity is gaining in popularity at the same time as its image improves.

Just two years ago, 53% of respondents viewed binge-viewing in a negative light but this has now fallen to under a third (30%).

Such is the demand for wanting to catch up with their favourite shows that almost a third (31%) of respondents report losing sleep thanks to binge-watching while 37% has spent an entire weekend bingeing on a show.

The digital video recording company also revealed that over half (52%) experience feeling sad when they get to the end of bingeing a series.

Turning to what viewers enjoy watching the most, TiVo reported that two-thirds (66%) like to use Netflix and watch its original content, such as "House of Cards" and "Unbreakable Kimmy Schmidt".

TV viewing is evolving rapidly as streaming services, such as Netflix, Hulu and Amazon, release more original programming and TiVo said it expected this trend to continue.

As for their motivations for binge-viewing, the survey found 28% simply want to catch up on TV while 17% do so because they had learned about a show after several episodes had already aired.

The findings also reveal that almost a third (32%) deliberately put off watching an entire season of a show until they can watch the whole season at once.

Finally, 61% say they binge on three or more episodes of the same show in one day because they fell behind while 39% believe some shows are better when watched back-to-back.

Data sourced from TiVo; additional content by Warc staff

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China is two-speed consumer market

2 July 2015
BEIJING: China is a two-speed consumer economy with optimistic, "high-speed" households expected to generate 90% of new consumption by 2020 while "low-speed" consumers are less willing to spend, a new report has said.

These high-speed households, consisting mostly of the urban middle-class, currently number 81m people and generate $1.7tr of the $3.2tr in total urban consumption, but their numbers will swell to 142m by 2020 when they will account for $3.8tr of the $5.6bn in total urban consumption.

Crucially, they are expected to power consumer spending in the years ahead, according to The Boston Consulting Group (BCG) China Center for Consumer and Customer Insight's annual survey of consumer sentiment.

The report said that households with income growth exceeding 5% in the past year are twice as likely to spend more in the coming year than households with slower income growth.

Also, the average affluent household expects nearly 11% income growth while the average aspirant household – those with lower incomes – expects just 6%.

This five percentage point difference, given the vast disparity in income levels between these two groups of consumers, translates into a 20-fold difference in actual earnings, BCG said.

It is also expected that total spending by less affluent urban consumers, or "low-speed" households, will grow by just 3% a year from 2015 to 2020.

Taken together, there are "vast implications" for consumer-facing companies, BCG advised, because a mass approach to such a huge market simply will not work.

It said companies will need to adopt a multichannel approach because high-speed consumers are digitally savvy and active online shoppers.

Demographic and geographic changes over the next five years also will require companies to broaden their physical distribution channels if they want to reach these high value consumers.

Of today's 81m high-speed households, 46m are located in lower-tier cities, but it is expected there will be 84m of them in lower-tier cities by 2020.

BCG went on to predict that, by then, companies will need a presence in 615 cities in order to reach 80% of these high-speed households.

"By focusing on the high-speed parts of the Chinese consumer economy, companies can avoid getting stuck in the slow lane," the report concluded.

Data sourced from BCG; additional content by Warc staff

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Auto brand loyalty at a 10-year high

2 July 2015
SOUTHFIELD, MI: More than half (52.8%) of US car buyers kept to the same brand when buying a new vehicle in the first quarter of 2015, the highest loyalty rate for a decade, according to analysis of recent car sales.

IHS Automotive, a market intelligence provider for the industry, attributed the increase in loyalty to there being more models on the market as well as a 62% rise in the rate of vehicle leasing over the past 10 years.

Improved new vehicle quality was also a factor as were the discontinuation of some well-known brands during the economic downturn, good finance options and effective marketing.

"The increased number of different models within brands makes it easier for households that may need a different type of vehicle to maintain their loyalty," explained Tom Libby, manager of automotive loyalty and industry analysis at IHS Automotive.

"In addition, the increased popularity of leasing since the downturn has helped significantly as lessees are consistently more brand loyal compared to retail owners."

Several leading brands benefitted from these industry trends with all them experiencing high loyalty rates. They included: Chevrolet, GMC, Infiniti, Jeep, Land Rover, Lexus, Lincoln, Mazda, Mitsubishi, Nissan, Porsche, Subaru and Volvo.

The number of different car models sold in the US increased 12% since 2005 and the wider choice has increased the probability that new purchasers will remain loyal to a particular brand.

Furthermore, the number of brands has decreased since the recession, so former owners of discontinued brands, such as Pontiac, Mercury or Saturn, are now returning to market and being forced to switch to a surviving brand.

Manufacturers and marketers are well aware that retaining customer loyalty is more cost effective than having to win over new customers, the report said.

But it warned: "It is critical that they also continue their conquesting activities in order to compensate for the normal churn in their customer base." Most brands lost more customers than they kept in 2014, the report pointed out.

Good product, marketing and financing will be even more important in the battle to win new customers and the report advised brands to concentrate on understanding the ownership life cycle – being able to predict who will return to market and when.

Data sourced from IHS Automotive; additional content by Warc staff

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Emojis deliver for 1-800-Flowers

2 July 2015
NEW YORK: Emojis have helped 1-800-Flowers, the flower and gourmet food delivery firm, engage mobile consumers in a way which reflects its core brand "mission".

Amit Shah, the company's svp/online marketing, mobile and social, drilled down into this subject at the Mobile Media Summit Upfront, an event held during Internet Week 2015 in New York City.

More specifically, he discussed a pack of mobile "stickers" that was released by the brand, and which could be used on various apps, in the run up to Mother's Day this year.

"The thing that we were trying to do is get very close to our mission," he said. (For more, including further details about this campaign, read Warc's exclusive report: Emojis deliver brand benefits for 1-800-Flowers.)

"What we wanted to do was consistent with our mission, which is helping people express themselves, and send and deliver smiles.

"We wanted to come up with something that really captured Mother's Day and allowed people to have this expression outside of sending a physical gift as well."

Such a strategy, he suggested, was the result of careful consideration from 1-800-Flowers regarding the various communications options currently fighting for supremacy on the "contested space" of mobile.

"Within that contested space, if you think about it, messaging definitely has aggregated the audience at scale. And we are talking about hundreds of millions of people," said Shah.

"So when we started really thinking about how should we really understand these mediums of expression which are establishing themselves as … this currency in this new evolving media, we were drawn to messaging."

Having decided upon messaging apps, emojis represented a natural space for 1-800-Flowers – which specialises in providing small moments of happiness – to play.

"Within messaging, I think a really interesting thing to note is that emojis are not expression-light but expression-heavy," Shah said.

"What that really means is that people are now using this medium to go a little bit deeper and [be a] little more bit more interpretive about how they exchange communications."

Data sourced from Warc

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Deadline extended for Warc Asia Prize

2 July 2015
SINGAPORE: The deadline for the Warc Prize for Asian Strategy has been extended to 30 July.

Now in its fifth year, the free-to-enter Prize is Asia's leading showcase for smart strategic thinking in marketing, with a $10,000 prize fund for winning papers. Further details, including entry kit and entry form, can be found on the Prize website, www.warc.com/asiaprize.

BV Pradeep, Unilever's global vice president of consumer & market insight and chair of the judging panel, has highlighted the areas where he will be looking for new thinking, including changing consumer behaviour, brand experiences, mobile, ecommerce and research.

"There's opportunities for path-breaking work you could see today that will be the new rules of tomorrow," he said. "I'm looking forward to seeing people writing these rules today and saying 'I'm leaving a legacy behind for tomorrow's marketing'. I'm very excited to see that happening in Asia."

Warc will award Gold, Silver and Bronze awards to the best examples of strategic thinking in marketing in four categories: East Asia, South Asia, Southeast Asia and Multimarket for campaigns running in three or more markets.

The best overall paper will win the $5,000 Grand Prix. The 2014 Grand Prix winner – 'Kan Khajura Tesan', a mobile phone service developed by from Lowe Lintas in Mumbai and PHD India – went on to be named the world's best campaign in the annual Warc 100 rankings.

In addition, Warc will award five $1,000 Special Awards for excellence in specific areas which reflect industry feedback on key strategic challenges in Asia.

These include the Market Pioneer Award for creating a new category or market, the Channel Thinking Award for achieving brand objectives using an innovative channel strategy, the Local Hero Award for a challenger Asian brand taking on larger competitors, the Asia First Award for an insight or innovation that the rest of the world can learn from, and the Research Excellence Award for smart use of research.

The Prize will be judged by a group of senior client-side marketers and agency-side strategy experts. Details of the judging panel can also be found on the Prize website.

The deadline for entries is 30 July 2015, and the winner will be announced in November. All cases that win an award will be showcased in the Asia Strategy Report, a study of smart strategic thinking in the region published after the competition has ended.

Data sourced from Warc

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UK consumer confidence at 15-year high

1 July 2015
LONDON: British consumer confidence is at its highest level since at least early 2000 and this could translate into a busy time for retailers, a new poll has shown.

According to research firm GfK, its UK Consumer Confidence Index jumped six points in June to register an overall score of +7 with all five measures used to calculate the Index also seeing increases.

Most encouraging for retailers is the sharp increase in the number of consumers agreeing that "now is a good time to make a major purchase", such as electrical goods or furniture.

GfK's Major Purchase Index leaped 14 points this month to +16 compared to negative sentiment for the same period last year.

"We're seeing a dramatic uptick in confidence this month, a real post-election bounce that's put a spring in the step of consumers across the UK," said Joe Staton, head of market dynamics at GfK.

"Across all key measures we're reporting higher levels of financial optimism for both our own personal situation and for the general economy as a whole for the coming 12 months," he added.

Buoyed by near zero inflation, as well as rising employment and wages, UK consumers are significantly more upbeat than they were this time last year.

GfK's measure for expectations for the general economic situation over the next 12 months rose four points to +4 in June, while the measure for the general economic situation over the last 12 months increased three points to +4, or seven points higher than in June 2014.

Meanwhile, its measure covering changes in personal finances over the last 12 months rose five points to +4, or 13 points higher than in June 2014. Its index for personal finance over the next 12 months rose two points to +5.

The survey coincided with the release of official data that provided further good news about the UK economy, which grew more than expected in the first quarter.

The Office for National Statistics said GDP grew by 0.4% between January and March rather than 0.3% as it had previously calculated.

Data sourced from GfK, BBC; additional content by Warc staff

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15% of UK consumers block ads

1 July 2015
LONDON: As ad blocking becomes a growing issue for both publishers and online advertisers, a new survey has found that 15% of UK internet users, especially young men, have installed ad blocking software.

However, many of those who have signed up to the technology remain open to receiving ads, although that depends on their source and relevancy.

Only half (52%) want to block all ads, according to more than 2,000 UK adults questioned by YouGov for the Internet Advertising Bureau UK, while 12% just want to block certain content and 11% seek to avoid ads from certain websites.

Ads are most likely to be blocked if they interfere with a user's experience and nearly three-quarters (73%) say they're motivated to block ads if they are interruptive.

Interstitial and transitional ads are not directly referenced, but the survey results make clear that online consumers do not want to be interrupted.

More than half (55%) are also motivated to block ads if they are "annoying", such as pop-ups, while 54% do so because they think ads slow down web browsing. Irrelevant ads put off another half (46%).

Men (22%) are much more likely than women (9%) to block ads and youth is also a factor with over a third (34%) of respondents aged 18 to 24 being willing to block ads compared with about a fifth (19%) of 25-34 year-olds.

The survey also explored attitudes about the interdependency between advertising and the provision of free content.

Surprisingly, only 44% of respondents are aware that most websites are free because they are supported by advertising, yet only 10% are less likely to block ads after being told.

Two-thirds (66%) would prefer to access free content with no ads, only a fifth (21%) prefers free content in return for receiving ads, while just 3% would pay for ad-free content.

This finding prompted Guy Phillipson, CEO of the IAB UK, to observe that many consumers "want to have their cake and eat it".

"The bottom line is that if the web didn't have ads, most sites could only exist by charging subscriptions," he said.

Data sourced from IAB UK; additional content by Warc staff

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Neuroscience studies sponsorship effectiveness

1 July 2015
NEW YORK: A paper in the latest issue of the Journal of Advertising Research (JAR) offers a new way to examine the marketing efficacy of sponsorship programs.

Visual-imagery theory represents the starting point for a paper written by Angeline G. Close (University of Texas at Austin), Russell Lacey (Xavier University) and T. Bettina Cornwell (University of Oregon).

With all the action on the field of play, they ask, how effective are programs that try to not just to grab consumers but also engage them as enthusiasts for a service or brand?

The study then uses the tools of neuroscience to dig down into the principal dilemma posed by any sort of sponsorship initiative: are consumers making the connection between the event and the sponsor?

"Individual differences in visual processing and need for cognition played significant roles in how an attendee perceived the sponsor's products," the authors reveal by way of an answer.

Furthermore, they offer, the overall results of their study "showed how attendees who rated the event as 'higher quality' had a higher attitude toward the sponsor's products that were showcased at the tournament.

"That relationship was moderated by visual-processing style; that is, attendees who were visual processors showed an especially strong link from event quality to enhanced attitude."

The article was entitled "Visual Processing and Need for Cognition Can Enhance Event-Sponsorship Outcomes – How Sporting Event Sponsorships Benefit from the Way Attendees Process Them".

It appeared within a four-part special "How Does Neuroscience Work in Advertising?" section in JAR alongside a consideration on the reliability of new neuromarketing tools, a psychophysiological approach for measuring response to messaging and the use of eye tracking in determining audience attention to competing editorial and advertising content.

Data sourced from Journal of Advertising Research; additional content by Warc staff

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Lenovo boss sees consumerist future

1 July 2015
HONG KONG: China's rapidly expanding middle class and the Chinese government's push to develop a consumer-led economy offer huge opportunities, the chairman of Legend Holdings has said.

Speaking to the South China Morning Post, Liu Chuanzhi outlined plans for his privately-owned conglomerate to expand its portfolio to meet an ever-growing appetite for better consumer products and services.

Legend, which is perhaps best-known as the parent company of tech vendor Lenovo, also spans a wide range of business areas from real estate to healthcare and energy. It is also a decade since Lenovo's ground-breaking acquisition of IBM's personal computer business in 2005.

Liu said that with more and more Chinese experiencing popular goods and services when travelling abroad, this would spur similar demand at home.

His next focus, he said, would be on any business, in China or overseas, that can help Chinese people "eat, dress, live and travel better".

"We currently focus more on consumer-related businesses as I feel the Chinese government is very serious about how to get its people to spend so we can boost domestic consumption, which is really important to national economic growth," he said.

To that end, Legend is investing in China Auto Rental, the country's top car rental service provider, as well as Didi Kuaidi, a Chinese taxi-booking app sometimes compared to Uber, the controversial US cab service.

Innovation is the key to success when seeking to appeal to Chinese consumers, he said, just as transparency is vital for Chinese brands hoping to expand overseas and win over international consumers in their own markets.

"For Legend, I think we should dare to try more new things," said 71-year-old Liu. "For China as a country, innovation is all about trying new things too."

Data sourced from South China Morning Post; additional content by Warc staff

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Fifth of US grocery shopping is online

1 July 2015
LOUISVILLE, CO: Online grocery shopping in the USA is continuing to grow in popularity, as confirmed by a new survey of US consumers that reveals 54% increased their online activity by an average of 29% over the past year.

Door to Door Organics, a Colorado-based online grocery service, polled 1,100 US adults in the first week of April 2015 and found only 4% had decreased the amount of grocery shopping they carried out online.

It remained the same for 42% of consumers and, taken together, it meant that the online option accounted for just under a fifth (19%) of all grocery shopping last year.

This online trend is being driven partly by the pressure of modern-day living and its impact on consumers' spare time, causing them to place a premium on time-saving convenience.

Survey respondents indicated they had an average of only 82 minutes of free time a day and spent an average of 69 minutes each week shopping for groceries. They valued one hour of their time to be worth $56 per hour.

The convenience of online shopping went some way to meeting their desire to save time but, encouragingly for brick-and-mortar retailers, the survey also showed consumers relied on multiple options to carry out their weekly shop.

Only 13% of respondents said a single outlet, whether online or a physical store, met their weekly grocery shopping needs.

About one-third (34%) shopped at two stores once a week and a full 53% shopped at three or more grocery stores each week, including both online and brick-and-mortar retailers.

Commenting on the report, Chad Arnold, the CEO of Door to Door Organics, advised retailers to ensure they meet this growing desire for convenience.

"It's becoming increasingly harder for consumers to find a 'one-stop shop' that meets all their grocery shopping needs," he said.

"Today's grocery shopper appreciates variety, wants to have easy access to all kinds of produce and products, but also values convenience based on being busier than ever.

"This is one of the primary reasons why consumers are making online grocery shopping a more regular part of their week, and I don't expect that trend to turn downward anytime soon."

Data sourced from PR Newswire; additional content by Warc staff

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Blog: Brands and the Women's World Cup

1 July 2015
Men's football tends to hog the headlines. But, says Luca Massaro of WePlay, a growing interest in women's sport means the FIFA Women's World Cup in Canada has become a major point of engagement for fans and brands this summer.

Warc

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HUL creates new consumer clusters

1 July 2015
MUMBAI: Hindustan Unilever (HUL), the largest FMCG group in India, has been re-organised so that it can better serve and engage with the country's diverse base of consumers, the company's chairman has announced.

Speaking at HUL's 82nd Annual General Meeting, Harish Manwani outlined a strategy, called "Winning in Many Indias", under which its four sales branches have been segmented into 14 consumer clusters.

"This model brings us closer to our local consumers and provides us with a more granular understanding of consumers and competitors," he said, in comments reported by the Economic Times.

"It helps us serve our diverse consumer base in more differentiated and relevant ways across the country," he continued.

"This is essential for the long term growth of the company and also fulfils our commitment to contribute to India's growth and development in an inclusive and sustainable manner."

By bringing its distribution capabilities and presence closer to the consumers it serves, HUL's new model is designed to underpin its strategic aim of becoming the market leader in most of the categories it competes in.

However, the company also sees opportunities in less-developed parts of rural India and regards ecommerce and mobile technologies, supported by effective marketing, as levers for the growth in this market.

India is the third largest country in the world for internet usage, Manwani said, so HUL is using mobile technologies "to reach parts of rural India that are still in the media dark".

Citing the company's Kan Khajura Tesan mobile radio initiative, Manwani said HUL had broadcast more than 700m minutes of entertainment over the last 15 months and that its brand messages had been heard 425m times.

Its well-publicised sustainability initiative provides another opportunity to reach out to consumers, both rural and urban, while serving a larger purpose.

Data sourced from the Economic Times; additional content by Warc staff

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UK programmatic spend surges

30 June 2015
LONDON: Almost half of UK online display ads were bought through programmatic technologies in 2014, amounting to just under £1bn in spending according to a new study.

Research for the Internet Advertising Bureau (IAB) UK was based on detailed submissions from 31 companies and supplemented by a further 27 in-depth interviews and group discussions with industry participants.

This revealed that of the £2.13bn spent on display ads across the internet and mobile in 2014, 45% (£960m) was traded programmatically – up from 28% in 2013.

The biggest losers from this shift in spending were the ad networks, whose share plummeted from 22% in 2013 to just 6% in 2014.

Direct sales between publishers and buyers remained the biggest single way in which digital display advertising was traded, although its share slipped back from 51% to 49%.

"Programmatic's role in digital ad buying has grown from virtually zero to nearly half of all transactions in just five years," noted Tim Elkington, IAB UK chief strategy officer.

"However, the impact on mobile has been even greater due to its more fragmented ecosystem providing a ripe breeding ground for intermediaries."

Programmatic's share of mobile ad sales had nearly doubled from 37% to 64% in the same period, while that of video ads reached 18%. Most of the balance was again accounted for by direct sales – 30% in the case of mobile, 79% for video – with ad networks taking only a small single-digit share.

Elkington added that programmatic was no longer just a direct-response tool. "Its increasing role in video ads – a branding medium like TV – shows programmatic is on advertising's top table," he stated.

"Consequently, due to the rise in mobile and video ad spend, we estimate around 70-80% of all digital spend will be programmatic by 2018."

Martin Kelly, CEO and co-founder of programmatic buying company Infectious Media, placed the shift to programmatic in a wider context, as he explained to Marketing Week that advertisers were unhappy with agency trading desks.

"The increase in [programmatic] spend has largely been a straightforward divert from the ad networks, with most advertisers still missing out on the advantages programmatic can offer. This is why we are seeing the [current] deluge of global media pitches."


Data sourced from IAB UK, Marketing Week; additional content by Warc staff

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Wimbledon sponsors miss the spot

30 June 2015
LONDON: The UK public is really only interested in tennis for two weeks a year during the current Wimbledon tournament and is likely to remain largely indifferent to the marketing efforts of many brands that have associated themselves with the sport, a new analysis suggests.

Marketing Week utilised researcher YouGov's Profiles and BrandIndex tools to assess the fit of sponsoring brands with the typical tennis fan and reported that while some long-standing supporters of the tournament saw an uplift in brand metrics, "newer recruits … may find it difficult to raise awareness and brand perceptions".

In 2014, for example, the BrandIndex score – a daily measure of brand perception among the public – for soft drinks brand Robinsons moved steadily upwards during the course of the event, rising from 29.4 to 34.2

Robinsons, however, has been sponsoring Wimbledon for 80 years and has just extended its tie-up for another five years.

"At Wimbledon we have always valued the importance of long-term relationships and our partnership with Robinsons has become one of the enduring memories of the British summer", said Mick Desmond, commercial director at the All England Lawn Tennis and Croquet Club.

Stella Artois, in contrast, came on board for the first time in 2014, having previously sponsored the Queen's Club Championships event that effectively acts as a warm-up for Wimbledon. Despite this, its BrandIndex score started at 17.4 and ended at 16.8.

Marketing Week also noted a divergence between the profiles of Robinsons' consumers – typically a middle-aged mother in the C2DE bracket – and those of Wimbledon fans, who are mostly ABC1 older women (60+) with significantly higher disposable income.

But it said that Robinsons' lengthy association with the event means it can overcome such differences, something a newer sponsor such as Stella Artois may find difficult, not least as Stella drinkers tend to be more interested in football and boxing.

Such disparities suggest that the newer brands are seeking to use their involvement to change consumer perceptions and to reach beyond their existing consumer base.

But this will take time to come to fruition, said Marketing Week, especially given that there are relatively few branding opportunities at the event itself and that no court-side advertising opportunities are permitted.

Data sourced from Marketing Week; additional content by Warc staff

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Marketers seek second-party data

30 June 2015
NEW YORK: Second-party data is an effective, if under-utilised, source of information for marketers but one industry figure has observed that situation beginning to change.

"Choosing between first-party and third-party data has been a constant dilemma forcing marketers to compromise between data quality and scale," Mike Sands, CEO at marketing technology firm Signal, wrote in Ad Exchanger.

"Now I'm seeing the conversation shift to second-party data, which is essentially someone else's first-party data."

A recent report by Signal and Econsultancy – The Promise of First-Party Data, based on responses from 300 senior marketers at companies with at least $100m in revenues – highlighted that the fact that brands' owned, first-party data is the shortest and best path to superior results.

Third party data, while plentiful, is often based on inferences about intended behaviours rather than facts derived through first-hand customer relationships, Sands noted.

But there are areas where second-party data can be shared to mutual advantage. For example, an airline and hotel chain could work together to target the same business travellers with the benefit of both data sets.

Sands pointed out that second-party data could help marketers address the challenge of developing an overview of customers across devices and channels and so target marketing activities more appropriately and create more personalised brand experiences.

Signal's study showed that 77% of the highest-performing marketers regularly used second-party data, versus only 48% of their counterparts.

And 60% of marketers planned to increase their use of second-party data, a clear indication they are increasingly aware of the value in sharing such data.

Quite apart from making better marketing possible, Sands added, "second-party data can help brands monetise their data.

"Brands can add a revenue stream by sharing anonymized data with trusted partners."

Data sourced from Ad Exchanger, Econsultancy; additional content by Warc staff

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Holiday Inn targets 'lookalikes'

30 June 2015
NEW YORK: Holiday Inn, the hotel chain owned by InterContinental Hotels Group (IHG), boosted several core brand metrics by targeting "lookalike" web users who shared characteristics with its most attractive customers.

Phil Maves, director/audience delivery at TNS North America – the WPP-owned research provider which worked on the "lookalike" program with IHG – discussed this topic at the Market Research in the Mobile World conference.

He outlined how the firm began with a research panel of 10,000 prospective patrons and whittled them down to the 2,200 shoppers that were willing to increase their spending with Holiday Inn.

"It's two audiences, really, in one," he said. (For more, including details about the methodology and results, read Warc's exclusive report: How "lookalike" consumers boosted Holiday Inn.)

"It's that core of people who … already buy your brand. They like it, they're happy with it and they're willing to buy more in the future."There's also that 'conquest' audience: that acquisition group of people who don't currently buy it, but they have a favourable view of the brand and they're willing to buy it in the future."

Having identified these attractive prospects, TNS allied with data experts at KBM Group – which is also part of WPP Group – to earmark 15m online consumers who shared their specific habits and characteristics.

Mindshare, which belongs to the same holding company and is IHG's media shop, then purchased highly targeted inventory aimed solely at this cohort.

"There's generally been a gulf between market research and media buying. We wanted to bridge that gap," said Maves.

"It's not about taking a radical leap into the unknown: it's more pivoting and saying, 'What else can we do with this data to reach audiences online?'"

While attempting to reach "lookalike" shoppers is a common strategy, Maves argued the bespoke research underpinning the efforts for Holiday Inn was vital.

"Media buying agencies are dealing with lookalike models all the time," he said. "The difference being that we're starting with the research."

Data sourced from Warc

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US adspend dips in Q1

30 June 2015
NEW YORK: Total US advertising expenditure fell 4% to $37.4bn in the first quarter new data has shown, with spending by the ten largest advertisers declining even more steeply.

Jon Swallen, chief research officer at Kantar Media North America, advised that the figures were skewed by comparisons to last year and the $600m of incremental spend that had been generated by the Sochi Olympics.

"Excluding the impact of special events, core ad spending measured by Kantar Media was down about 2% in the period," he said.

"Even after taking into account assumptions about the growth of spend on other unmonitored media, it has been a relatively slow start for the ad market in 2015."

The other unmonitored media no longer includes paid search, which Kantar Media included in its analysis for the first time. Ad spending here, which reflects text ads on the Google and Bing search engines, rose 7%.

Kantar continues, however, to exclude two fast-growing ad formats – video and mobile – from its figures for online display advertising which declined 8.7%, in part because consumers are shifting usage to mobile.

Overall, 16 of the 21 individual media types monitored by Kantar Media had lower ad spending in the first quarter.

Spending on network TV was down 9.2%, but was flat if the effect of the Winter Olympics was removed. Spot TV fell 6.8% and Syndication expenditures 4.9%.

Cable was one of the few growing areas, along with Spanish-language TV. The former rose 4.1%, aided by an increase in the amount of available paid ad time as networks packed more spots into programming to help offset lower audience ratings.

Spending by the ten largest advertisers declined 10.6% to $3.7bn in the quarter, and among the top one hundred – a diversified group accounting for two-fifths of all measured ad expenditures – budgets fell 6.6%.

The decline was especially pronounced at Procter & Gamble, the world's largest advertiser, where a 24.5% decrease was registered in investments in TV, online display and print media. This, said Kantar, was "consistent with recent company statements about shifts in their advertising budgets".

Data sourced from Business Wire; additional content by Warc staff

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WOM vital for Chinese tourists

30 June 2015
SHANGHAI: Half of mainland Chinese travellers rely on their close personal contacts for information when looking for travel advice before turning to the internet to make travel bookings a survey has found.

For its Consumer Travel Tracker study, researcher GfK polled 1,000 Chinese respondents who had made a travel booking in the last three months and discovered that 52% talked to friends, family and colleagues in the first instance to get travel-related information.

This was the highest of all touchpoints, with search websites and online travel agent websites close behind with both of these on 51%.

"Even with the proliferation and growing consumer dependency on the internet for all kinds of information, the local norm of seeking information via word of mouth still prevails here," said Lawrence Liew, North Asia Director for Travel & Hospitality at GfK.

"However, the growing influence of the internet cannot be avoided, as the other top sources of travel information are still online touch points," he added.

While almost two thirds of all bookings are made online, this figure varied depending on the destination involved.

Traditional travel agencies retained a competitive edge when it came to Asian countries, while travellers were more likely to use online channels if travelling to Europe.

Asia is still the widely preferred option, however, with 78% of respondents confirming their travel plans to countries in this region. The top three destinations were Thailand, South Korea and Hong Kong (14% each), followed by Japan (11%) and Singapore (8%).

One in ten (10%) have booked holidays in Europe, while 6% have chosen to visit North America.

And while independent travel is growing, packaged trips still make up the great majority of online purchases. Fully 86% of respondents had bought this sort of holiday, while 55% said they had booked air tickets and 49% accommodation.

GfK also put the average trip spending for each traveller at RMB 15,000, equivalent to around half the average monthly household income.

Data sourced from GfK; additional content by Warc staff

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India's 'click farms' under spotlight

30 June 2015
MUMBAI: Indian 'click farms' are offering US and UK companies deals to boost their internet traffic and social media presence as part of a market that one expert estimates is growing at 20% a year.

An investigation by The Times of London found that interested parties could pay just $1 to generate 1,000 clicks or 1,000 or more Twitter followers or Facebook 'likes'.

One such entrepreneur explained that his "social media optimisation" operation could produce 1,000 Facebook 'likes' within a week. "It will take double the time for 2,000 and so on. Once the numbers increase, it will get faster. YouTube views are easier. I can give 3,000-4,000 per day."

The Times described a typical set-up where a few people in a small room clicked away on laptops to increase the popularity of paying clients.

Other operators have a more sophisticated approach. Australia's ABC News has reported on Indian IT professionals running automated click farms businesses on the side that can earn them the equivalent of a month's salary in just three days.

The market for false internet traffic may be worth $600m a year, according to David Sendroff, chief executive of US ad fraud detection specialist Forensiq. And he says it is growing at 20% annually.

"These click farms are generally coming out of places where labour is very cheap — India, Vietnam, Bangladesh. The real victims are the advertisers who end up buying space," Sendroff said.

Celebrities can make thousands of dollars for tweeting out a single endorsement and several have been accused of falsely inflating their social worth as a way to get more money from advertisers.

Search engines also consider social media influence, so increasing likes and followers has the potential to boost rankings in search engine results.

Data sourced from The Times, ABC; additional content by Warc staff

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Data can help create empathy

29 June 2015
CANNES: There is a tension between data and creativity, but its capacity to create greater empathy through personalisation should inspire marketers, according to an Admap and Kantar panel held at the Cannes Lions International Festival of Creativity.

An event celebrating the 2015 Admap Prize explored the intersection of data and creativity with Marc Mathieu, a member of the judging panel.

The Admap Prize is an essay competition which rewards excellence in strategic thinking. This year's question was along a similar theme to the panel: "Does Big Data inspire or hinder creative thinking?"

"Data has the ability to 'de-average' advertising," said Mathieu. "It offers personalisation."

He also argued for the human element of data. "If you go to the Uber website, you don't see data – you see people. Imagine the typical cab experience these days – it's not really human. With Uber, you know the driver's name and he knows yours. Tech allows for more empathy."

Mathieu observed a new value exchange around data. "It's not about Big Data, it's about personal data. And as an industry, we need to embrace that. It's not our data."

"Brands don't get built in the way they used to. The Googles and Apples of this world are the biggest brands. And we bring these brands into our life in 'micro moments' when we need them – because they know and anticipate what we need."

"We need to be powered with an understanding of them that could not be touched without technology and data."

"If we use it in a way to target people and sell them something, that will backfire. If we use it intelligently, it will change the way that marketing is done."

This year's Admap Prize was won by Ben Essen, head of planning at Iris Worldwide, who argued in his essay that the term Big Data reinforces the creativity-hindering idea that more data can give us more certainty.

Data sourced from Warc

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Digital, mobile shift emphasised

29 June 2015
GLOBAL: Digital and mobile continue to be the focus of marketing budgets according to the latest Global Marketing Index (GMI) which shows no end to the downward trajectory of traditional media.

The headline GMI registered an average 55.3 points in May – where a reading of 50 indicates no change and 60+ suggests rapid growth. This was a slight decline on the previous two months but still a clear sign that marketers across the world experienced increased business activity.

There were modest variances across the regions, with Asia-Pacific's index of 54.7 representing a 1.3 point decline on the previous month. Europe slipped back 0.2 points to 55.7 while the Americas edged up 0.6 points to 55.8. These figures are based on a three month moving average to mitigate abnormal seasonal variations.

Compiled by World Economics, the GMI provides a unique monthly indicator of the state of the global marketing industry because it tracks current conditions for marketers as well as their expectations for trading conditions, marketing budgets and staffing levels.

The key most significant finding of the June survey was that the allocation of marketing budgets assigned to TV continued falling, for the seventh month in a row, with an index value of 46.8, below the 50.0 'no change' level.

TV's falling share has been particularly severe in the Americas with an index value registered of only 40.1. The last month of TV growth in this region was recorded 12 months ago. TV expenditure also declined in the Asia-Pacific region with an index recorded of 45.0.

This decline was mirrored by falls in the marketing budgets allocated to OOH (48.5), radio (41.2) and press (33.8).

In contrast, internet media saw their share of marketing budgets growing rapidly in June, with an index value of 77.1 for digital and 73.9 for mobile. Very strong growth was experienced across all regions in these media.

"The Headline Global Marketing Index reading for June indicates that marketing activity is still growing across the world and in all regions," said Ed Jones, World Economics chief executive.

"Marketing budgets are still expanding and spending on mobile and digital media continue to take a rapidly growing share, while other media are declining."

Data sourced from World Economics; additional content by Warc staff

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Kellogg to boost mobile spend

29 June 2015
NEW YORK: Kellogg, the food group, is planning to boost its expenditure on mobile in reflection of changing shopper habits.

Christian Thompson, the company's senior director/shopper insights, discussed this subject at the 2015 Market Research in the Mobile World conference in New York.

"First off, we're thinking about our investment in mobile," he reported. (For more, including further shopper insights, read Warc's exclusive report: Research leads Kellogg into a mobile future.)

With its research showing that wireless devices have an increasingly important role on the path to purchase, the owner of Fruit Loops, MorningStar Farms and Pringles is now adapting to the evolving consumer landscape.

"Today, we invest in some areas of mobile usage. But it [has been] pretty minimal," Thompson told the MRMW delegates.

"Now we're shifting our dollars, and our marketing dollars, over from the traditional-side of things – on the TV commercials, and the feel-good things about Fruit Loops, and all that good stuff – into mobile, but in a strategic way."

The company's spending priorities will incorporate, in the first instance, products that frequently prompt its clientele to "interact on mobile".

Similarly, the Battle Creek, Michigan-based firm will look to categories where significant numbers of customers are "willing to participate" in this way – examples of which include meat-replacement products.

Discovering the retailers that "play really well in the mobile shopping arena" has been another central element of the organisation's mobile-focused research.

Chains that provide free WiFi, for example, tend to see higher levels of in-store engagement than their counterparts failing to offer such a service.

Added Thompson, "We're going to shift those retail dollars over to that. Now, it's not going to be all of them. But it is a sizeable shift in our aspect when it comes to our dollars." 

Data sourced from Warc

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Google addresses accidental clicks

29 June 2015
MOUNTAIN VIEW, CA: Google is looking to "maximize click quality" on mobile ads by blocking certain types of inadvertent clicking that lead to frustration for consumers and to increased costs for advertisers.

"Even as smartphone and tablet screen sizes get bigger, it can be hard for our fingers to keep up," said Pasha Nahass, Google mobile display ads product manager, in a blog post. "It's still so easy to click when you mean to swipe or to tap on a link or ad you didn't mean to."

A survey of 1,000 smartphone users by consulting firm PwC last autumn showed that almost half (49%) had clicked on a mobile ad by accident.

The same study revealed that 9% had clicked on an ad intentionally but had not viewed it all, while just 6% had clicked on an ad intentionally and subsequently interacted with the brand; 37% said they had never clicked on a mobile ad.

"As we continue to enhance our display ad formats to make them more engaging, we also strive to maximize click quality," Nahass added.

The latest improvements mean that smartphone users will have to click on the central part of the image to get to an advertiser's site or app. Google said it had identified the border area as being particularly prone to accidental clicks during scrolling.

There will also be a slight delay before ads become clickable, a period long enough, Google said, to give users time to assess the ad's content and to eliminate accidental clicks by people who hadn't expected to see an ad.

A third refinement will means that when users see in-app interstitial ads they will not be able to click the app icon of an install ad because of its proximity to the 'ad close' button. Instead, users will have to click on the call-to-action button to go to the app store page and install the app.

Not only should these steps reduce costs to advertisers as they will have to pay for fewer unintended clicks, but conversion rates should also increase. Google reported a 15% average conversion rate lift on ads that have included these updates.

Data sourced from Google, AdWeek; additional content by Warc staff

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Asia is a unique app market

29 June 2015
ASIA: The mobile app economy in Asia grew 77% last year, according to a new study which described this level of growth as "astounding" given it was starting from an already large base.

Flurry Analytics, the mobile analytics specialist, focused its attention on Asia where it tracks 610m monthly active devices and found that the surge in app sessions in the 12 months to April 2015 was being driven by three categories in particular.

Shopping & Lifestyle saw a 278% increase in session year on year, followed by News & Reading (+134%) and Utilities and Productivity (+89%). 

These are all consumer categories that provide a clue about the growing purchasing power and sophistication in the region, Chris Klotzbach, head of product marketing noted in a blog post.

Users in Asia have started to adapt their app usage for purposes beyond the traditional gaming and entertainment functions, he added. The Messaging & Social (+42%), Music, Media & Entertainment (+40%) and Games (+25%) categories were still growing, albeit at a much slower rate than before.

Games still led in one respect, however, as some 25% of mobile app time is spent in these activities. Shopping & Lifestyle was in second place (19%) followed by Utilities and Productivity (17%).

When Flurry carried out an analysis on engagement by gender, it found that Asia was unique, especially in the Photography, Lifestyle & Shopping, and Personalization categories.

While the majority of Asia's photography app users were women (81%), men were 1.9 times more likely to use photography apps than men in the rest of the world.

Women similarly dominated the Shopping & Lifestyle category in terms of use, but were also 1.4 times more likely to shop in mobile apps compared to women globally.

Finally, personalisation app users worldwide are heavily skewed towards men (81%) but this is not the case in Asia where usage is split more or less evenly (51% v 49%).

This means that women in Asia were 2.7 times likely than the global female average to use personalisation apps.


Data sourced from Flurry Analytics; additional content by Warc staff

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Labelling costs beer brands

29 June 2015
NEW YORK: Anheuser-Busch InBev has agreed to adjust the labelling on its Beck's beer brand following the settlement of a class-action lawsuit which will also see the world's largest brewer refunding drinkers who mistakenly thought they were consuming imported beer.

Originally brewed in Bremen, Germany, production for the US market moved to St Louis in 2012 but the packaging continued to highlight its German ancestry with phrases such as 'originated in Bremen' and 'German quality' which, it was alleged, gave consumers a false impression of where the beer had been made.

"We believe our labelling, packaging and marketing of Beck's have always been truthful, transparent and in compliance with all legal requirements," said Jorn Socquet, vp/marketing at Anheuser-Busch.

He added that a compromise had been reached, under which the Made in the USA label will be made more prominent on bottles and boxes.

It is not the first time the brewer has run into such problems, as a similar case last year, also heard in a Miami court, argued that it had misrepresented to consumers that Kirin Ichiban and Kirin Light beers were brewed in and imported from Japan when in fact they were produced in the USA but priced as a premium imported beer.

The Wall Street Journal highlighted the price differentials involved: true imported brands can cost 20% more than overseas brands now brewed in the US, and these in turn can command a 15% premium over domestic beers.

Other overseas brands, including Foster's (Australia), Red Stripe (Jamaica), also play on their heritage while being brewed in the US. Japanese brand Sapporo has taken a different tack, being brewed in Canada and so allowing cans and bottles sold in the US to be legitimately labelled as imported.

The distinction could be potentially expensive for Anheuser-Busch. It will have to pay around $3.5m in legal fees while Beck's drinkers who can produce valid receipts can claim a refund of up to $50; even those without receipts can claim up to $12.

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

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HUL opens up Kan Khajura Tesan

29 June 2015
MUMBAI: Hindustan Unilever (HUL) has indicated it will allow external advertisers to use Kan Khajura Tesan, the successful and award-winning channel it has developed to promote its brands across remoter parts of India.

"In the journey of taking Kan Khajura Tesan forward as an ever growing marketing platform we are now opening it up for brands beyond HUL's own," a company spokesman told the Economic Times.

"This will allow the platform to grow and help marketers reach out to media-dark consumers who were difficult to reach before."

The platform essentially operates as a radio station for mobile: in villages where traditional media are non-existent or unreliable, mobile owners can, via a missed call, access an entertainment channel which also carries ads for HUL brands such as Lux or Fair & Lovely.

Since its launch in October 2013, Kan Khajura Tesan has gained 35m subscribers across India, supplied 900m minutes of consumer engagement in media-dark regions and enabled ads for HUL products to be heard 45m times. Refinements to the station mean it can also now push personalised content as dictated by user preferences.

Kan Khajura Tesan was named the best marketing strategy in the world in this year's Warc 100 and at last week's Cannes festival it won a Bronze Lion in the Creative Effectiveness Awards.

At a Cannes panel session hosted by Warc, Anaheeta Goenka, executive director at Lowe Lintas + Partners which co-created the campaign, explained that as the target audience had to dial a number on their phones to access the channel, getting people to remember this number was the sole focus of the campaign's advertising.

"The challenge to us was to use popular culture to make the number unique and sticky," she said. "So we created a character – the 'Kan Khajura', an insect – with the number spelled out on its body. And the character went everywhere."

Kan Khajura Tesan is already the biggest radio station in Bihar and with non-HUL brands being permitted to use it the FMCG giant is emerging as a de facto media owner.

Details of which brands will be airing ads and the deals on offer are yet to be revealed. The spokesman only said that "the nature of the tie-ups will be on a case-to-case basis as per the requirement of the partnering brands".

Data sourced from Economic Times; additional content by Warc staff

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Memorability key for top-awarded cases

26 June 2015
CANNES: Campaigns that go on to win strategy and effectiveness awards tend to aim for memorability above all else, according to a panel session hosted by Warc at the Cannes Lions International Festival of Creativity.

The session celebrated campaigns ranked highly in the Warc 100, the annual ranking of the world's top campaigns based on their performance across 87 effectiveness and strategy awards. It discussed research on the Warc 100 that showed that the top-ranked campaigns tend to feature more media channels than the norm, use storytelling and link online and offline media effectively.

Anaheeta Goenka, executive director at Lowe Lintas + Partners, discussed Kan Khajura Tesan, which was ranked the number one campaign this year. This work, for the agency's Hindustan Unilever client, created a new entertainment channel via users' feature phones.

As the target audience, media-dark people in rural India, had to dial a number on their phones to access the channel, getting people to remember this number was the sole focus of the campaign's advertising. Lowe achieved this through a cartoon mascot, a catchy jingle and colourful creative.

"The challenge to us was to use popular culture to make the number unique and sticky," she added. "So we created a character – the 'Kan Khajura', an insect – with the number spelled out on its body. And the character went everywhere."

Goenka added: "Being culturally relevant really helped us. In our over-crowded content space, too many people aim to create an impact. But what's really effective is being memorable."

Also ranked high in the Warc 100 this year was Ship My Pants, created by FCB Chicago for Kmart, a US retailer.

While the target audience and media used were very different, the agency's head of planning John Kenny explained that memorability was also the key aim for the campaign.

Research on what Kmart shoppers liked to share on Facebook showed a love for bawdy humour – very different to fans of rivals such as Target and Wal-Mart. So FCB created a "gloriously stupid" strategy based on potty humour, Kenny told the audience.

"It was not about changing attitudes," he added. "It's to get them to go to Kmart. The challenge with store to home is that everyone had forgotten about it. So a huge part of the campaign was about making it memorable."

The full Warc 100 results for this year are available to all, as is a sample of our Warc 100 analysis discussed in Cannes.

Data sourced from Warc

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Brands play 'incredible role' in culture

26 June 2015
LONDON: As 135,000 people trek to a Somerset farm for the weekend, the UK's summer festival season has officially started and brands have an important role to play in making this a success.

The Glastonbury festival is now far removed from its alternative roots when 1,500 people paid £1 (plus free milk) to see T.Rex play. This year's festival-goers will have shelled out £225 for the opportunity to see hundreds of acts on a multitude of stages along with the chance to hear the Dalai Lama give a talk.

And the participation of brands such as The Guardian, EE and Orange helps make the creation of a temporary town in the English countryside possible.

Metallica headlined the main stage at Glastonbury last year and drummer Lars Ulrich was in Cannes this week to explain how the band has changed its attitude towards working with brands. Where once it was "no f***ing way", he said that "we're definitely open to it now", Billboard reported.

One example of the band's new win-win thinking came when it teamed up with Coke Zero to play a gig in Antarctica. Similarly, DJ David Guetta says that if collaborations are approached in the right manner then a synergy can be achieved that benefits both sides.

"I believe we've come to a stage where brands are the number one content and experience producers," he told The Drum. "So, when I work with a brand, it gives me a platform to offer my fans something unique: either a crazy piece of content or an unbelievable experience."

And while "brands can play an incredible role in culture", he cautioned against them expecting the artist to be a salesman: "both parties have to meet half-way – they have to imagine a story that puts the consumer at the very centre. That's the only way to make it authentic for both the brand and the talent at the same time."

A report last year from music agency Frukt – Brands & Bands: The Value Exchange – also emphasised the need for artists not to see brand tie-ups as simply a paycheck. Its survey pointed to brand partnerships becoming "an integral part of an artist's overall career trajectory".

Data sourced from The Drum, Billboard, Frukat; additional content by Warc staff

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Cautious eye cast on neuromarketing

26 June 2015
NEW YORK: Even as the practice of neuroscience in marketing brings more tools to brand stewards worldwide, the certainty that such services will provide reliable value is still in doubt, according to a report in the latest issue of the Journal of Advertising Research (JAR).

Duane Varan and Steven Bellman (Murdoch University/Audience Labs), Annie Lang (Indiana University/The Media School), Patrick Barwise (London Business School) and René Weber (University of California, Santa Barbara) discussed this idea in a Viewpoint piece in JAR.

"New neuromarketing methods that potentially can predict advertising effectiveness face a daunting process," the authors write.

"Vendors in this evolving industry offer a confusing range of often proprietary differences in methodology."

And, in case anyone is uncertain about their findings, the authors' language gets stronger and more specific.

"There is no common truth, no single scientific reality exposed as a result of these new methods," they assert.

"Waves of interest in 'pure' measures of advertising response have come and gone in the past, many times for the same reason: though grand claims were made, they could not be replicated by other researchers.

"To prevent this happening with this new wave of neuro measures, vendors will have to show that they have sufficient confidence in their measures that they are willing to let others test them independently.

"Neuro vendors should compete like opinion-poll vendors: on the quality of their data, not the uniqueness of their measures."

The article – "How Reliable Are Neuromarketers' Measures of Advertising Effectiveness? Data from Ongoing Research Holds No Common Truth among Vendors" – appears as part of the four-part "How Does Neuroscience work in Advertising?" section of JAR.

This also includes considerations on psychophysiological approaches for measuring consumer response to messaging, the way visual processing can affect sponsorship programs and the use of eye tracking in determining audience attention to competing editorial and advertising content.

Data sourced from Journal of Advertising Research; additional content by Warc staff

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Retailers fail to prepare in China

26 June 2015
SHANGHAI: Many foreign brands have attributed a decline in their sales in China to the government crackdown on corruption when in reality they have simply failed to understand how the market operates, according to an industry expert.

In a new report, "No one said that it would be easy: How to crack the China Retail Market", CR Retail, a Shanghai-based retail consultancy, analysed the strategies adopted by international brands entering the Chinese market.

"A number of retailers continually blame the anti-graft measures for the slowdown however it is CR Retail's view that these are only partly responsible," said managing director James Rogers.

"We see the issues starting a lot earlier with the retailers failing to grasp the complexities and challenges involved with opening there," he told Inside Retail Asia.

Part of the problem is a failure to see beyond the huge numbers that seem to promise success – a total population of 1.4bn and 160 cities with a population of over 1m – and to carry out due diligence.

Many new entrants believed, said Rogers, that "a retailer can just open a store similar to what they operate in other markets and the consumers will come flooding in – often this couldn't be further from the truth".

He highlighted 15 questions that retailers should be asking themselves, including the basic one of establishing if the brand would actually travel, as well as identifying a target audience and asking whether it was ready.

"When speaking with retailers it is astounding how many new entrants have not thought of some of these issues," said Rogers.

He advised that brands shouldn't think that Chinese consumers would simply adapt their own styles and tastes for the brand. "The brands that have been and will continue to be successful are the brands that understand the consumer and adapt for them," he told Red Luxury.

In addition to opening stores in the right locations, that means picking a way through a complicated ecommerce environment and fully appreciating the role digital plays in China.

Patience and a long-term strategy are essential, Rogers added. "While becoming spoilt for choice, the consumer is still learning. Rome wasn't built in a day and nor will a retailer's China business."

Data sourced from Inside Retail Asia, Red Luxury; additional content by Warc staff

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Millennials now biggest US age group

26 June 2015
WASHINGTON: Millennials are now the single biggest age group in the US and are far more diverse than any other generation according to new data from the US Census Bureau.

It estimated that, as of 1 July 2014, the number of Americans born between 1982 and 2000 stood at 83.1m – more than a quarter of the total population – and 44.2% of these came from a minority race or ethnic group.

The shifts under way were further emphasised in the finding that the under-five age group was now "majority-minority", as 50.2% were part of a minority race or ethnic group.

That same "majority-minority" tag could also be applied to five states: Hawaii (77.0%), the District of Columbia (64.2%), California (61.5%), New Mexico (61.1%) and Texas (56.5%).

Overall the major groups within this classification are growing. The Hispanic population was the largest, totalling 55.4m in July 2014, up 2.1% on a year earlier.

The African-American population was 45.7m, a 1.3% increase, and Asian-Americans numbered 20.3m, a 3.2% increase.

The numbers of the smaller groups have also swelled: the American Indian and Alaska Native population was up 1.4% to 6.5m while that of Native Hawaiians and Other Pacific Islanders rose 2.3% to 1.5m.

The slowest-growing group was the nation's non-Hispanic, white population which edged up 0.5% to 197.9m.

Unsurprisingly, the least diverse age group is the oldest. There are now some 46.2m over-65s – a group that also includes the oldest four years of the Baby Boomer generation – of whom only 21.7% are from a minority.

The oldest states were Florida and Maine, the youngest Alaska and Utah. And in contrast to most states, five experienced a decline in median age between 1 July 2013 and 1 July 2014: North Dakota, Hawaii, Montana, Wyoming and Iowa.

Data sourced from PR Newswire; additional content by Warc staff

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Blog: Don't worry about the rough edges

26 June 2015
Brands don't need to be perfect, says ZenithOptimedia's Richard Shotton. The 'pratfall effect' shows that admitting some flaws can make them more attractive to consumers.


Warc

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Maggi takes $200m hit to brand value

26 June 2015
NEW DELHI: As Nestlé India battles to contain the fallout of a major food scare, a consultancy firm has estimated that Maggi, the brand at the centre of it, will lose some $200m in brand value.

Following the government's decision to ban Maggi noodles after it found high lead levels in samples, Brand Finance, which specialises in valuing brands and intangible assets, knocked that figure off its previous valuation of £2.4bn, the Financial Express reported.

That sum ranked Maggi as the 23rd most valuable food brand in the world. Last year, Maggi was also ranked the second most-trusted food brand in India, behind Coca-Cola's Maaza fruit drink, by market researcher Nielsen.

Nestlé chief executive Paul Bulcke said the company's reputation had taken a bashing "because it's a big brand and that (ban) made a lot of waves" as he continued to insist the brand is safe.

Nestlé India is contesting the ban even as it is in the process of destroying 27,000 tonnes of the product. "One can have facts on one's side but it's the perception that counts," said Bulcke. "We have to work on that. We have to reconnect with consumers."

Nestlé's troubles have not been restricted to Maggi noodles, as earlier this month there were also reports that live larvae had been found in infant milk powder.

Live Mint highlighted the difficulties international brands face in India, with fragmented supply and retail chains where one slip-up can adversely affect global reputation.

McDonald's, for example, applies elaborate hygiene standards to workers at its plants and carries out more than 100 checks on its products but can still be put at risk from the practices of the many small, often illiterate, farmers it uses as suppliers.

"There are thousands of farmers you need to reach out to, each with maybe an acre, two acres of land," according to Vikram Ogale, in charge of supply chain and quality assurance for McDonald's India.

"Think of a situation where you have 1,000 farmers and...you have to educate them, convince them," he said.

McDonald's says it can trace all its ingredients, not a claim that many can make as suppliers frequently sub-contract orders.

Live Mint also reported that one in five food samples tested by the government is found to be contaminated, adulterated or mislabelled.

Data sourced from Financial Express, Live Mint; additional content by Warc staff

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