WARC Talks: 3 in 15 – Working with creators

In this episode of the WARC podcast, Lena Roland, Head of Content for WARC Strategy talks to Catherine Driscoll, Commissioning Editor for EMEA, about the latest WARC Guide to working with creators.

As the digital media landscape continues to evolve apace, new dynamics are emerging between brands and the creators they partner with online. Creators are challenging established brands by entering the packaged goods space; think MrBeast Burger, or PRIME. 

This episode also addresses best practices for brands partnering with creators and how to measure the impact of influencer campaigns.

Listen to the full episode here

Timestamps

01:19 – Evolving brand-creator relationships.

04:58 – Creators and physical products.

07:53 – Best practices for working with creators.

11:15 – Measuring the impact of influencer campaigns.

14:22 – Diversity and equity in influencer marketing.

See the full list of WARC podcasts here

WARC Media Platform Insights: YouTube

YouTube continues to command a strong position in the online video advertising market and is actively looking for ways to forge deeper connections with viewers, creators and brands through multi-format video strategies.

Context 

YouTube is prioritising Shorts and CTV engagement, and is innovating with unskippable 30-second ads and “pause experiences” on TV to help marketers engage audiences across screens and achieve both performance and brand-building goals.

Takeaways 

• Ad investment with YouTube is set to rise 4.0% in 2023 to reach $30.4bn

That marks a turnaround from Q4 2022 when ad revenue declined 8.8% year-on-year, as marketers shifted investment to retail media and search. But growth is expected to resume in 2023, at more than double the rate of growth recorded in 2022. WARC Media forecasts YouTube’s revenue growth to accelerate 10.3% in 2024, to reach $33.5bn by the end of that year.

• Commerce brands are expected to spend $4.1bn on YouTube ads in 2023 

This is a 4.6% rise on 2022. Retail remains YouTube’s most important category for ad investment, but growth from other sectors has been harder to achieve. While some categories will see double digit spending increases in 2023, including technology and electronics (+13.9%) and toiletries and cosmetics (+12.1%), figures elsewhere are more modest.

• YouTube advertisers can reach half of all internet users globally. More than one billion hours of video are watched every day on YouTube

YouTube is the world’s most popular online platform, with an adult advertising reach estimated at 2.07 billion people, almost twice as much as TikTok and Instagram respectively. YouTube Shorts (60 seconds or less) will provide more opportunities for marketers to reach new audiences, but its 50 billion daily viewer total is some way behind the 140 billion daily views achieved by Instagram Reels; under-18s, meanwhile, spend on average 60% longer on TikTok than with YouTube content.

• YouTube has overtaken Netflix as the biggest TV streaming platform in the US

YouTube accounted for 22.9% of OTT viewing in March 2023. It is also the most popular channel for US Gen Zs to catch up with sports news, and last year it was the most popular platform for both music and podcast listening in the US.

APAC is a key growth region for YouTube – from live shopping and Shorts to gaming – while in Latin America, YouTube delivers brand impact more cost-effectively than any other video platform, according to research by Kantar.

Platform Insights is a new series of reports exclusive to WARC Media subscribers. These include an overview of platform investments, media consumption and performance insights. More information is available here.

New research highlights the financial and mental toll of pitching

Pitch processes are becoming longer, more onerous and are leading to agencies becoming far more selective about what they pitch for.

That’s according to a recent global survey of media agency professionals, conducted by global independent media advisors MediaSense. 

Why it matters

Pitching has always been a vital mechanism for clients to review or change their agency relationships, and for agencies to strengthen and showcase their offering in a highly dynamic and competitive marketplace. 

However, as the media landscape has evolved and clients’ requirements have changed, such reviews have become increasingly complex and time consuming for all parties. While agencies have become more accepting of this reality, there is a growing weariness about the current state of pitching, and a desire for more transparency and focus.

Takeaways

• 86% of agency respondents find pitching excessively time and cost exhaustive
• 64% find pitching damaging to agency culture
• 54% said pitching is increasingly affecting staff mental health
• Transparency received on selection criteria rated 4/10

Key quote

“While the pitch still remains a necessary vehicle for advertisers to source the right agency partner, this study reveals an overwhelming desire to evolve the process to one which is more streamlined, practical and transparent. While tempting to test everything, advertisers should focus on the capabilities and values that matter, and design a process accordingly” – Ryan Kangisser, Managing Partner, Strategy, at MediaSense.

Read the full MediaSense ‘Pitch Smart’ Study on WARC

Where generative AI formats go next

Generative AI has a huge number of potential applications for the many industries that produce ‘content’ – advertising being one of them – and new formats are in development that hint at the direction of their momentum.

Why it matters

The possibilities of AI in a marketing context are extensive and far from limited to specific formats. These are an increasingly prominent aspect of the possible AI arms race among the major tech groups, and the subject of some of Microsoft Bing’s proposals. Other firms – some with far bigger advertising businesses – are now on manoeuvres.

Google tries to solve its big question

When OpenAI released a public version of its ChatGPT bot late last year, everybody knew that Google had been developing a formidable AI operation, and had been a leader in the research side of the field.

But it had two problems: the potency of the technology on its release to the world, and the implications for its vast search advertising business when the search engine’s output is no longer sponsor-friendly links but prose-based answers.

Now it appears to be integrating the technology more and more into its central search operation, according to reports in TechCrunch, from the company’s Google Marketing Live.

• Context: Adding to last year’s automatically created assets, and drawing from landing pages, the new changes aim to make search ads more contextually relevant to the search query.
• AI for ad creators: In a system likely aimed more toward (the incredibly important) small business segment, Google is also introducing a natural language interface to aid search ad creation.
• Imagery: Photographers beware, as the company’s new Product Studio feature seeks to help sellers create AI-generated product imagery based on existing assets.

Spotify plans voice-based AI ads

Semafor reports that audio giant Spotify is developing generative AI tools that will allow host-read adaptations to ads based on variables like geography. For the moment, this will only take place with the host’s permission and won’t yet be stealing any jobs.

Two questions come to mind: is an AI-adaptable ad that powerful if the data that informs the adaptations might be compromised? The second is bigger: as voices and likenesses filter into generative AI systems – similar to CMOs’ worries about their brands being spoofed – who polices, or limits, their use?

Sourced from TechCrunch, Semafor, WARC

[Image: Dall-e]

New emotional brand metrics for dark times

Measuring brand metrics that inspire human emotions could sit alongside standard business metrics in future, says a new report from the Wunderman Thompson agency. 

The age of re-enchantment suggests that emotional KPIs that measure “heart swells, goose bumps, jaw drops, spine tingles, and more” will become increasingly important as people look for brands to bring some joy into their lives. 

Context 

War, climate change, disease and economic uncertainty are all contributing to a global mental health crisis, with young people, in particular, more stressed and anxious than ever before. Wunderman Thompson’s research indicates that almost half of people (46%) say they “feel tired and burned out all the time”, and two-thirds (67%) agree that technology is making us “feel more detached from the real world”. 

But 89% also say awe-inspiring experiences make them feel good, and 83% actively seek out experiences that bring them joy and happiness; 77% say “I just want to feel something, to feel alive”.

Why it matters 

There’s an opportunity for brands to step into this doomfest and lighten the load for consumers by giving them the sort of experiences they crave. More than six in 10 survey respondents (3,000 from the US, UK and China) felt brands should make more effort to wow them with spectacular advertising or marketing (67%).

What brands can do 

• Stand up for fun. Not only does fun offer a welcome respite in tough times, it’s a potential triple win for brands – delivering pleasure not only in the moment but also in its anticipation and recollection.
• Prioritise connection. With 85% complaining that we have less time for one another these days, brands can help facilitate meaningful connection via rituals and spaces (both physical and virtual) that bring people together.
• Enthrall the senses. Sixty-three percent wanted brands to provide multisensory experiences – and that applies in digital and virtual worlds as well as IRL.
• Escape the rational. Three-quarters (74%) enjoy an element of mystery and surprise in the things they do. Brands can build in moments of serendipity and the unexpected.
• Strive for better. Just 25% are positive about the way things are going in the world. By applying themselves to solving societal and environmental challenges, brands can foster some much-needed optimism.

Sourced from Wunderman Thompson

Unexpected ads gain attention but make sure it’s the right sort

Salient advertising features, such as using abrupt onset or motion, increase unexpectedness and attract more attention to online advertisements, according to a paper in the Journal of Advertising Research (JAR).

Why it matters

It seems axiomatic that an unexpected advertisement would be more effective in attracting consumers’ attention than an expected one – when consumers ignore online advertisements it’s often because they know what to expect and can easily filter them out. 

But it’s the nature of the unexpected ad that’s important. Pop-ups (abrupt onset) that get in the way of the information people are seeking are hugely annoying; floating ads (abrupt onset and motion) garner attention with less negativity.

Also important is the mindset of the viewer, whether they’re focused on a task or just browsing.

Takeaways 

• Online advertisements embedded with unexpected features – motion and abrupt onset, for instance – attract consumers’ attention in a bottom-up perspective (as opposed to top-down control of attention which is associated with the viewer’s awareness of the stimulus and its features).
• Unexpected advertisements more likely will capture consumers’ attention during goal-oriented tasks than free-browsing ones.
• Consumers are more likely to disengage from central processing during goal-oriented tasks and, therefore, are more attracted by unexpected advertisements than they might be during free-browsing tasks.
• Unexpected advertisements are associated with a more favourable attitude and less perceived intrusiveness than unexpected advertisements that obstruct the web content.

About the study

• How consumers process unexpected online advertisements: The effects of motion and abrupt onset on consumers’ attention and attitude was written by Emna Cherif (University of Clermont Auvergne) and Theirry Baccino (University Paris 8).
• The authors analysed the effects of three levels of advertising unexpectedness: high versus moderate versus low during both goal-oriented and free-browsing tasks. The context was a series of web pages that mimicked the front page of online newspapers.

Sourced from JAR 

Performance marketing effectiveness needs to get better

Marketing effectiveness is below pre-pandemic levels for the second year running, according to the Data & Marketing Association, with performance marketing effectiveness falling sharply, even as brand marketing effectiveness has improved.

Why it matters

The current economic climate has meant that marketing budgets are under more pressure than ever, with a greater burden on CMOs to prove the impact of their spend. This is leading to an ever-increasing demand to articulate short-term business outcomes at the expense of focusing on what drives long-term sustainable business growth.

Takeaways

The CMO Measurement Toolkit from the DMA highlights five key points for marketers: 

• Focus on measuring what matters to your business: Linking marketing spend to business outcomes (eg ROI, profit growth, and long-term customer loyalty) helps to sell the organisational value of marketing when budgets are under pressure.
• Assess which metrics are linked to business outcomes: Ad volume, efficiency and engagement, along with Net Promoter Score and Retention Rate growth, were found to be strong business effectiveness drivers.
• Contextualise marketing performance against benchmarks: Make like-for-like comparisons with relevant industry benchmarks when setting campaign KPIs.
• Stimulate future demand through brand building: Generating customer response to marketing comms is harder when household budgets are under severe pressure. Brand activity can itself drive sales directly and have a halo effect on performance / response marketing in the short term.
• Rediscover the lost art of creativity to drive campaign response: Performance marketing effects have declined by 62% over the past two years in the face of subdued consumer demand. Creativity is being severely underutilised in the performance marketing space. This is a big opportunity for advertisers aiming to arrest the decline in response effectiveness.

Key quote

“In a muted economic environment, there is only so much response that you can sweat out of consumers with your direct response advertising … [but] brand campaigns are getting more effective – those who are investing in them are getting better at doing them” – Ian Gibbs, insight and planning director at the DMA.

Increasing prices reshape the Chinese luxury market

The target audience for luxury brands in China is being reassessed as middle-class salaries fail to keep pace with rising prices.

What’s happening

The price of luxury goods has almost doubled since the pre-Covid period, as rising production costs have been passed on to consumers, and inflation takes its toll. That’s pricing out many aspiring buyers whose incomes aren’t rising at the same rate. “Luxury brands are now pivoting back to the elite in a bid to maintain exclusivity, and thus preserve the allure that once made them iconic,” Sixth Tone notes.

Background

The ‘daigou’ phenomenon – where people bought goods overseas cheaper and resold them in China – forced luxury brands to reassess the price differentials between western markets and China. Lower prices in China helped boost the local market and draw in a new demographic of buyers (one 2018 survey reported millennials were prepared to set aside 20% of discretionary income to buy luxury goods). Many of these buyers still had to save hard to make entry-level purchases, which were often limited to a celebration of a particular occasion.

Takeaways 

• Rising prices have led to many luxury consumers eschewing “bling” in favour of “quiet luxury”, either because of a new appreciation of timeless craftsmanship or simply from a wish to appear less showy during difficult economic times.
• Second-hand luxury outlets are doing well, with some products like bags even selling for more than new ones if they’re unavailable in store.
• There are reports that luxury brands, wanting to focus on high-end customers, are seeking to discourage ordinary walk-in buyers.
• High-net-worth customers account for 0.003% of the population but buy over 80% of all luxury goods.

Key quote

“All luxury brands have realized that core high-end customers are the key to survival and development. The brand on the top of the pyramid will have the best future” – Zhou Ting, co-chairman of research firm Yaok Group. 

Sourced from Sixth Tone

Aussie farmers demonstrate link between trust and brand use

Farmers who trust a particular agribusiness brand are 127% more likely to have used that brand in the past 12 months, a new study finds.

That’s according to a special Roy Morgan Agribusiness Survey* of farmers looking at trust and distrust in Australia’s agricultural sector. 

Why it matters

The findings show a direct correlation between trust and brand use: those who trust brands are much more likely to use them, and to use them regularly. And the reverse is true for those who distrust brands.

Takeaways

• The top reasons farmers give for trusting a brand are ‘strong customer relationship’ (26%), followed by ‘good customer service’ (12%) and a ‘good track record’ (8%) – which highlights the importance of relationship-building to gain repeat business.
• Farmers who distrust agribusiness brands are 53% less likely to consider using those brands in the future.
• In 2022, Elders was the most trusted agribusiness brand by Australian farmers; NAB was the most trusted bank for agribusiness.

Key quote

“When customers trust a brand, they continue buying its products or services, they recommend it to others and remain loyal to the brand. So trust is the underpinning foundation of brand reputation” – Michele Levine, CEO at Roy Morgan.

*Roy Morgan interviewed 1,230 Australian farmers

Sourced from Roy Morgan

Tips for the data besieged

An advertising industry overwhelmed by data considered how to navigate the tsunami of information at an IPA event in London. 

Signals in the Noise considered how much audience measurement can be trusted, accountable and transparent, hearing from the likes of economists, broadcasters, regulators and data officers. 

Why it matters

“Data, data everywhere, not a drop to drink,” observed one speaker, a line that would have baffled Samuel Taylor Coleridge. For the modern marketer attempting to put messages and money into a kaleidoscope of platforms and channels, working out whether these myriad sources do what they say they do can make it difficult to see the wood for the trees.

‘The big spreadsheet in the sky’ is a myth

Tim Harford, who writes the Undercover Economist column for the FT, noted the tendency to believe that all this data comes from “the big spreadsheet in the sky” – but not all data is created equal. Which is why returning to the first principles on data is vital, even for seasoned practitioners.

What you need to know

Harford outlined the following three ideas:

• Data production is a choice. What we choose to count and how we choose to count it matters enormously. While we often think about torturing statistics to get them to say what we want them to, the bigger mistakes come from the source of the data (or the lack of source).
• Data needs to be taken seriously to be trustworthy. Just saying it’s trustworthy won’t cut it; providers should seek to make it comparable and as transparent in methodology as possible.
• With the above in place, a little rigour goes a long way. Only once you’ve done the basics can the devastating insights of data wizardry can happen. But, ultimately, if bad stuff goes in, bad stuff comes out.

Bottom line

Harford stresses, both in his columns and in his views at the event, that data needs to be taken seriously in organisations – to be thought about in advance and gathered consistently and transparently, not for winning an argument with a really nice simple stat. 

After all, as Chris Ladd, head of media at Nationwide Building Society, noted later: every CFO expects verification because every single financial release that they have put together has been audited, seriously.

Reported from IPA: Signals in the Noise by SPT

New York Magazine’s headwind-resistant retention strategy

New York Magazine, the venerable publication owned by Vox Media, adapted its newsletter strategy in 2019, resulting in a doubling of its audience base and a 10% improvement in subscription retention just in the last year, according to reports.

Why it matters

Sustainable digital publications are something of an oxymoron without subscriptions, which are critical to NY Mag’s business, and one of the attractive elements to Vox Media when it acquired the property in 2019.

As a result of the recent economic tumult, and the sensitivity of digital advertising to fluctuations in advertiser confidence, subscriptions tend to weather storms more effectively, provided they give readers what they want. Keeping paying subscribers engaged is the aim of the game.

What’s more, the format is a brilliant testing ground for new ideas that can start as one-offs but can then become valuable products in and of themselves, a kind of minimum viable product.

What’s going on

“Part of the value of a subscription business for a company like Vox Media is that it is counter-cyclical, in that it can buffer a bad advertising period,” editor-in-chief David Haskell told Adweek, in a story about the magazine’s strategy.

One of the ways it has done this is through its suite of newsletters, which has now reached one million email subscribers to 30 separate products, both standard newsletter offers paid for by programmatic ads, and subscriber-specific “pop-ups” around big cultural moments, like the current and final season of hit HBO show Succession.

•  Through a combination of internal traffic and social media play, the magazine’s three newsletter editors and its writer design newsletters around topics that appear to make readers want more.
• Specificity is crucial to the company’s newsletters, but even a small audience is a strong move for the company when its newsletters achieve a 39% open rate among non-paying readers and 64% for subscribers, the magazine told Adweek.

Sourced from Adweek

Brand in action: How SanKash made travel more affordable

Travel start-up SanKash started in 2019, just as Covid put a freeze on the entire travel industry, but the company buckled down, improved its product, and leveraged the Buy Now Pay Later (BNPL) model to meet unprecedented customer demand.

Why it matters 

Brands can occasionally make the mistake of not evolving fast enough to meet customer demand when they already have a successful product. SanKash recognised that it could take Buy Now Pay Later – already proven in the travel sector – and apply it to another big-ticket item: marriage. This type of innovation has put the brand in prime position to take advantage of new opportunities. 

Takeaways 

• SanKash clients are experience-seeking and middle-aged, not Gen Z; they are financially stable and understand credit bureau scores.
• Half of Indians who use BNPL see it as a cash flow management tool because they are not paying anything extra for a loan.
• The biggest challenge is the regulatory framework, with old laws that need to change, causing uncertainty in the ecosystem.