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WARC Talks: 3 in 15 – Lessons from the Effective 100

In this episode of the WARC podcast, David Tiltman, WARC's SVP Content, is joined by Amy Rodgers, Head of Content for WARC Creative, to discuss some of the key findings from the Lessons from the Effective 100 report.

Takeaways 

• This year’s rankings show that effective campaigns are innovating in extending reach in social media and gaming, including, for example, by using virtual influencers.
• Food and drink advertising ranked highly in 2023, partly through impactful use of celebrities.
• Campaigns using traditional, non-digital media indexed highly in the 2023 rankings as both lead and supporting channels.

Listen to the full episode here

Timestamps

1:42 – Background to the WARC Rankings and the Effective 100.

3:10 – ‘Peak purpose’.

4:02 – Extending reach in social media and gaming.

6:26 – Innovations in virtual influence.

10:46 – Creating impact in food and drink advertising.

13:51 – Use of celebrity in food and drink.

16:23 – Winning creative strategies include use of celebrities, influencers, emotion and storytelling.

20:00 – Traditional media channels index highly in the Effective 100.

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.

Whatsapp seeks to emulate Telegram’s quiet success with Channels

Whatsapp, the Meta-owned messaging service, is introducing a one-to-many broadcast feature called Channels to the app, which will allow creators, brands, and organisations to speak to an audience like a social network but without the baggage.

Why it matters

Meta is going back to its social networking basics one of its most popular global apps now that a gap in the market has opened up for a sticky, but less toxic social news feed. For brands, it could finally be a route to engaging with WhatsApp’s vast but as yet unmonetized user base.

The news follows the emergence of Telegram as a social network as well as a messaging service, especially in Ukraine, where the service has become an important, if flawed, source of news following Russia’s invasion.

While it’s only in an early phase, WhatsApp’s new feature suggests something similar – and more traditionally respectable – across the app’s more than two-billion-strong user base, along with several other social-network-like features from commerce to content.

The announcement

On the WhatsApp company blog, the service announced the new Channels feature, which will appear alongside the Instagram Stories-style Status, in a new updates tab. The service will launch first in Singapore and Colombia.

“Channels are a one-way broadcast tool for admins to send text, photos, videos, stickers, and polls,” the brand writes. Users will be able to find channels through a directory and links.

Privacy is a significant aspect of the announcement, for both admins and followers, with a suite of features to protect identities and the make-up of the channel community.

Looking ahead

“We also believe there is an opportunity to support admins with a way for them to build a business around their channel using our expanding payment services as well as the ability to promote certain channels in the directory to help increase awareness,” the service adds.

This is particularly interesting, as it starts to push WhatsApp into numerous potential paths built around monetisation through payments – presumably to individual creators or to retailers, depending on the occasion.

In context

When Meta (then Facebook) bought the messaging app WhatsApp in 2014, it knew that the service had the potential to be one of the world’s most popular messaging tools – it now has over two billion frequent users – but it has always proved difficult to monetise.

There have been some promising efforts toward the original hypothesis that it could be a route for businesses to talk to and sell to consumers, especially in India and in Brazil.

Sourced from WhatsApp (Meta), WARC, Business of Apps, DW 

[Image: Meta]

Retail media viewed as part of the holistic media mix

A combination of traditional retailers and Amazon retailers is expected to build a US$2bn retail media segment over the next five years. 

That's according to a PwC forecast, based partly on an industry survey* of 117 advertising investment decision-makers or influencers conducted by IAB Australia.

Why it matters

Retail media has the potential to grow the advertising investment pie, driven by technological advancements, but retail media networks that are not being integrated with other tech is the top barrier to partnering with retailers.

Key insights

• Retail media advertising campaigns are focused on the bottom of marketing funnel objectives, and reaching shoppers at the point of purchase is seen as a main opportunity, with nearly nine in 10 respondents using retail media campaigns to increase sales.
• The top opportunity of partnering with retailers for over half of respondents is getting access to first-party data – six in 10 see retail media as a key part of their advertising strategy following the deprecation of third-party cookies.
• It will be important for retailers to build trust, transparency and understanding of the data-value exchange with consumers to ensure ongoing collection.
• Almost a third of retail media investment (31%) is coming from new budgets, while 69% is reallocated from other budgets (such as digital advertising and trade retail budgets).
• Currently, retail media activity is focused on search and display ads for retail-oriented advertisers; search and display ads are the most used formats, although there is high appetite to try in-store point of sale and off-site extension retail media options.
• Those advertisers and agencies currently participating in retail media activities are more likely to be in FMCG, retail, health and beauty, and alcoholic beverage categories.
• Technology that provides accurate attribution is considered a key requirement and it's currently seen as both an opportunity and barrier for retail media; there are high expectations for closed loop attribution and true ROAS reporting.

*The IAB Retail Media Working Group conducted an industry survey in February 2023, with 81% of respondents having had experience partnering with retailers to advertise to or reach consumers. The insights gathered will help to prioritise industry education and training and identify the most pressing needs of marketers in relation to planning, buying and measuring retail media activity.

Flipkart taps mindsets rather than geographies

Flipkart, an Indian e-commerce company, reframed its understanding of key target audiences – and of Indian society in general – to better target its business.

Why it matters

In order to solve issues such as lack of trust and perceptions of low quality, Flipkart needed to understand customer behaviour in India’s burgeoning e-commerce market.

Recognising that the internet and economic and social liberalisation had changed Indian demographic assumptions, the research identified six different mindsets that exist across India’s geographies.

Takeaways 

• The six mindsets are: global mindset, urban aspirers, dislocated migrants, validation seekers, traditionalists, and insular consumers.
• Having recognised the educated, globalised and connected ‘global mindset’ group as a key target audience, qualitative and quantitative techniques were used to further segment it and understand its motivations and behaviours.
• These insights led to targeted interventions around search algorithms and personalisation, contributing to increases in consideration and market share.

Key quote

“Our in-depth work resulted in understanding that we have long departed from cohorts and segments, and emerged into consumer mindsets, which means they are agnostic to the geography and location” – Priyanka Bhargav, Senior Director, Brand Marketing & Head, Consumer Research & Insights, Flipkart. 

Read more in this ESOMAR paper: Flip the coin: Refreshing / rehauling / reforming the way we understand customer behaviour

LIV-PGA merger: a global opportunity with strings attached

News of Saudi Arabia-backed LIV Golf’s merger with the US PGA Tour and the European DP Tour points to the creation of an F1-style global organisation for golf, but the deal’s opportunity for brands threatens to put them in a tricky spot.

Why it matters

It may be at a geopolitical level, but fundamentally this comes down to brands and branding, part of a larger story about the Saudi Arabian Public Investment Fund’s (PIF) increasing involvement in the world of sport as a branding exercise. But buying teams and buying entire sports are very different moves, with serious implications for golf’s sponsor brands, players, and the ecosystem that surrounds them. 

The news

Sources tell the FT that the cash infusion from Saudi Arabia’s PIF could be as much as $3bn to make the deal. As the DP Tour and the PGA had previously banned any players that dared to join LIV, while enjoying the loyal support of major players, there is deep tension about the news.

• The deal will see a joint entity to manage both commercial operations – the PGA will continue to exist as a governing body – and is intended to bring to a close a flurry of lawsuits, including a knotty antitrust case against the PGA. Each party had sued, and the other had countersued, and there was no end in sight.

Saudi involvement in global sport

In the UK, Saudi Arabia’s engagement with sport has taken the shape of the acquisition (as part of a consortium) of the Premier League football team Newcastle United, while in the more rarefied world of golf, the PIF attempted to launch a whole new league and organisation, LIV.

Largely because of the association with the oil-rich kingdom, which was held responsible for the 2018 assassination of the regime-critical journalist Jamal Khashoggi, LIV struggled to attract sponsors or TV network partners, and some golfers who joined the organisation lost sponsorship.

Despite this, it’s likely that a lot more money is going to flow into the game of golf. Certain major organisations in the sport, such as Augusta National and Royal & Ancient, have welcomed the “harmony” it will bring to the otherwise divided sport. 

Where next?

Where this leaves a post-merger golf company, which has the potential to become a global business in the style of Formula 1 or the ATP Tour, is anyone’s guess. Some of the PGA’s golfers have openly criticised the move as shameful and a betrayal.

“I recognize that people are going to call me a hypocrite,” PGA Tour commissioner Jay Monahan said, in comments reported by the Wall Street Journal. “Anytime I said anything, I said it with the information that I had at that moment, and I said it based on someone that’s trying to compete for the PGA Tour and our players.”

What it means for brands is similarly complicated: the tussle for the soul of golf really points to a tussle over the lucrative commercial opportunity that has long attracted major business-to-business, finance, tech, and luxury brands – can they weather the association? If the experience of Newcastle United or, more successfully, the Abu Dhabi-owned Manchester City are a guide, it’s possible that the furore will diminish.

But buying a team is very different from buying a sport in its entirety. The PGA, which is under investigation by the US Department of Justice, is now attracting political pressure from both Democrats and Republicans.

Sourced from the FT, WARC, The Athletic, AP, WSJ, Golfweek

B2B marketing leaders look to increase use of Generative AI

Three-quarters of B2B marketing leaders plan to increase the use of Generative AI in the next year, according to new research from LinkedIn. 

That’s one of the findings in The B2B Marketing Benchmark – a study of nearly 2,000 senior B2B marketing and finance leaders from organisations across the globe.

Key findings

• Specifically, B2B marketing leaders intend to use Generative AI to create more content in less time (56%), to improve efficiency (55%), and to create engaging content (51%).
• Almost two-thirds (64%) of B2B CMOs also say brand-building has been elevated in importance by the C-suite as companies look to win share in the current climate.
• Consequently, B2B CMOs say they have learned the language of finance (80%) and strengthened their skills to prove the value of brand marketing to their CEO and CFO (84%): 60% of CFOs now feel optimistic in marketing’s ability to drive revenue in the year ahead. 
• A priority of 52% of B2B marketing leaders is to champion bolder creative in their campaigns to improve mental availability; France (at 64%), Germany (53%), India (51%) and the UK (51%) are leading the way here.

Why it matters

The ability to create more, and better, content, more quickly is becoming crucial for B2B companies seeking to build their brand and engage decision-makers. Generative AI has the potential to transform how companies achieve that goal. LinkedIn, for example, is piloting AI-generated Copy Suggestions, creating high-performing intro text and headlines for ad creatives by leveraging data from an advertiser’s LinkedIn Page.

Sourced from LinkedIn

LinkedIn will be participating in the 2023 Cannes Lions International Festival of Creativity, including a session with WARC: How A Promise To The Customer Gives Campaigns The Edge

The barriers to producing great creative

Some of the barriers to producing great creative seem to have been around forever – bad briefs being one example – but others, such as social media and hybrid working, are more recent.

Why it matters

Creativity is a powerful driver of advertising effectiveness. A consultation for Thinkbox, led by advertising strategist and creative leader Laurence Green, involving 34 senior agency and client practitioners, highlights actions that can help foster creativity. At the same time, however, it also suggests that the easiest and quickest way of enabling creativity is to address those things that get in the way.

Eleven obstacles 

• Lack of time spent establishing a common mission
• Talent tilted towards science, not art, with logic squeezing out magic
• A drift towards short-termism, performance marketing, and immediately measurable activity
• A climate of risk aversion fuelled by potential social media backlash
• Short tenures and churn
• The rise of project work rather than retained relationships
• Hybrid working stymieing serendipity
• Lack of access to senior decision-makers
• Bad briefs
• The sometimes perverse incentives of creative awards, with tactical activations winning more than ongoing, strategic brand-building
• The diminution of craft skills.

Key quote

“We need to start with the barriers, because there are many … and because some can be tackled, sometimes even just by raising awareness of them” – Laurence Green, IPA Director of Effectiveness.

Sourced from Thinkbox

Ambitious in-house agencies need strategy capabilities

In-house agencies are evolving, with half aspiring to become a lead creative agency for their brand in future, a new study finds, but for that to happen they’ll need to develop greater strategy capabilities.

That’s according to a survey of in-house agencies, conducted by the In-House Agency Leaders Club (IHALC) across almost 50 brands in the UK and EMEA, that aims to provide benchmarking data for the sector.

Why it matters

In-house agencies (IHAs) are growing more confident in their abilities, with around 60% now working on above-the-line advertising and headcount expected to increase this year. But the study notes that “there is still work to be done to ensure alignment between what the IHA believes it is there to do, and the actual remit and/or operational potential afforded to the business”.

Takeaways 

• External agency partners remain a vital part of the mix, for now, with 82% of IHAs turning to them for above-the-line campaign creative and 64% seeing them as partners rather than rivals.
• IHA leaders score their marketing colleagues poorly for quality of briefing, understanding the creative process and ability to give feedback.
• Only 35% of IHAs currently have any planning capability; only 22% have a strategy director or equivalent.

Sourced from IHALC

Can Apple crack the VR puzzle?

Apple’s Vision Pro is a test of whether a head-based computer – in the guise of virtual, augmented, mixed, or extended realities – can have a commercial or cultural impact, something which has eluded the technology up until now.   

Why it matters

Is this the new iPhone? Should every developer and every brand start ploughing millions into showing up on this new device? 

Previous examples of headset-based technology have always struggled against several complicated factors: comfort and weight, price, a lack of applications and content, as well as the problem of human vanity (or not wanting to look like a dork). 

Use cases are fast emerging, and the average level of application quality appears to be improving – but it’s not yet mainstream behaviour beyond gaming circles.

However, iPhone-era Apple doesn’t tend to invent entirely new categories as much as it takes the best elements and makes them beautiful, simple, and useful. So the fortunes of the Vision Pro will be something of a reckoning for the company’s formula: success could ignite an entire industry and the future of computing. Low-level adoption, by contrast, would likely see the product pivot to B2B use cases, similar to Microsoft’s HoloLens or Google’s Glass.

What’s happened

The device (pictured) was unveiled on Monday at Apple’s WWDC ‘23 conference, giving developers the chance to start building for the ecosystem that Apple hopes will come alive following the product’s US release in early 2024 (other countries will follow later that year).

Apple’s introduction of the device included several applications of “spatial computing,” which you are likely to have already seen:

• A 3D workspace
• A movie theatre mode
• Video recording through the headset
• Spatial facetime (in which wearers’ digital representations become their uncanny avatars during the conversation)

The potential: sleeker and simpler than the competition

Beyond the launch apps and the headset’s similarity to ski goggles, there’s an element of the device with enormous potential: the new controller-free interface using eyes, hands, and voice. “Users can browse through apps by simply looking at them, tapping their fingers to select, flicking their wrist to scroll, or using voice to dictate,” the company explains. 

Interestingly, its ambitions here are less grandiose than triggering the next phase of the internet, and the word ‘metaverse’ was conspicuously absent. Although there were ways to interact with other people and with the internet, Monday’s launch was all about people’s interaction with the device.

Improvements to the experience, such as a translucent mixed-reality mode, are – along with the interface –  encouraging but not yet transformative. It remains a chunky piece of kit. And despite the presence of Disney+ content on the platform at launch, it’s not only Apple but the whole VR industry that is still searching for a killer app to justify the high price.

Price: The elephant in the room

Priced at $3,499, the device is seriously expensive compared to other consumer-focused offerings like Meta’s forthcoming Meta Quest 3 ($499.99). Its closest competitor at the same price point is Microsoft’s business-focused HoloLens ($3,500).

Bottom line

Though it is a very expensive device, Apple may choose to market the product as a replacement to a personal computer – as much a tool for work as a conduit for entertainment – which could begin to justify some of the price. But the competitive set is totally different here; the kind of people looking at $3,500 computers are usually looking for pro-level performance gains and a tried-and-tested solution.

This said, it’s hard to escape the sense that Apple has the gravitas to immediately establish itself at the very top end of this nascent industry and has suggested to any headset-making competitors that they are now the hardware to beat.

The final, critical point, is that humans don’t tend to be that individual when it comes to being entertained; screens big and small have slotted into our social and family lives neatly. Habit is hard enough to break, and it will be a special device from a special company that is able to buck that trend from the top of the pricing spectrum.

Sourced from Apple, WARC

[Image: Apple]

It's Pride Month and advertisers are nervous

Some advertisers are reported to be rethinking their support for LGBTQ+ issues as right-wing media stoke a “war on woke”. 

Context

The nervousness comes in the wake of a backlash against Bud Light, which has been promoted by a transgender influencer, and Target’s decision to sell a PRIDE clothing range. 

Both brands have been forced to backpedal to a degree, after facing threats of violence against property and people, and lost sales in the case of Bud Light. But both are still sponsoring celebrations across the US: Target is a platinum sponsor of NYC Pride, while Bud Light parent company Anheuser-Busch is a sponsor of Pride celebrations in Chicago and San Francisco.

Other big brands – Kohl’s, Lego, Southwest Airlines, PepsiCo, Starbucks, and General Motors – are also continuing to support Pride. 

Why it matters

While brands may feel it necessary to reassess how they show support in order to avoid putting employees at risk, Pride organizations are understandably disappointed at anything that is seen as a climb-down. "The wavering is what’s causing some mistrust in the brands,” Amy Luca, SVP of social at Media.Monks, told Business Insider. 

There’s a danger of alienating both sides but ultimately it comes down to integrity. And money. Are brands involved in virtue signalling or will they capitulate to a vocal minority opposed to human rights? And are they prepared to ignore the estimated $1 trillion spending power of the US LGBTQ+ community?

Key quote

“We stand by our values and we’re a highly inclusive organization. And we think the bulk of America is as well” – Jeff Gennette, CEO of Macy’s. 

Sourced from New York Post, Business Insider, Fortune

What's the future of print?

The shrinking size of the print ad market reveals that many marketers are shifting investment away from news and magazine media, but remaining players may benefit from reduced clutter, a new WARC Media report suggests.

Why it matters

Print remains a mass media, for now, but appears midway through a transition towards being dominated by digital format consumption, especially in North America and Europe. At the same time, newsbrands have looked to diversify away from advertising. For example, The New York Times’ share of revenue coming from print and digital ads dropped from 40.4% in 2015 to 22.6% in 2022. 

Takeaways 

• Global publishing print ad revenue has collapsed from $75.9bn in 2016 to $37.3bn in 2022.
• Globally, print press has the lowest reach of any major channel monitored by WARC Media and GWI. Consumption of print media will be overtaken by both games consoles (68.0%) and podcasts (68.8%) in 2023.
• Consumers in Asia-Pacific remain more committed to publishing media than those in other regions, with a forecasted average daily consumption of more than two hours in 2023.
• But consumption is increasingly dominated by digital formats. In Q3 2022 in APAC, more than half (56.7%) of the time spent with publishing media is expected to be with online, rather than print, content.
• Research by Peter Field and UK trade organisation Newsworks found that newsbrand advertising has a big effect on profitability and contribution to market share growth, and that this effect rocketed after 2016, due to newsbrands’ perceived trustworthiness.

Read more in The Big Picture: Print, from WARC Media

Why Western luxury brands need to understand China's Gen Z

The luxury market in China is very different to that in the West, in part because of the younger buyer demographic. 

Why it matters

Where Western brands have generally tended to focus on older Gen X or Gen Y purchasers, it’s Gen Z which is important in China: the average age of luxury purchasers is just 29. These consumers are hard-working, optimistic, and ready to reward themselves. 

What Gen Z expects

Writing in Jing Daily, Équité’s Daniel Langer highlights five areas to focus on: 

• Digital innovation: The online retail experience needs to be truly engaging. Too many Western luxury brands are failing to deliver the top-level consumer experience that China’s Gen Z now expects on digital platforms like WeChat. 

• Authentic brand narratives: Western brands can’t simply transplant their existing narratives to China. Without adapting to local sensibilities, these won’t resonate with consumers.

• Social responsibility: China’s Gen Z consumers are quick to hold brands accountable for their societal and environmental impact, so Western luxury brands need to communicate their stance on these issues effectively.

• Celebrity partnerships: Western celebrities generally aren’t as effective as local celebrity endorsement. 

• Personalised offerings: Limited editions can cater to a Gen Z desire for individuality and exclusivity.

Key quote

“[Gen Z] consumers seek more than just products; they want their brands to reflect their values, engage with their culture, and provide a digital-first, personalised experience. Navigating these expectations will be the key to thriving in this promising yet demanding market” – Daniel Langer, CEO of luxury brand adviser Équité.

Sourced from Jing Daily

Asia avoids, mostly, the war on woke

The recent experience of Bud Light and its use of a trans influencer highlights how the culture wars can engulf a brand, but the picture is more nuanced outside the particular environs of the US. 

Why it matters

Brands clearly want to be in step with culture and to generally connect with progressive youth – to be more “woke”, if you will – but they also have to be cognisant of the different cultures and politics of the Asia region. Associating themselves with Pride month, for example, could make sense in the UK or US but consumers across APAC are less likely to expect brands to address this issue – they’d rather see a focus on environmental, health and educational issues, according to Ipsos. 

Takeaways 

• Research from GWI indicates that the main reasons APAC consumers say they would boycott a brand are: harmful behaviour directed towards specific communities (57%), unethical manufacturing practices (54%), violating regulations (51%), behaviour that is not environmentally friendly (50%) and transphobic behaviour (50%). 
• The region lacks the sort of far-right news media (cf. Fox News) that actively seek out perceived threats against conservative values and stoke culture wars. 
• “Anti-woke” activity in Asia tends to be led by governments or religious groups; for example, religious groups in Indonesia and Malaysia have encouraged a boycott of Starbucks over the brand’s support for LGBTQ+ rights.

Key quote

“Generally, ‘approved’ issues like sustainability, climate change and female empowerment are safe for brands to engage with through marketing campaigns, while issues like LGBTQ+, race, class or even mental health are decidedly more sensitive” – Zoe Chen, strategy director at Virtue APAC, speaking to Campaign Asia.

Sourced from Campaign Asia