Korea's demographic timebomb

South Koreans are increasingly likely to live alone and to remain unmarried as they get older, according to government data. 

By the numbers

• Some 9.37 million households, 40% of the total, are single-person, The Chosunilbo reports (two-person households account for 24%, three persons 17% and four or more 19%).
• The number of one-person households has increased by 1.92 million over the past five years.
• The fastest growth has come among those in their 20s, up 61% to 1.47 million; one in five twenty-somethings now lives alone.
• Forty-two percent of Koreans in their 30s are not married (up from 36% in 2016), according to census data cited by Yonhap. 

 Why it matters

 A government minister has spoken of the need “to design policies to suit the lifestyle of singles, which affects a wide spectrum of society, the economy and culture”. Brands too will have to design products and services that take account of changing household configurations and lifestyles.

 Sourced from The Chosunilbo, Yonhap

Five key priorities for delivering effective advertising

WARC today releases ‘Anatomy of Effectiveness: 2022 Edition’, a white paper giving brand marketers, advertising agencies and media owners a fresh perspective on the five key building blocks of effectiveness.

Why it matters

Much has changed since WARC published the first Anatomy of Effectiveness in 2019, David Tiltman, SVP Content, WARC, observes: “We’ve had a pandemic that saw budgets switch out of brand investment into performance marketing; we’ve seen the rise of ‘retail media’ platforms that are reshaping the media landscape; and with the impending death of the cookie we see a growing lack of confidence in advertising and media measurement.

“This updated edition of our white paper draws on new thinking and the latest evidence to present the key building blocks required to deliver commercial impact today.”

Five priorities

• Invest for growth

Understanding how factors such as brand size, campaign investment and category dynamics will determine effectiveness are key first steps when it comes to setting budgets and agreeing on objectives. Getting the right framework for investment is crucial if a campaign is to meet its potential.

• Balance your spend

Set the right framework for investment to ensure sustainable success. Whether it is long-term effects vs short-term sales impact, brand-building vs performance marketing, broad reach vs active in-market buyers or upper funnel vs lower-funnel, plan for effectiveness across different timeframes, messaging, audience types and buyer journeys to deliver maximum growth.

• Plan for reach

Campaign reach is becoming harder to achieve as media consumption fragments. This is forcing marketers to reconsider long-held assumptions about reach and frequency management. Factors to be considered include brand objectives, media selection and consumer purchase habits.

• Be creative

Creativity makes a difference and is the most powerful weapon under the marketer’s control. There is widespread evidence that creativity delivers increased effectiveness when it is distinctive, engaging, emotional and has some longevity. Recent research cited in LIONS’ State of Creativity 2022 study claims only 8% of agencies feel confident in convincing clients to invest in high-quality creativity and 12% of clients feel confident in convincing the CFO to invest in high quality creative.

• Plan for recognition

Advertising must be associated with the brand behind it, if it is to work. Planning for recognition involves creating shortcuts in consumers’ minds that make brands more memorable, impactful and easy to recall. Failure to brand communications properly is a common pitfall. Investing in and nurturing distinctive assets will enable quick recognition.

The white paper, launched in conjunction with WARC's Anatomy of Effectiveness hub, features new case studies, expert opinions and over 20 'Evidence' decks. WARC clients can read the full report here. A sample edition is available for all.

Highlights from the white paper will be presented to Cannes Lions attendees today as part of a full week’s worth of content curated by WARC, together with the world’s leading effectiveness experts, covering strategy, media, creative and digital commerce. For more details on WARC x Cannes Lions, click here. 

IPL ecosystem faces shake-up

A combination of inflated media rights and falling ratings means that advertisers will be taking a long, hard look at their ROI from different media at next year’s India Premier League. 

Why it matters

Broadcast rights for the next period were sold for more than three times the previous deal, which is inevitably going to result in higher ad rates. Would-be advertisers will have to make hard choices between appearing on TV or on digital or sponsoring teams.

At the same time viewership declined by 30% or more for the initial stages of this year’s event (although that may be related to the easing of COVID restrictions), meaning that advertisers are re-evaluating potential reach. “While not all advertisers necessarily come to IPL only for the ratings and they are not the entire game, they are still very important,” Madison Media CEO Vikram Sakhuja told The Economic Times.

Takeaways 

• Ad rates could increase up to 10% for TV and 30% for digital.
• Startups accounted for more than half of the IPL’s advertisers in the past two seasons but their funding is drying up – a concern for broadcast rights holders.
  

Final thought

The IPL media rights auction saw the value of digital rights exceed TV broadcast rights for the first time. “IPL media rights is a case study for the entire world to understand where the OTT industry is going,” Jean Francois Pigeon, Global EVP & Head of Sales-Marketing at Synamedia, told e4m.

Sourced from Economic Times, e4m

Cracking the code of creative effectiveness

The ANA, WARC, and LIONS have announced a unique long-term research partnership to create a global framework that guides and supports brands in ‘Cracking the Code of Creative Effectiveness’. 

Why it matters

The initial goal of this project is to address both the culture of effectiveness within organizations as well as the elements of campaign effectiveness. Other fundamentals of effectiveness, aligned with the ANA Global Growth agenda’s Brand, Creativity & Media pillar, will be incorporated into the creation of the roadmap and foundation for the practice.

What’s happening

• Over the course of the next twelve months, this partnership will work together, using insights from the ANA, WARC & LIONS, and leveraging work from award-winning marketers, to create a framework that CMOs and brands can follow to establish a culture of both effectiveness and creative excellence leading to long term success for their businesses. 
• As part of the partnership, the ANA and WARC will conduct an extensive worldwide qualitative study among CMOs to identify the elements of a culture of effectiveness and jumpstart the industry in moving towards more effective marketing. The study will build on the existing Creative Effectiveness Ladder, developed by WARC and LIONS, a framework to understand how to utilize creativity to drive specific marketing outcomes.
• To kick-start the project, on-stage interviews were conducted at last week’s Cannes Lions International Festival of Creativity. Further insights will be presented at the ANA Masters of Marketing conference 25-28 October 2022.

Key quote

“The aim of this partnership is to drive a culture of effectiveness in our industry. WARC’s vast knowledge base, proprietary data and extensive experience in marketing effectiveness, combined with the ANA’s work with their Global CMO Growth Council in partnership with LIONS, will help accelerate the practice of effectiveness” – Paul Coxhill, CEO of WARC.

For further information or for any CMOs wanting to get involved, please go to www.warc.com/ana. 

CEOs think CMOs can do better

The majority of US chief marketing officers receive a “B” grade from chief executives with regards to their overall performance, a study* finds, with many needing to improve in terms of thinking big and understanding corporate finances.

Overall performance scores

• Chief executives were asked to rate their CMOs on a similar spectrum to that used in the academic world, with “A” grades being the best and “D” the worst.
• Only 16% of respondents gave their marketing lead an “A” grade for overall performance, while 55% scored a “B”, 23% got a “C” and 6% received a “D”.
• Similarly, just 16% of CMOs were afforded an “A” grade for their ability to drive company growth, while “41%” received a “B”.

Areas for improvement

• Exactly 25% of CEOs regarded marketing heads as possessing “above-average” skills when it comes to decision-making.
• Another 51% suggested that their CMO “plays safe” and avoids risk, whereas 27% thought marketers “play big” and inspire other members of the C-suite.
• While 53% of chief executives agreed their chief marketer understood profit-and-loss statements and balance sheets, 47% did not have this confidence.
• Just 49% of CEOs concurred with the statement that the CMO “is on my side [and] I trust them,” the study found.

*The study was conducted by Boathouse, a full-service agency based in Boston. Its chief executive (CEO) panel was made up of 150 corporate leaders from enterprises in the United States. The sample was evenly split between three cohorts in terms of annual company revenue: companies earning between $250m and $500m ; from $500 m to less than $1bn; and over $1bn.

Sourced from Boathouse

How Clorox thinks about purpose

Brand purpose has often been presented as being “much more fancy than it actually is”, according to Linda Rendle, chief executive of The Clorox Company, the consumer packaged goods manufacturer.

How Clorox defines brand purpose

• Speaking at the dbAccess Global Consumer Conference 2022, Rendle outlined how Clorox thinks about this issue.
• “Purpose is about knowing your stakeholders and then acting in a way that's consistent with what’s important to them and that drives why you do what you do,” she said.
  
• Based on this thinking, Clorox has developed its own clear set of objectives. “For us, [our] purpose is: We want to put people at the center of everything we do. We champion people to be well and thrive.
  “And in order for people to live a good life, we have to have a healthy planet. We have to have a healthy social structure. And so we make choices consistent with our brands to do that.”

Turning theory into practice

• Sustainability is a critical element of its strategy, such as reducing its use of original-use plastic and fiber packaging by 50 by 2030%.
• The company has also committed to achieving net-zero carbon emissions by 2050, a goal benefitting the planet and letting consumers act in accordance with the values.
• “That is an important way that we create value for the people that we serve. To give them options to be more responsible: that’s important to them,” Rendle said.
  
• Improving the quality of life by making more effective products is another aspect of its approach, as tasks like household clearing are “not the most joyous thing to do”, she added.
• “So the way you create value is you make it easier for people. You make it a better experience,” Rendle said.
  

The big idea

“That’s all purpose is to us. It’s really about being as human-centered and people-centered as possible, and then knowing that’s how we create value over the long-term by meeting those people where they are” – Linda Rendle, CEO, The Clorox Company.

P&G’s three principles for creative marketing

Procter & Gamble, the consumer packaged goods manufacturer, is tapping into creative principles based on human connection, product performance and diverse partnerships as it seeks to drive growth.

Why it matters

Growth is the superpower of the creative industries, according to Marc Pritchard, P&G’s chief brand officer. Speaking at the Cannes Lions International Festival of Creativity 2022, he set up three principles for defending adspend, creating business growth and attempting to make a difference to society, not only as part of brand purpose, but across the marketing ecosystem itself.

The three principles

• Creativity must feel personal and talk about people’s lives, reflecting their reality and making their day a little better. “It touches people,” Pritchard said. “You can make them laugh, cry, act – and, of course, buy.” (WARC subscribers can read more here.)
• Communicating product performance and superiority matters for driving growth at a time of growing competition. “Performance matters. There’s a job to be done and a problem to solve,” said Pritchard. “We need to convey what that everyday product is, what it does, how to use it, why it’s better – and do so in a way that is useful and interesting.”
  
• The third creative principle for P&G is to build trusted creative partnerships – and to make sure these efforts reflect the diversity of the audience it is hoping to reach.

The big idea

“It’s creativity that makes markets bigger; that inspires innovation to attract more people to markets; that advances economic inclusion, where more people benefit through higher incomes, increased wealth, and more purchasing power” – Marc Pritchard, chief brand officer, P&G.

Brand in action: How Thread to Fabric champions the ethics of sustainability in SE Asia

Can brands effectively address climate change without also tackling other social impact issues in their sustainability strategy? WARC speaks to Jakarta-based Felicity Pascoe – senior gender equality, disability and social inclusion advisor – about this interplay and how to onboard more conscious consumers in Indonesia.

Why it matters

The issues of social impact and environmental impact are different but they are interlinked and mutually supportive. Brands need to look more holistically at their sustainability strategy.

Insights

• The sustainability movement is aligning with a broader movement in Indonesia towards fitness, health and wellness.
• Brands need to understand the social impact of climate change and how it worsens social inequality.
• For a brand’s sustainability strategy to be environmentally friendly and ethical, it must ensure fair pay and fair work.

Key quote

“Authentic sustainable brands that are profitable are a clear indication there is a conscious consumer market we need to be catering for” – Felicity Pascoe – senior gender equality, disability and social inclusion advisor and founder of kids clothing brand Thread To Fabric.

Employee comms becomes a CMO priority

Communicating with a brand’s employees has long been relegated to corporate newsletters or town hall meetings, but CMOs are increasingly looking to their own employees for inspiration as the brand values become more of a recruitment consideration.

Why it matters

Increasingly, marketers need to work with other functions within the organisation – such as human resources – to further the aims of the whole business.

“This is a key area where brand can play in terms of attracting future talent,” said Ty Heath, Director, Market Engagement, The B2B Institute at LinkedIn, following her presentation at the Cannes Lions International Festival of Creativity. “People see how powerful your brand is and want to work for your brand, which lowers your cost to have them join and helps them stay at your company much longer. 

“All in all, it’s something marketing can bring to an organisation in partnership with the human resources team,” she said. 

What CMOs are saying on the Croisette

“By opening up meetings to 300-400 people – optionally – for full transparency, authenticity [becomes] our internal medium and agenda….it increases employee engagement, their perception of being part of it and being able to contribute to discussions” – Attila Cansun, CMO, No7 Beauty Company.

“The question you always have to ask yourself as an employee is: do the organisation which I work for and my values align to each other? And sometimes they don’t. If they don’t, that’s okay, you can pivot out. For us, it’s about always having conversations” – Sandra Lopez, CMO, Microsoft Advertising.

“In a world where consumer expectations and employee expectations are constantly changing … you’ve got to move with it, you can’t just sit there and be upset that they did” – Lindsay Radkoski, VP - National Marketing, Wendy’s USA.

“There’s one more stakeholder not to be forgotten: HR. We are in the deepest war for talent ... So where’s our position? How do we stay attractive?” – Christian Deuringer, Head of Global Brand Communications, Allianz.

Ads in a relevant context boost favourablity and intent metrics

Increased consumer attention for contextually relevant ads leads to greater purchase intent and brand favourability, new research from Integral Ad Science shows.

Why it matters

With a cookieless future on the horizon, marketers are seeking alternatives to maintain and improve their advertising ROI. The Ad Context & Attention study from IAS, using eye tracking technology from Tobii, highlights the role that context may play in this regard.

Takeaways 

• Contextual targeting strategies yield stronger consumer attention: The in-context ad was the first page element consumers noticed. It took just 0.4 seconds for consumers to notice the in-context ad vs. 1.0 seconds to notice the out-of-context ad when viewing the article. 
• Contextually relevant ads boost brand favourability and consumer purchase intent: Purchase intent was 14% higher among consumers who viewed the in-context ad. This ad also generated a 5% higher brand favourability compared to the out-of-context ad. 
• In-context ads generate higher memorability and increase brand recall and awareness: Consumers were four times more likely to remember a brand, unaided, after seeing an in-context ad versus an out-of-context ad. In general, in-context display ads were more likely to be considered interesting, easy to read, clear and informative.

Key quote

“Desired outcomes can be significantly influenced through contextually relevant ad placements. There is a massive opportunity for brands … to amp up the power of their campaigns and affect the bottom line ” – Tony Marlow, CMO, IAS. 

Sourced from IAS

Luxury experts hope for downturn not recession

An “economic slowdown”, driven by volatile factors like the war in Ukraine, is forecast by 59% of luxury experts in a recent survey to lead to a downturn in the industry, compared with 41% who think a full-blown luxury recession is coming.

Why it matters

Periods of financial stress cause many people to choose not to make bigger-ticket purchases. And even affluent shoppers often decide against conspicuous consumption when the economy is facing tough times. Luxury brands must find the right equation to serve their target audience while providing a level of indulgence for active category buyers.

Takeaways

• Though spending on necessities such as food, housing, and technology is projected to remain steady through economic crises, the luxury industry could see significant effects. This was according to a survey conducted by the research firm the Luxury Institute of its Global Luxury Expert Network (GLEN) members, a group of industry leaders around the globe, including chief executives, senior executives, consultants and industry  experts.
• A luxury downturn or recession will have differing effects on separate luxury sectors. For example, watches and jewelry are expected to take a medium hit in the event of either scenario, and luxury real estate is in a precarious spot as well, for most demographics excepting the highly affluent.
• In contrast, wines and spirits, beauty and health and wellness are all categories that experts predict will face minor hits during a downturn or recession, given their increasing value as necessities for millennial and Gen Z consumers.
• Experts view department stores as the most vulnerable institutions operating in the luxury category, due to their “historically high overheads, high inventories, and low margins”.
• A potential recession could have particularly outsized effects in Europe, given the pressure placed on commerce by the war in Ukraine. In North America, the effects will presumably be less, but still felt.

The big idea

“Downturns and recessions spawn major opportunities. This may be the worst of times; if you act with courage, skill, and conviction, you can make it the best of times” – Milton Pedraza, CEO of the Luxury Institute.

Sourced from Luxury Institute

'Creative data' can improve ad effectiveness

Artificial Intelligence (AI) can help brands understand “creative data” at scale, and so identify the shared traits of their most impactful ads.

Why it matters

“Creative data” is a new frontier for brands that are seeking to maximise the impact of their communications. Through assessing a sizable volume of ads, artificial intelligence can unlock insights regarding the precise creative elements that are most associated with success.

Takeaways

Anastasia Leng, CEO of CreativeX, a firm that deploys AI to assist brands in enhancing their ads, discussed this topic in a session held by WARC at the Cannes Lions International Festival of Creativity 2022:

• AI software can analyse the content of huge numbers of ads at a granular level – say, logo placement, music use and diverse representation in casting – and help brands delineate the granular features of their communications output. (WARC subscribers can read more here.)
• At the micro level, she explained, this “creative data” reveals numerous tiny details about an ad – information, Leng conceded, that is of limited worth in isolation.
• Undertaking such an investigation at scale, however, yields significant insights, and can help develop automated tools for brands to quickly determine if their creative has the desired traits.
• Major advertisers like consumer goods firms Nestlé and Unilever, as well as brewers Heineken and Anheuser-Busch InBev, have leveraged this approach and yielded significant results.

The big idea

“Creative data is basically an untapped asset class. We all have it – we all have a ton of it. We sit on it. And it’s ours. But we haven’t been able to actually harness it and cluster it” – Anastasia Leng, CEO, CreativeX.

UK consumers are grappling with a stark new economic reality

The worries of UK consumers are laid bare in two new pieces of research that show consumer confidence hitting an all-time low for the second month in a row and almost one third of people fearing their personal or household financial situation isn’t secure.

The consumer mood is dark

A year ago, GfK’s long-running Consumer Confidence Index stood at -9; today it’s at -41. Joe Staton, Client Strategy Director at the market research company observed that “With prices rising faster than wages, and the prospect of strikes and spiralling inflation causing a summer of discontent, many will be surprised that the index has not dropped further”.

Spending is being cut

Inflation (as measured by the Consumer Prices Index) hit 9.1% in May, up from 5.5% in January. So it’s little surprise that data from audience insights company GWI shows 90% of UK consumers feel the cost of living is more expensive compared to six months ago.

A majority (62%) have felt a moderate/dramatic impact from inflation, while, more alarmingly, 30% say they are feeling insecure about their finances. 

Rising costs are being noticed by higher and lower earners alike, GWI notes, with 34% of higher earners and 47% of people in lower wage brackets saying they’re cutting back on spending. 

For some, that involves making lifestyle changes: 52% are using less energy in the home, 44% are walking and cycling more, 41% are preparing meals at home as eating out and takeaways are scrapped.

Why it matters

While everyone is conscious of the changing economic climate, many may feel that they are not yet at a crunch point regarding their own finances, says Jason Mander, Chief Research Officer at GWI. But “the consumer dilemma is starting to make itself known and there are choices being made throughout the purchase cycle, even for those who are feeling relatively comfortable”.

Brands need to monitor the situation closely as it develops and understand the daily choices that consumers are having to make.

Key quote

“Britain faces a stark new economic reality and history shows that consumers will not hesitate to retrench and tighten their purse strings when the going gets tough” – Joe Staton, Client Strategy Director, GfK.

Sourced from GfK, GWI, ONS

Winners announced for WARC Awards for Effectiveness 2022

In Cannes last night, a total of eight Grands Prix were awarded at the second global WARC Awards for Effectiveness, in association with LIONS, 

Among the agencies receiving the top accolade were Colenso BBDO Auckland, FCB New York, Havas Business London, Leo Burnett Beirut, McCann Paris, MediaCom Singapore, Ogilvy Frankfurt, and Publicis New York.

Brands honoured included ABAAD, Deutsche Bahn, Jif, Maersk, Michelob Ultra, SK-II, Skinny, and The Lebanese Breast Cancer Foundation. 

Winners include five global campaigns and six regional (Asia x1, Europe x1, MEA x2, North America x2). US campaigns picked up the highest number of awards (x9). Australia, India, Lebanon, New Zealand and Saudi Arabia each won two awards. Belgium, Brazil, Canada, China, Egypt and Greater China have picked up one award. 

In all there were 36 winners across the six categories that make up the WARC Awards for Effectiveness, rigorously judged using the Creative Effectiveness and the B2B Effectiveness Ladders, unique tools providing a consistent approach and global language to benchmark effectiveness.

Read the full list of winners or watch the The Effectiveness Show, which includes interviews with jurors and winners. 

Category highlights

Customer Experience category

• Three awards: 1 Grand Prix, 1 Silver, 1 Bronze
• Winning agencies: FCB New York, Leo Burnett Beirut, Mindshare Shanghai

The Grand Prix was awarded to FCB New York for Michelob Ultra. The beer brand grew sales by digitally transporting basketball fans to the court during the NBA games in the USA. 

Business-to-Business category 

• Five awards: 1 Grand Prix, 1 Gold, 2 Silver, 1 Bronze
• Winning agencies: Havas Business London, Stein IAS New York, Mindshare Shanghai/Dentsu Beijing, FCB New York, DDB Mudra Mumbai

The Grand Prix was awarded to Havas Business London for Maersk. The shipping and logistics provider shifted the conversation from risk to opportunity with its global campaign to produce extraordinary results for the company.

Collaboration & Culture category 

• Seven awards: 1 Grand Prix, 1 Grand Prix for Good, 1 Gold, 1 Silver, 3 Bronze
• Winning agencies: Publicis New York, McCann Paris, 360i New York, Mischief @ No Fixed Address New York, Wieden & Kennedy New York, In house - Government Of United Arab Emirates, Energy BBDO Chicago

The Grand Prix was awarded to Publicis New York for Jif. The US campaign saw the peanut butter brand partner with rap legend Ludacris to improve category share, brand perception, increase share of voice and brand searches.

The Grand Prix for Good was awarded to McCann Paris for The Lebanese Breast Cancer Foundation. Reaching two million people, the non-profit partnered with a traditional Lebanese baker and a gynaecologist to increase awareness of self-examination, 

Instant Impact category 

• Ten awards: 1 Grand Prix, 2 Gold, 2 Silver, 5 Bronze
• Winning agencies: Ogilvy Frankfurt, VMLY&R Melbourne, Alma Miami, McCann New York, Leo Burnett Chicago, Sunset DDB São Paulo, The Monkeys Sydney, Impact BBDO Dubai, FP7 McCann Cairo, Leo Burnett Chicago

The Grand Prix was awarded to Ogilvy Frankfurt for Deutsche Bahn. The rail operator collaborated with state tourism associations and motivated Germans to holiday in Germany and get there by train during COVID-19.

Sustained Growth category 

• Six awards: 1 Grand Prix, 1 Grand Prix for Good, 2 Gold, 1 Silver, 1 Bronze
• Winning agencies: Colenso BBDO Auckland, Leo Burnett Beirut, Havas New York, LDV United Antwerp, The Script Room, DDB Aotearoa Auckland

The Grand Prix was awarded to Colenso BBDO Auckland for Skinny. The mobile operator used a multichannel campaign based on local people with famous names to relaunch its brand and grew credibility, consideration and sales in New Zealand.

The Grand Prix for Good was awarded to Leo Burnett Beirut for ABAAD (Dimensions) – Resource Center for Gender Equality. The NGO for women’s rights saw increased calls to its helpline and won breakthrough law reforms to protect women and girls in Lebanon with on-ground activities and online influencer and celebrity videos.

Brand Purpose category 

• Five awards: 1 Grand Prix, 1 Gold, 1 Silver, 2 Bronze
• Winning agencies: MediaCom Singapore, Havas Turkey, Impact BBDO Dubai, AMV BBDO London, Zulu Alpha Kilo Toronto

The Grand Prix was awarded to MediaCom Singapore for SK-II. The skincare brand, perceived as one for older women, launched a global campaign to increase brand awareness, and grow search and consideration, leading to new users and sales.

Read the full list of winners or watch the The Effectiveness Show, which includes interviews with jurors and winners. 

Netflix Co-CEO sketches advertising principles, holds back on detail

Any advertising product that Netflix comes up with will start in the US, will stay light, and will just be one of many iterations, according to co-CEO and chief content officer Ted Sarandos. The principles arrive at a time that certain advertising service providers are being touted as launch partners.

Why it matters

Co-CEO Reed Hastings has long resisted advertising, but with investor demands for growth becoming louder, the company now recognises that it has “left a big segment on the table”. And with the monthly fee becoming too much for some people during a cost-of-living crisis, there is now space for an advertising tier.

Speaking on stage at the Cannes Lions International Festival of Creativity, Sarandos stressed that any product would aim to be more integrated and less interruptive than the current TV ad experience. “I want our product to be better than TV,” he stated.

Signals in the noise

Sarandos was grilled on his firm’s stock performance (macroeconomic issues, he said) and streaming more widely before questioning turned to the elephant in the room.

• When: That the timing of the festival was “a bit off” relative to Netflix’s ad plans suggests we won’t have to wait long for more details. In Sarandos’ own words, we hear these will be available “sooner than later.”
• Who: A story in the Wall Street Journal suggested that Google and NBCUniversal were the frontrunners to take on the work. Sarandos was, of course, equivocal, saying the business was prioritising a “pretty easy entry to market” but that it was “talking to all of them”.
• Looking ahead: More interesting was his suggestion that if advertising “becomes important for us” then the company would consider building out its own ad systems.
• Aims: “What we do at first will not be representative of what the product will be ultimately,” he explained. Netflix will start light and “keep it simple”.

Why now?

It comes down to a mixture of economic imperatives and the belief that the audience-matching capability that has become a hallmark of the Netflix experience, along with its creative chops, can help fuel a compelling product. There’s also the fact that younger viewers, accustomed to ads on social apps and YouTube, are simply more tolerant of advertising, especially when it’s done well.

A question of sport

Will Netflix do news? Sarandos was firm that there is no real ambition within Netflix to get involved here. Sport, however, is “not a foregone conclusion”, but, to date, its involvement in sports through sport documentaries is more comfortable territory.

Reporting by S.P.T.

Creativity matters in healthcare

The urgency of the COVID pandemic put healthcare brands in the spotlight and allowed them to lean into creativity at a pivotal time, according to Patricia Corsi, chief marketing officer at Bayer, the consumer healthcare giant. 

Why it matters

Healthcare marketing has often been stereotyped as dull – largely due to the many advertising regulations brands face in the category – but creativity still has the power to level-up marketing effectiveness even in regulated categories. 

“We have many bad things that happened with COVID but one good thing that happened is that it was a wake up call for the creative industry – and us as clients – to see the role that we really have to play,” Corsi said in a discussion at the Cannes Lions International Festival of Creativity (Bayer is the Jury Chair of the Health and Wellness Lions). 

Bayer is encouraging healthcare marketers to break out of conservative mindsets, which often come from a fear of risk. “It’s not easy,” Corsi acknowledged, but added that “without pressure, there are no diamonds”.

Insights

• Breaking taboos and having conversations to help people to live healthier lives are really important. 
• Success in healthcare marketing requires building coalitions and partnerships, while still competing to grow the brand.
• Instinct matters. There’s no need for ad testing – prioritise ideas that solve problems. 
• Build a marketing excellence team focused on creativity. 

Key quote

“I truly believe we cannot solve the biggest problems without creativity. But I don’t think they have to be complicated. It’s sometimes the simplest idea that is the best…. Let’s have the courage to take that first step” – Patricia Corsi, chief marketing officer at Bayer.

Seven in ten ad campaigns fail to generate meaningful ROI

Seventy percent of ad campaigns generate a return on investment (ROI) that calls their profitability into question, according to research presented at the Cannes Lions International Festival of Creativity 2022.

That finding came from a study incorporating 343 campaigns, accounting for £5bn in adspend, in the Advertising Research Community (ARC) database, an effectiveness resource developed by Dr. Grace Kite, the founder of UK-based analytics consultancy Magic Numbers.

About the research

• All the featured campaigns have been subject to econometric modeling to assess the drivers of their ROI, whether good or bad.
• The ARC database also mixes award-winning programs with initiatives which have not received such honours.
• As such, it represents “everyday” work alongside the best-in-class output that is put forward to compete for industry-level recognition.

A “concerning” trend

• In all, seven in ten of the ARC campaigns returned less than £2 in revenue for every £1 spent. (WARC subscribers can read more here.)
• This is a “concerning” figure, reported Stuart Heppenstall, principal consultant at marketing effectiveness consultancy Data2Decisions, who presented the findings.
• “Marketing often is paid for out [of] profits, and has to show that it can pay for itself,” Heppenstall said in a session held by WARC, entitled “Creative Commitment: New Learning from the ARC Database”, at Cannes Lions.

ABInBev and FCB take Creative Effectiveness Grand Prix

A long-running campaign for the beer brand Michelob Ultra has won the top gong at Cannes in the creative effectiveness category, where campaigns that have already been creatively awarded compete on the business impact the work has had.

The winning campaign

Michelob Ultra, along with FCB agencies in Chicago and New York, needed to grow volume sales for the organic beer brand. That meant not only recruiting more drinkers to shift their preference to organic beer, but also helping farmers shift their practices to organic, not a simple exercise in the context of US agriculture. 

The brand not only committed to be the first customers of those farmers willing to make the three–year transition to organic, but agreed to pay a 25% premium for their non-organic crops during the transition period (for use in other brands of beer) so they didn’t lose money. 

Why it matters

Judges praised the “game-changing” campaign, jury chair Raja Rajamannar told reporters ahead of the announcement at a ceremony last night. In particular, they expressed admiration for the brand’s commitment and lasting impact, which comes on top of the kinds of commercial and social impact that have been the hallmarks of top awards in recent years.

Rajamannar explained that a significant part of the discussion among the jury centred on the definition of effectiveness/ They they concluded that it must have:

• a lasting impact on sales;

• an impact on the business;
• an impact on the brand’s reputation;
• a competitive advantage for future growth.

Golds

Gold-awarded campaigns also reflected these precepts, even if the difference between the top award and the next best was nailing a difficult set of demands.

• Burger King: Moldy Whopper, by INGO Stockholm, DAVID Miami, Publicis Romania
• The Female Company: The Tampon book, by Scholz & Friends
• Dove: Courage is Beautiful, by Ogilvy London
• Canadian Down Syndrome Society: Project Understood, by FCB Canada
• Association L’Enfant Bleu: Undercover Avatar, by Havas Play

Silvers

• Cheetos: Can’t Touch This, by Goodby Silverstein & Partners 
• Three: The Island, by Boys & Girls (Dublin)
• Michelob Ultra: Michelob Ultra Courtside, by FCB New York

Bronzes

• Renault: Village Electrique, by Publicis Conseil
• McDonald’s: The Travis Scott Meal, by Wieden+Kennedy New York
• Propuesta Civica: #StillSpeakingUp, by Publicis Mexico 
• Canadian Women’s Foundation: Signal For Help, by Juniper Park\TBWA
• Johnson & Johnson: Stayfree Project Free Period, by DDB Mudra 
• Corona: The Match of Ages, by We Believers

WARC subscribers can click here to read the Grand Prix and all the winning case studies .