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.

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

Twitter’s advertising woes deepen amid executive turmoil

Internal documents from Twitter suggest that the social media company’s ad revenues are down 59% on this period last year, just one of the service’s advertising woes as top-level departures fan brand safety fears.

Why it matters

It was always going to be interesting: since Tesla and SpaceX CEO Elon Musk’s first murmurs of interest in buying the company for a meme-worthy price per share, the story of Musk-era Twitter has taken place in the full glare of the media. The billionaire has readily courted controversy in his public statements and tweets, while some of the policy changes, such as paid verification, have thrown up serious questions about the place of brands on the platform.

Twitter has for years been more influential than its commercial profile would suggest, but its current financial performance is apparently lagging behind even last year’s figures. The arrival of a CEO with strong pedigree across traditional and digital media appears to be a step in the right direction, especially as the company explores new avenues – like payments – that will require the trust of both its user base and brands.

Ad revenues fall

Documents seen by the New York Times indicate that April-May US ad revenues this year were down 59% year-on-year to $88m. A further document forecasts a 56% drop each week compared to the same week last year over the coming month.

In context

New leadership incoming: The news comes as Twitter’s new CEO Linda Yaccarino, a media veteran most recently at NBCUniversal, is set to take the helm of the ailing company which has struggled to keep advertisers onside following the drama and brand safety fears of the last year.

An aura of chaos: Concerns often centre on the talkative nature of Musk’s leadership, with the owner’s tweets sometimes pre-announcing important decisions. This has added to the aura of chaos that has seen some copycat accounts being mistakenly verified as advertiser brands, with the experience of Disney a significant example.

Important departures: Recent departures of company executives from brand safety and content moderation teams have done little to allay advertisers’ nerves. CNBC reports that the company has lost its VP of trust and safety as well as its head of brand safety and ad quality in quick succession.

Financial implications: In April, revenue forecasts for the full year suggested that the company was set for an overall revenue decline of 28% in 2023. Analysts at Insider Intelligence put it bluntly: “Advertisers don’t trust Musk.”

Sourced from The New York Times, WARC, Deadline, CNBC

Brands tap emerging sports in India 

Even as the reach of the IPL expands, brand investment in sports other than cricket continues to grow, and at a faster rate.

What’s happening?

IPL media rights owners have sought to maximise the reach for their investments – JioCinema streaming games for free and Star Sports broadcasting them on FTA and GEC channels. And digital channels have brought in more ad revenue than TV for the 2023 tournament, insiders tell Afaqs!, at Rs 2,300- 2,500 crore compared to 1,800-2,000 crore.

But while the IPL juggernaut rolls on, other sports are also booming. Data from GroupM ESP’s Sporting Nation report shows India’s sports business – sponsorship, endorsement, media spend – hit Rs 14,209 crore in 2022, 49% up on a year earlier. And while spending on cricket grew 44% (to Rs 12,115 crore), spending on emerging sports, such as kabaddi and football, was up 87%, albeit from a much smaller base (to Rs 2,094 crore). 

Why it matters

Industry observers note a post-COVID surge of investment funding for startups and brands looking to expand. “These brands have identified sports and live events as one of the fastest mediums to gain quick momentum and establish connections with their customers,” the President, Investments at Havas Media India, explains to e4m. 

Takeaways 

• Success on the international stage helps boost the popularity of individual sports and success becomes more likely as the government increases spending on sports development.
• A plethora of new sporting leagues is attracting new audiences and new advertising categories.
• Brands are increasingly willing to consider advertising around non-cricket sports. 

Key quote

“Emerging sports are becoming part of brands’ marketing calendar and making advertisers work on a tactical approach to cash on these sporting opportunities” – R Venkatasubramanian, President, Investments at Havas Media India.

Sourced from Afaqs!, e4m

The complex world of virtual influencers

Virtual influencers, models, and KOLs are a growing trend and while they present opportunities there are also significant issues that marketers need to think about when engaging.

Why it matters

Virtual influencers aren’t particularly new, with brands ranging form Samsung, to Balmain, to LG, to Magnum deploying these technologies, some as far back as 2018. But with the emergence of AI, the use cases and the questions surrounding the tech become tougher.

The good

The benefits for brands include hyper-flexibility to campaign needs, video-game tie-ins, and inherent cross-channel applications.

As Jing Daily argues, there are opportunities in the metaverse-like virtual worlds (still), as well as a broader opportunity for gamification designed to speak to gaming-friendly Gen-Z.

Arguably, the strongest opportunity lies in the branded possibilities of virtual characters – such as those made famous by their video game manifestations. Meanwhile, the stronger argument is that they can be a lot cheaper than real influencers.

The bad

Sixth Tone takes a very different angle on the story, noting the increasingly sexist and objectifying creations of AI-generated virtual models as they grow both on social media and as instruments for brand promotions – in short, the male gaze appears to be baked into many of these models.

The report finds that many such AI-generated images look to an ultra-sexualised, unrealistic and toxic idea of women, through a kind of doll-like quality. For marketers, aside from the considerable ethical problems, there is also the issue that female models typically advertise clothes bought by women.

As Xu Ke, a graduate student at the China Academy of Art, quoted by Sixth Tone, wrote: “Can creators be aware that images of female models should serve females?”

Sourced from Jing Daily, Sixth Tone, WARC

Meta tests news blocking in the face of legislative pressure

Meta faces new rules in Canada and California that are deeply reminiscent of recent regulatory changes in Australia – some of the tactics it is using to resist the changes are deeply reminiscent too – but it is likely that these laws will pass despite protests.

Why it matters

It’s strange to see both Meta – the owner of Instagram and Facebook – and, to an extent, Google repeat the unsuccessful tactics they deployed in Australia, where collective bargaining laws now exist. It means that technology firms now need to pay local publishers in the country for linking to news content or making it available on their platforms. 

As much in California as Canada, and Australia before it (where there were hints that news could just be turned off), the effort has provided politicians with useful ammunition against the company, as their plucky states/countries stand up to Big Tech incarnate.

What’s going on: bargaining laws on the rise

In Canada: Meta is gearing up to test news blocking for a sample of Canadian users across its Facebook and Instagram properties, according to reports in The Toronto Star.

• The tests, which echo some similar measures from Google that also blocked news links, are a response to a law currently going through the Canadian senate.
• The Online News Act emulates much of Australia’s News Media bargaining code by providing collective bargaining abilities for news outlets, arbitration, and a preference for voluntary agreements, according to the Canadian Government.

In California: Threats to remove news content from users in Meta’s own home state just a day before the California Assembly voted to advance the Journalism Prevention act to the State Senate appeared to have strengthened the resolve of lawmakers, the Sacramento Bee reports.

• California’s draft law is similar, in that it requires platform companies to pay a percentage of ad revenues to publishers as a “journalism usage fee” which is then intended to go toward funding staff at newspapers around the state. Smaller publishers will also be allowed to negotiate jointly with platforms.
• Similar to arguments elsewhere, Meta argues that instead of helping struggling local publishers, funds would flow toward major publications out of state. It has also argued that less than 3% of content on the platform is news.

Did it work in Australia?

When Australia’s News Media Bargaining code came into force in early 2021, the story was closely followed around the world – an impact that likely influenced the above laws.

But its impact has not been an unalloyed success. Both Google and Meta appeared to set about making deals with publishers even ahead of the law coming into force. These tended to go to the largest and loudest publishers in the country, while the government was often reluctant to step in and designate platforms, thereby ‘forcing’ negotiations, as it was characterised by Meta. Despite this view, it’s light touch.

Imperfect as the law is, it appears to have been quite effective for publishers, who received around $150m USD ($200m AUD). This is according to Columbia Journalism School’s Bill Grueskin who has studied the effectiveness of the law.

Sourced from Toronto Star, Government of Canada, NPR, Sacramento Bee, Columbia Journalism Review, WARC

Adidas puts unsold Yeezy stock back on sale, proceeds to be donated

Yeezy come, not so Yeezy go: Adidas is selling remaining inventory stock designed by Ye – the artist formerly known as Kanye West – and donating a “significant amount” to organisations working to combat discrimination and hate. 

The decision follows the designer’s repeated antisemitic comments and is a move that aims to end the ethical and financial nightmare of the company’s conscious decoupling from Ye.

Why it matters

Brands exist in increasingly political times and the problems they face contain many complexities that don’t tend to occupy the conversation at the same volume as the central issue – but they are real. Adidas’ solution, while not devoid of problems, seeks to end the issue as soon as possible and start afresh, though there is a lot of inventory to sell.

But there’s a weird brand story here too. Despite the toxic association, it appears that enthusiasm for Yeezy sneakers remains strong.

The story

According to a press release from the company, a range of existing designs will be made available to consumers (through Adidas’ websites) for the first time since parting ways with West. These will be a series of three releases that echo the ‘drops’ that helped make the brand a streetwear icon.

Adidas is contractually obliged to honour the partnership’s 15% royalty contract, which means that Ye will receive some of the money from the sale – a fact that some Jewish groups, speaking to the New York Times, felt to be “highly problematic”. The company has, in fairness, attempted to stop payments but was prevented by a New York court from doing so. 

The sportswear giant cut ties with the rapper in October 2022, a move that would leave as much as €1.2 billion of unsold inventory and end one of the company’s most profitable brands. The company adds that it chose to see through production of the stock to protect supply chain partners.

Key quote

“We believe this is the best solution as it respects the created designs and produced shoes, it works for our people, resolves an inventory problem, and will have a positive impact in our communities. There is no place in sport or society for hate of any kind and we remain committed to fighting against it,” said Adidas CEO Bjørn Gulden in a press release.

Sourced from Adidas, The New York Times, WARC, Bloomberg

China’s influencer agencies strike out in new directions

Agencies representing China’s influencers are launching their own brands and exploring brick-and-mortar retail as livestreaming develops in new directions. 

For example, agency Jiaoge Pengyou (Let’s be friends) is making 200 million yuan ($28m) a year from Reloading Peacemaker, a clothing label it launched in 2021, Jiemian Global reports. 

Why it matters

The shine has been taken off influencers after several ran into problems with government authorities (eg evading tax) and new regulations began to constrain the sector. Agencies also have to contend with the fickle nature of online fame and the sometimes trying demands of celebrity influencers. But now, agencies are finding that selling their own brands is more profitable than relying on influencers and commissions from clients. 

Takeaways 

• The supply chain is a crucial factor but, given China’s manufacturing base, it is relatively straightforward to find a factory capable of making good quality products. 
• Product cycles for agency-owned, internet-sold brands can be far shorter than for existing rivals. In apparel, for example, it can be just 45 days compared to six months. 
• Some agency brands are looking to reduce their reliance on livestreaming for sales and get their products stocked in traditional retail outlets. 
• If livestreaming encourages impulse purchases, brick-and-mortar builds trust and connections, which brings customers back, explains the manager of one agency-owned brand.

Sourced from Jiemian Global

Apple’s India strategy taps deep demand

New reports from Apple’s latest retail locations in India indicate strong demand for the tech giant’s products in a market of major focus as its first two stores set electronics sales records.

Why it matters

Apple’s Mumbai (pictured) and New Delhi stores, which opened in late April, were not only a sign of a pivot towards India as a source of new sales in a high-potential market, but also for manufacturing operations as it moves away from its reliance on China.

Of course, new device sales aren’t the end of the process: the iPhone maker’s deeper services strategy, including its burgeoning advertising business, will be key to its India strategy.

The story

First reported in the Economic Times, industry executives aware of the stores’ performance tell the paper that they have made gross monthly sales of ₹22-25 crore ($266,9326 to $303,325).

Largely, one source says, it’s down to “the fact that the average selling price of Apple products is much higher, which leads to higher revenue,” adding that sales “have far exceeded” Apple’s own internal estimates.

In context

• The presence of the stores is somewhat symbolic, as the figures are a small part of the $6bn of sales the company made in India in 2022.
• Overall India sales are expected to grow 31% this year, a strong subsequent act on 2022’s nearly 50% year-on-year growth.
• More broadly, new product sales are only part of the strategy in a relatively price-sensitive market like India, where a lot of potential to bring people into Apple’s ecosystem exists alongside the aspirational purchases of the fast-growing middle class.

Sourced from the Economic Times, WARC, Reuters 

[Image: Apple]

Digital ad spend slowdown set to persist until 2025

The days of fast-paced, double-digit percentage year-on-year growth in global digital advertising spend may be gone for good, a new forecast by Dentsu suggests. 

Why it matters

The industry has witnessed two decades of rapid market expansion for digital media. Dentsu figures show that digital ad investment growth has only dipped into single digits twice previously: in 2009, at the height of the global financial crisis, and again in 2020 during the Covid-19 pandemic.

However, Dentsu’s latest report predicts a 6.6% three-year compound annual growth rate (CAGR) in worldwide digital ad spend to 2025, with year-on-year decelerating from +7.8% in 2023 to +5.9% in 2025. It appears to confirm that digital media is nearing the top of its ‘S-curve’ and entering a period of slower, more steady growth. 

Exceptions to the rule

Despite the slowdown in investment with established digital ad formats like display (+7.3% in 2023, totalling $224.8bn worldwide) and search (+8.9%, $150.0bn), some parts of the digital ecosystem are seeing much higher rates of growth. 

As more inventory becomes available and technology improves, both connected TV (+22.3% three-year CAGR to 2025) and retail media (+20.4% three-year CAGR) are expected to markedly outpace the wider digital sector. 

Social spend is also forecast to maintain double-digit growth (+12.8% three-year CAGR), assisted by the adoption of social commerce and the popularity of short-form video platforms like TikTok and Instagram Reels.

Key quote

“We still expect global advertising spend to grow despite the economic uncertainty. However, media price inflation is the true driver of this increase and hides the more lacklustre reality: 2023 will be a flat year for ad spend” – Peter Huijboom, Dentsu.

Sourced from Dentsu

WARC Creative Ideas that work: Combining creativity and media

How do brands navigate a fragmenting media and content landscape, and build ideas that can work across it? This report looks at the intersection of creativity and media using three award-winning case studies.

Context 

Media is one of the main levers that marketers can pull to generate effectiveness: the more channels you use, the more effective your campaign tends to be. But the mix of those channels, and how marketers use them, has in some cases become detached from the creativity, with creative agencies and media agencies working in silos. 

When planning for reach and brand recognition, the media framework into which brands place their creative is a vital part of the effectiveness equation - this report explores how the very best have put these ideas into practice.

Takeaways

• Channel mix: Leading brands effectively maximise the number of media channels in the mix; but the magic lies in the integration of those channels: how they work together to achieve campaign objectives.
• Partnership with influential allies is an effective way to extend a campaign’s reach and strengthen its credibility, particularly when the messaging is emotional or cause-focused.
• Participation: When consumers are an active part of a campaign’s story, their attention is kept for longer and memory encoding is stronger. The campaigns highlighted in this report reveal the gains achieved from participatory elements. 
• Distinction: Re-imagine the use of media to stand out from the crowd. These campaigns took traditional channels and innovated with them. Dove turned a billboard into a live stunt and Volkswagen turned a TV spot into the start of an online, gamified customer journey.
• Use media to be unmissable. Remember that media can be used multiple times, in different ways to reach different audiences. The case studies in this report show how multifaceted approaches within the same media channel can combat audience fragmentation. 

Ideas that work is a new series of reports exclusive to WARC Creative subscribers, read the first of these here. These include an analysis of a trend or theme using three award winning campaigns from the WARC Creative platform. More information is available here. 

New categories turn to children’s genre during India’s summer

Summer holidays mean children watching TV for longer than usual and that is attracting more of India’s advertisers to the kids’ genre.

Why it matters

Despite the attractions of digital platforms, TV remains the preferred visual medium for a majority of children in India. Consequently, children’s channels like Cartoon Network, POGO, Discovery Kids, Sony YAY! and Nickelodeon all develop new offerings for the summer period. And parental co-viewing attracts different advertising categories – with some coming just for the summer season, according to an industry executive speaking to e4m.

Takeaways

• 2022 research by Sony YAY! and Kantar found 57% of children surveyed preferred watching TV; just 10% watched only content on OTT, while 33% watched both. 
• Locally developed and local language content has been an important factor in boosting viewership in the children’s genre.
• Japanese anime is popular among young adults and children thanks to increased exposure to global and local content.
• With parents and children often watching together, brands in diverse categories are advertising on children’s channels, including: snacks, food and beverages, stationery, personal care, home care, and consumer durables.

Key quote 

“These are fascinating times we live in. Children nowadays are confident in expressing themselves and have clear preferences for the content they enjoy and want to see. They look for stories and conversations that are both relatable and engaging” – Uttam Pal Singh, South Asia, Head of Kids Cluster, Warner Bros Discovery.

Sourced from e4m

Mobile gaming experiences can be ‘premium’

Activision Blizzard Media, which owns gaming titles such as Call of Duty and Candy Crush, is on a mission to dispel the notion that mobile gaming constitutes a low-end platform for brand messaging.

It's yet another way that gaming companies continue to challenge advertiser stereotypes of the industry – one of the most notable being the perceived predominance of young, male gamers.

Premium by design

A new report – revealed at Advertising Week Europe in London – explores whether mobile games can be considered premium.

The company surveyed 2,000 mobile game players in the US to get their views. Unsurprisingly, given the nature of the audience, 73% said they consider mobile games to be high quality. Perhaps less expected was that more than two-thirds (69%)­ of PC and console gamers also perceive mobile games to be of a high standard.

Other findings include:

• Explicit factors determining a game as premium include being “stress reducing”, “thought-provoking” and “worth the price”. Implicit qualities prompted by premium mobile games are feelings of “fun”, “relaxing” and “competitive”.
• 61% of respondents said that high-quality graphics were important for a premium gaming experience, while 51% wanted to be challenged.
• Mobile gamers are more concerned with value for money: 54% said premium games must be free to play, versus 49% of gamers across all devices.
• 87% of those surveyed prefer mobile gaming ads to be “short”, while 78% prefer ads in game to be reward-based.

Why it matters

Gaming is at a tipping point which may bring it closer to mass media – perfectly exemplified by Activision Blizzard’s on/off acquisition by Microsoft. Brands understand that gaming reaches vast audiences, especially among younger consumers, but many remain hesitant to invest. For gaming media owners, a key challenge will be persuading marketers that their campaigns can be effective.

Key quote

“The bar for premium games is high but the payoff for brands is clear. Players have expectations for how they want experiences to look and feel, and brands should be committed to meeting them where they are. When they do, everyone wins” – Melinda Spence, Activision Blizzard Media.