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17% of adults plan to use a buy now pay later service
31 March 2022
17% of adults plan to use a buy now pay later service
Credit cards & loans Digital payments Financial services (general)

Globally, 15% of adults say they have made a purchase using a buy now pay later (BNPL) service in the past three months and 17% say it is likely they will use one in the next year, according to data from YouGov.

Why it matters

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Featured
Global TV media costs surge almost a third post-pandemic
03 August 2022
Global TV media costs surge almost a third post-pandemic
Media & communications budgets Advertising expenditure & forecasts
Global TV media costs surge almost a third post-pandemic
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03 August 2022
Global TV media costs surge almost a third post-pandemic
Media & communications budgets Advertising expenditure & forecasts

Media inflation is driving up the cost of advertising across channels, with TV most affected, according to an analysis by WARC Media. 

TV costs are rising fast

The latest Global Ad Trends* report, The rising cost of incremental reach, finds that, globally, TV CPMs (cost per thousand) have increased 31.2% since 2019 – the steepest incline in more than two decades – and are up 9.9% year-on-year in 2022. 

The trend is especially pronounced in the US, where TV CPMs are forecast to reach $73.14 in 2022, an increase of 40.0% on pre-COVID costs. 

For some categories the impact is heightened. According to WARC Media data, advertisers in the food category spent on average 79.8% of their budgets on TV in 2019, and in the automotive category, 67.7%. If they were to have maintained that same level of investment, by 2021 the volume of impressions would have decreased by 18 percentage points. 

Digital media costs are increasing too 

This twin trend of declining linear television viewership and rising TV media costs is encouraging advertisers to look elsewhere for incremental reach, but price pressure is being felt across the online media landscape. 

Paid social CPMs increased by 33% between 2019 and 2021 (source: Skai) and the growing popularity of retail media formats is pushing up the cost of advertising on platforms like Amazon. 

Channels such as broadcaster video on-demand (BVOD) provide an alternative source of incremental reach. However, over-the-top (OTT or streamed video) ad costs are rising too: inflation in advanced TV formats in the US is forecast to reach 9.9% in 2022, as per World Federation of Advertisers (WFA) figures.

Relative bargains can still be found in channels like radio

The pursuit of incremental reach has generally focused on digital audio-visual channels, as they offer a more straightforward transition from television. In comparison, offline channels are often under-utilised, despite not having witnessed the same levels of price inflation since 2019.

In Australia, the cost of radio media in 2022 remains 1.1% below pre-pandemic levels, while prices in the US are largely unchanged three years on. 

A similar picture emerges in out-of-home (OOH), incorporating both static and digital panels: in the UK, outdoor ad prices are 3.1% lower than before COVID-19, while, in the US, OOH remains 5.8% cheaper than it was in 2019.

Key quote

“As the global economy teeters on the brink of an inflationary recession, media costs may experience further volatility. Nonetheless, non-video channels are worth consideration if they are right for the audience” – Alex Brownsell, Head of Content, WARC Media.

*Global Ad Trends is a bi-monthly report which draws on WARC’s dataset of advertising and media intelligence to take a holistic view on current industry developments. A complimentary sample report of WARC Global Ad Trends: The rising cost of incremental reach is available here.

Sourced from WARC Media

From FUD to loyalty 3.0:  what NFTs mean for marketing
11 August 2022
From FUD to loyalty 3.0: what NFTs mean for marketing
Customer loyalty schemes NFTs
From FUD to loyalty 3.0:  what NFTs mean for marketing
11 August 2022
From FUD to loyalty 3.0: what NFTs mean for marketing
Customer loyalty schemes NFTs

There will always be FUD – fear, uncertainty and doubt – in the NFT space, says Adrian Ts’o, head of stratgy at DDB Group Hong Kong, but brands have a unique opportunity to use NFTs to create greater value, engagement and loyalty.

Why it matters

Beyond the hype, NFTs provide multiple use cases – from membership to networking, SaaS and much more – that when used strategically can help marketers innovate what customer loyalty means.

Takeaways

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The regionalisation of Indian brands
11 August 2022
The regionalisation of Indian brands
Dairy products, fats, oils Localisation of international work India
The regionalisation of Indian brands
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11 August 2022
The regionalisation of Indian brands
Dairy products, fats, oils Localisation of international work India

“The brand and company will be relevant if your products and brands are contemporary and serve the consumers,” according to RS Sodhi, managing director, GCMMF (Amul) – and for the dairy giant that means getting increasingly local.

Context 

Thirty or forty years ago there was far less trust for Indian food brands, with imported brands carrying a perception of both quality and hygiene. Those attitudes are long gone, with Indian brands more than holding their own against the multinational giants. What’s happening now, though, is that consumers are increasingly looking even more locally for brands – and that puts new demands on marketing strategies as both national and international brands look to create the impression of being a regional brand.

What’s happening 

That’s an interesting development for a brand like Amul that has spent years promoting itself nationally and now finds itself moving to a more regional approach.

That has meant explaining how, for example, the milk it sells in a particular state is purchased from local villages and farmers.

“We are going more regional in our messaging,” RS Sodhi told Campaign Asia. “Whether it’s press, social media or TV, we are looking at creating brand opportunities via local languages.”

This could be a particularly effective play for Amul since it doesn’t have any pan-India rivals. “Our competition is from regional players, whether you take milk, butter, ghee, or even our ice creams,” Sodhi said. 

Sourced from Campaign Asia 

How Lexus pivoted from boomers to zoomers
10 August 2022
How Lexus pivoted from boomers to zoomers
Brand positioning Luxury brands Influencers, KOLs
How Lexus pivoted from boomers to zoomers
10 August 2022
How Lexus pivoted from boomers to zoomers
Brand positioning Luxury brands Influencers, KOLs

Legacy car brand Lexus targeted Gen Z with its “Emotional Sparks” campaign, tapping into the generation’s particular zeitgeist by featuring up-and-coming artists and celebrating creative spontaneity.

Why it matters

Long-established brands may have credibility on their side, but coolness is a loftier aspiration. Lexus was able to achieve new relevance with a younger generation with an ad campaign that focused on their unique identifiers, including innovation, connection, and diversity.

Takeaways

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Sustainability: Prepare for new Green Guidelines
10 August 2022
Sustainability: Prepare for new Green Guidelines
Net zero Sustainability
Sustainability: Prepare for new Green Guidelines
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10 August 2022
Sustainability: Prepare for new Green Guidelines
Net zero Sustainability

The Federal Trade Commission’s new guide to environmental marketing claims is due out this year and will be critical to brands pushing their sustainable credentials without greenwashing – but examples from around the world offer useful hints of how to prepare.

Why it matters

Last revised in 2012, the Wall Street Journal reports, the current guidance is vague in some areas that are now key, while also omitting terms that are now well-used but also quite easily abused – like ‘net zero.’ Consumers are sceptical of many such claims, and stricter regulations can help build trust across the board.

What to know

  • Expect updated guidance on broad terms like ‘sustainable’.
  • Expect a greater emphasis on life-cycle assessments of environmental claims. This takes in the impact of raw materials, the recyclability of products, and the use of carbon offsetting, which is not nearly as environmentally effective as reducing carbon impact within the supply chain.
  • US marketers would do well to look at existing guidelines in markets that have already regulated such claims such as in Europe. In many cases, independent auditing and certification have been a useful tool for some brands.

In context

It follows efforts from other regulators, like the UK’s advertising and competition watchdogs whose strengthened rules have raised the burden of proof on green claims. The FTC has also acted against some major firms, but usually for misleading claims rather than thinly evidenced claims. This could yet change.

These new guidelines will determine what brands will be able to say in their marketing communications and what could draw scrutiny. At their best, these regulations could help truly green brands stand out from those who merely talk about it.

Sourced from the WSJ, WARC

Domino’s pizza innovations fail to wow Italians
10 August 2022
Domino’s pizza innovations fail to wow Italians
Restaurants & takeaways Italy
Domino’s pizza innovations fail to wow Italians
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10 August 2022
Domino’s pizza innovations fail to wow Italians
Restaurants & takeaways Italy

Domino’s, the pizza chain, has more than 19,000 stores across 90 markets around the world, but Italy is no longer one of them. 

Why it matters

The pizza is a simple dish where execution is arguably more important than content; the sort of crossover cuisine that has seen Domino’s add cheeseburgers and BBQ chicken to the dish is clearly anathema to many Italians. There may also be an element of hubris in thinking a brand that, 12 years ago, was apologising to its own customers for the quality of the product, was well placed to compete in the home of the pizza.

Takeaways 

  • Earlier this year the franchise “sought protection from creditors”; Bloomberg reports that, after seven years of operation, all 29 Italian branches of Domino’s have now closed.
  • Apart from the menu, the pandemic was a major factor as Domino’s delivery model was hard hit by independent pizza restaurants quickly gravitating to food delivery platforms. 
  • A recent study by the Associazione Verace Pizza Napoletana, cited by the New York Times, found that Neapolitan pizza evokes concepts of “quality, well being and family” – notions that large pizza chains “with their standardized products” struggle to match – and that consumers prefer “artisanal products”.

The big question 

Why would you put pineapple on a pizza? 

Sourced from New York Times, Bloomberg, WARC

Brands vs retailers: Overcoming pricing tension
10 August 2022
Brands vs retailers: Overcoming pricing tension
Money & finance Supermarkets & grocery stores Brand management
Brands vs retailers: Overcoming pricing tension
10 August 2022
Brands vs retailers: Overcoming pricing tension
Money & finance Supermarkets & grocery stores Brand management

With price standoffs in play, and retail analysts expecting more as annual supply contracts are renegotiated, it will be better for brands and retailers to work with each other, rather than against each other as the economic climate continues to worsen, writes Katy Dunn, Strategy Partner - Retail Experience at RAPP UK.

Why it matters

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Gifting surge expected during India’s festive season
10 August 2022
Gifting surge expected during India’s festive season
Purchase behaviour Christmas & festivals India
Gifting surge expected during India’s festive season
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10 August 2022
Gifting surge expected during India’s festive season
Purchase behaviour Christmas & festivals India

The upcoming festive season in India is expected to see significantly increased spending on discretionary items, consumer electronics and gifts as people return to stores following two years of COVID-related restrictions.

Context 

Brands and retailers are anticipating growth of up to 25% on the same period in pre-COVID 2019: consumer sentiment is positive, in both rural and urban areas, and there’s a lot of pent-up demand.

Additionally, “Large family gatherings are expected during the festivals after a gap, and this will be the first wedding season without COVID protocols in two years”, notes the director of a large mall operator in Delhi-NCR. “We expect to see these occasions boost gifting and discretionary consumer spending,” he tells the Economic Times.

Takeaways 

  • The festive season starts with Raksha Bandhan next week, followed by Janmashtami and Ganesh Chaturthi, and goes on to Dussehra, Durga Puja, Diwali and Christmas. The wedding season starts in November.
  • “We are already at 30% higher growth rates compared to last year,” says Manish Saini, chief operating officer at gifting company Ferns N Petals. “We expect growth to settle at 60% over last year as orders per day are in the range of 18,000-20,000 for Raksha Bandhan.”
  • Consumers could pick up smartphone bargains as brands look to clear current high levels of unsold inventory. 

Sourced from Economic Times

South-East Asia’s rising inflation: How FMCG brands should react
10 August 2022
South-East Asia’s rising inflation: How FMCG brands should react
Money & finance Low-income consumers Marketing in a recession
South-East Asia’s rising inflation: How FMCG brands should react
10 August 2022
South-East Asia’s rising inflation: How FMCG brands should react
Money & finance Low-income consumers Marketing in a recession

Inflation presents huge challenges for brands, which need to be aware that shoppers, categories and markets are responding differently to the pressure of rising prices, say Kantar Worldpanel Asia’s Nelson Woo and Kacey Lim.

Why it matters

To boost performance in an inflation-driven market, brands can consider five options: increase the list price, change product mix, reduce price promotion, innovate, reduce pack size.

Takeaways

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Inflation poses challenge to plant-based meat growth
09 August 2022
Inflation poses challenge to plant-based meat growth
Incubators, start-ups, entrepreneurship Convenience, readymade Pricing strategy
Inflation poses challenge to plant-based meat growth
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09 August 2022
Inflation poses challenge to plant-based meat growth
Incubators, start-ups, entrepreneurship Convenience, readymade Pricing strategy

Beyond Meat, a leader in the plant-based meat sector, believes that achieving lower pricepoints will be vital to ensuring the industry’s long-term growth, as well as helping in times of inflation.

Why it matters

Beyond Meat secured its second-largest ever quarterly net revenues in the last three-month trading period. A surge in the cost of living, however, is expected to take a toll on the industry by slowing down growth as consumers switch to lower-cost sources of protein to save money.

The background

  • Plant-based food is an emerging category, with a growing number of brands from the packaged food to quick-service restaurant industries entering this space.
  • Ethan Brown, CEO of Beyond Meat, said on an earnings call that the COVID-19 pandemic, followed by “highest inflation in 40 years”, made for a tough environment.
  • “For a sector that’s still gathering its feet and is still in sort of the first set of downs, that’s a very difficult set of conditions to navigate,” he said.

The fundamentals still matter

  • These challenges, Brown noted, are “in a kind of unfortunate way … reinforcing our strategy” for building Beyond Meat’s business.
  • One unchanging part of its approach is “about getting the taste right so that we are indistinguishable from animal protein,” he said.
  • A second objective is “making sure consumers understand that our products have health benefits relative to animal protein”, which is another long-term endeavor.

The pricing problem

  • The third component of Beyond Meat’s strategy, and the one that is “most relevant” at a time of inflation, involves pricing.
  • “We’ve always known that we need to drive our cost structure down and offer the consumer a pricepoint that is the same as animal protein,” said Brown.
  • Many consumers are currently opting to buy affordable meat options like SPAM, he continued. On a 12-week average, ground beef was also priced at $4.90 per pound, versus $8.35 per pound for Beyond Meat.
  • “You see consumers trading down to lower cuts of meat, so we have to get through this period to see a resumption of growth,” Brown said.

The cost-reduction imperative

  • In pursuit of bringing prices down, Beyond Meat is using its production expertise to understand how to “strip cost, from a design perspective, out of our products,” he noted.
  • Reducing operational expenditure will also be important, such as by introducing “bracket pricing” that encourages business customers to order in quantities that are most efficient from a logistical perspective.
  • Another strategic consideration is finding ways to bring a “portfolio strategy into the market so that we can get more broadly and more quickly to a profitable lower pricepoint.”

Sourced from SeekingAlpha

TikTok owner steps forcefully into healthcare
09 August 2022
TikTok owner steps forcefully into healthcare
Brand extensions Healthcare services, providers Greater China
TikTok owner steps forcefully into healthcare
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09 August 2022
TikTok owner steps forcefully into healthcare
Brand extensions Healthcare services, providers Greater China

ByteDance, the Chinese social media giant behind the short video platform TikTok, has made a significant $1.5bn acquisition of hospital company Amcare – another step in big tech’s global efforts to enter and disrupt healthcare.

Why it matters

ByteDance’s acquisition of the chain, which specialises in obstetrics, gynaecology, and paediatric medicine, will strengthen an existing health app business, Xiaohe, in what is becoming a seriously competitive landscape alongside apps from Alibaba and Baidu. But the firm has found a critical niche.

The global digitalisation of health

Online healthcare in China is growing fast, the number of private hospitals is growing ahead of public hospitals. As the South China Morning Post, notes, Amcare’s target market is usually high-income patients including expats.

In part, it reflects the pandemic-induced behaviour shift toward online consultations, which animated the platform’s debut in 2020, as a way to communicate with doctors at major hospitals for consultation and to search for medical information and explainers.

These ideas also formed some of the rationale behind Amazon’s recent acquisition of One Medical last month, which saw the e-commerce firm bring a large employer-healthcare provider on board.

Ideas to think about

Profitability: unlike social media whose marginal costs don’t increase that much with scale, healthcare is really expensive to provide. You need buildings, you need doctors and nurses, and you need to comply with a huge amount of regulation. To what extent will ByteDance’s innovation be able to find margins here?

Deeper currents: the more cynical side of this deal is perhaps the focus on maternal health, paediatrics, and the rich – these might help to answer that question. General healthcare is one thing – China provides most citizens with basic medical coverage – but maternity and pediatrics is another thing. Amcare is licensed to provide IVF treatment.

With greater educational and employment opportunities, the age of those who have children tends to increase, but so does the likelihood of complications. Later – the dealmakers will be aware – there are some sacrifices that people will make for their own health, but nothing makes parents move heaven and earth like the health of their child. 

 Sourced from Bloomberg, SCMP, WARC, KR-Asia. Image: ByteDance

Greater automation is coming to digital marketing
09 August 2022
Greater automation is coming to digital marketing
Artificial Intelligence (AI) Big data theories & ideas Data analysis
Greater automation is coming to digital marketing
09 August 2022
Greater automation is coming to digital marketing
Artificial Intelligence (AI) Big data theories & ideas Data analysis

Google’s Performance Max (PMAX) solution hints at a more automated, machine learning-driven future for digital advertising, according to a new WARC Exclusive.

What’s PMAX?

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DOOH ads are informative and leave a strong impression 
09 August 2022
DOOH ads are informative and leave a strong impression 
Outdoor & out of home effectiveness Digital outdoor & OOH United Kingdom
DOOH ads are informative and leave a strong impression 
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09 August 2022
DOOH ads are informative and leave a strong impression 
Outdoor & out of home effectiveness Digital outdoor & OOH United Kingdom

DOOH campaigns are regarded by consumers across the UK as primarily informative (by 80%) and, to a lesser extent, entertaining (31%) and creative (24%), according to new research.

Those attributes also mean that the channel is more likely to leave a strong impression on consumers (10%) than ads in other popular verticals such as digital streaming music services or podcasts (6%) or online videos (5%). 

Why it matters

The research (part of a global study conducted by Kantar on behalf of Xaxis and Kinetic for Sightline, a DOOH solution owned by media investment company GroupM) suggests that consumers are more receptive to interactive features when they are out and about, moving and exercising, rather than when they are alone with their personal electronic devices. Combining DOOH with other omnichannel approaches can be effective in increasing brand recall and calls to action from consumers.

Takeaways

  • Brits find DOOH ads a (relatively) trustworthy medium – 13% more so than social media.
  • DOOH is an action driver for Gen Z and Millennials in the UK: 16-34 year olds are the most likely to talk about DOOH ads if they have seen them and are twice as likely to do so than those who are over 55.
  • Younger people are also more likely to facilitate outcomes such as sharing what they have seen online, through things like QR codes and social media hashtags.

Key quote

“By interacting with features like QR codes, social media hashtags and touch screens, while on the move in relevant locations, consumers are being encouraged to make action-driven decisions including searching online for more information and ultimately to visit stores and make purchases” – Tilly Sheppard, Product Manager Xaxis.

Sourced from Sightline

Gambling ads under data targeting scrutiny
08 August 2022
Gambling ads under data targeting scrutiny
Advertising regulation Data protection & privacy Lotteries, casinos, gambling
Gambling ads under data targeting scrutiny
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08 August 2022
Gambling ads under data targeting scrutiny
Advertising regulation Data protection & privacy Lotteries, casinos, gambling

Online gambling is to come under the spotlight from the UK’s Information Commissioner – the data protection watchdog – into the targeting techniques deployed by the industry amid concern that problem gamblers are being exploited.

Why it matters

Gambling is addictive, and online gambling has made it easier than ever to access. As an industry, it is a heavy advertiser whose presence across football has long drawn criticism, even if the evidence that sponsorship leads to problem gambling is limited. As much for the sport as for the exchequer, the gambling industry makes a lot of money.

But a House of Lords report found that 60% of its profits come from just 5% of its users, a proportion that hints at the overspending of some individuals. UK gambling laws are currently under review – though the government’s proposals have been shelved repeatedly amid political turmoil.

More broadly, it could be an important moment for online advertising at large, as the investigation explores what kind of personal data is appropriate for advertising, especially in categories with potentially significant impacts on public health. It also highlights the major disparities in the regulation of online advertising relative to TV, where the industry has agreed to voluntary curbs.

The story

The investigation, reported by the FT, is set to look at the tracking activity of Sky Bet, which is majority owned by Flutter Entertainment – which also owns major brands like Paddy Power and Betfair.

It’s the result of a critical report commissioned by Clean Up Gambling, a pressure group that also made the complaint, which alleges building of detailed profiles that are then used to win back profitable customers by using it alongside and with third parties. It argues that many users didn’t know they were being profiled.

The company argues that it doesn’t see users’ financial data beyond its own platform and intends to target social media ads away from problem users.

Yet it follows a £1.17m fine issued in March by the industry’s regulator, the Gambling Commission, against Flutter for emailing promotions to people who had opted out of communications.

Sourced from the FT, The Guardian, House of Lords

To counteract car dealership fatigue, serve experience
08 August 2022
To counteract car dealership fatigue, serve experience
Automotive industry (general) Eco, hybrid, electric cars Customer experience
To counteract car dealership fatigue, serve experience
08 August 2022
To counteract car dealership fatigue, serve experience
Automotive industry (general) Eco, hybrid, electric cars Customer experience

Ford CEO Jim Farley is one of several auto representatives advocating for a fresh approach to car-selling – one that prioritizes novelty and innovation over “butts-in-seats.”

Why it matters

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Exit the metaverse, enter metaNesia 
08 August 2022
Exit the metaverse, enter metaNesia 
Marketing to B2B audiences Metaverse Indonesia
Exit the metaverse, enter metaNesia 
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08 August 2022
Exit the metaverse, enter metaNesia 
Marketing to B2B audiences Metaverse Indonesia

In the current economic climate the tech sector’s appetite for virtual worlds appears to be declining, but Indonesia’s government sees them as an opportunity to wrest back control of the online world from the likes of Google and Facebook.

What’s happening

Metaverse hype has been everywhere since Facebook became Meta nine months ago. But now figures from workplace researcher Revelio Labs, reported by Bloomberg, show new monthly job postings across all industries with “metaverse” in the title declining 81% between April and June.

That coincides with the tech sector’s first stumble in its previously unstoppable forward march: Meta, Twitter and Snap all recently flagged falling ad revenues while Alphabet is growing at its slowest rate in several years.

Even as Big Tech seems to be reassessing the potential of the metaverse, the Indonesian government has just heralded PT Telkom Indonesia’s launch of “metaNesia” – a virtual world that aims to act as a platform for Indonesia’s micro-, small, and mid-sized enterprises to showcase their goods on an equal footing with larger foreign businesses.

Why it matters

One person’s problem is another’s opportunity – and Big Tech certainly has plenty of problems at the moment, from regulatory issues to political ones. The Financial Times highlights new EU rules driving towards interoperability of messaging services and, in the US, moves by the FTC to prevent tech giants simply buying up emerging potential competitors; at the same time, geopolitical divisions are leading away from the global internet towards a fragmented one

Those developments pose a potential threat to the network effect that has powered the tech giants to their current pre-eminence. Anything that loosens their grip on the ad dollars they have hoovered up along the way may occupy more of their time and effort than building new worlds (about which many people remain cynical in any case). It also creates a window for smaller, alternative players, such as metaNesia, to build a base. 

As Indonesia’s State-Owned Enterprises Minister said: “Don’t let other countries create a new world with their own payment system, while the market remains in Indonesia. Then we will regret it.”

Sourced from Bloomberg, Financial Times, WARC 

Beyond cost cutting: finding growth in an economic downturn
08 August 2022
Beyond cost cutting: finding growth in an economic downturn
Brand growth Brand management Marketing in a recession
Beyond cost cutting: finding growth in an economic downturn
08 August 2022
Beyond cost cutting: finding growth in an economic downturn
Brand growth Brand management Marketing in a recession

During an economic slowdown, jumping to cost cutting can damage long-term brand health, but with prudent and thoughtful portfolio management, brands can still find ways to grow.

Focus on three areas

According to Anna Soisalo, Executive Director, Strategy & Product – Europe at agency ustwo, most prudent decisions brand owners can use to drive growth during an economic slowdown fall into three areas: 

  1. revising horizons; 
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How APAC can navigate inflation and recession to build brand resilience
08 August 2022
How APAC can navigate inflation and recession to build brand resilience
Marketing in a recession Pricing strategy Marketing budgets
How APAC can navigate inflation and recession to build brand resilience
08 August 2022
How APAC can navigate inflation and recession to build brand resilience
Marketing in a recession Pricing strategy Marketing budgets

There are both short- and long-term measures that marketers can take to ensure their brands remain successful in the face of inflationary and recessionary challenges.

Why it matters

Amid tough conditions, marketers have an opportunity to build more resilient brands that deliver greater value for consumers and businesses with a short-term focus that creates a strategy to navigate an inflationary world, and a long-term view of creating excess share of voice and hence market share growth.

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Consumer mind share is Alibaba’s most valuable asset 
07 August 2022
Consumer mind share is Alibaba’s most valuable asset 
Online retail Brand management Greater China
Consumer mind share is Alibaba’s most valuable asset 
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07 August 2022
Consumer mind share is Alibaba’s most valuable asset 
Online retail Brand management Greater China

With one billion annual active consumers in China, consumer mind share is Alibaba’s most valuable asset, according to CEO Daniel Zhang.

“We don’t need to be paying money to induce the consumers to come back,” he said during an earnings call. “We have that mind share of the consumers, and that’s what’s capable of driving a lot of organic traffic; we get consumers coming back even when their willingness to consume may have weakened during the pandemic period.”

Why it matters

That user base, along with a portfolio of different apps, “positions us to further improve that mind share and capture the opportunities”, Zhang believes. It also plays into reduced marketing spending, as CFO Toby Xu reported the “sales and marketing expenses ratio decreased to 12% in June quarter [from 13% a year earlier], reflecting our efforts in optimizing user acquisition and retention spending across businesses”.

Takeaways

  • Alibaba’s three core strategies embrace consumption, cloud and globalization. On the first of these, “we will focus on growing our wallet share in different consumer segments instead of pursuing further absolute increase in our user base in China”, Zhang said.
  • Premium users are growing in number as consumers with the highest spending power show “strong loyalty to our platforms”, he added.
  • Alibaba is focusing less on the nationwide market and more on particular cities and regions to achieve local economies of scale. “The digitalized network integrating intercity commerce and fulfillment has become a new infrastructure in modern urban life”, Zhang noted.
  • On the Taobao app, more than half of products are now being displayed to consumers via short-form video, rather than images and text. 

Key quote

“The most valuable asset that Alibaba owns today, that we built up over the years, is mind share. Users come to Alibaba with a consumption mindset” – Daniel Zhang, CEO, Alibaba.

Sourced from Motley Fool

NBCUniversal: 30–40% ‘optimal’ OTT weighting for TV campaigns
05 August 2022
NBCUniversal: 30–40% ‘optimal’ OTT weighting for TV campaigns
Media & communications budgets Online video effectiveness Online video planning & buying
NBCUniversal: 30–40% ‘optimal’ OTT weighting for TV campaigns
05 August 2022
NBCUniversal: 30–40% ‘optimal’ OTT weighting for TV campaigns
Media & communications budgets Online video effectiveness Online video planning & buying

NBCUniversal is advising marketers to refocus TV ad budgets towards streaming formats, after a study found the best-performing advertisers sourced around a third of total impressions from OTT.

Measurement on the move

NBCUniversal has been one of the most vocal critics of Nielsen, which last year was stripped of its accreditation for local and national TV measurement by the Media Rating Council.

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