Magazine publishers tap e-commerce revenue stream

E-commerce has become a vital third revenue stream for publishers alongside digital advertising and subscriptions; for Future plc, this is now its fastest-growing division.

Context 

A 2018 change to Google’s algorithm gave greater prominence in search results to shopping recommendations from “trusted” sites, a shift that opened up new opportunities for magazine publishers such as Future, Immediate Media and Bauer Media. 

Future spent two years building an in-house system that automatically adds links to products from sellers that the publisher has a revenue-share agreement with and is now reaping the benefits, the Financial Times reports.

Takeaways 

• Last year, Future plc grew commission from retail partners by 36% to £216m – more than a third of total revenues.
• Readers buy more than 43,000 items every day after clicking on links in articles written by Future journalists.
• Future is expanding its e-commerce operations into the US, last month launching Marie Claire Edit, which enables readers to browse styles recommended by the magazine’s editors and shop stores via a single site. 
• Rival Hearst is opening The Tower, an e-commerce marketplace made up of four individual stores with one cart, one platform and shared back-end technology from media brands Elle, Bazaar, Town & Country and Esquire, WWD reports.

Sourced from Financial Times, WWD [Image: Charisse Kenion on Unsplash]

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. 

Brands react to Roe vs Wade ruling

The recent ruling that abortion is no longer protected by the US constitution is having a knock-on effect on brands and businesses, which are having to reconsider everything from their employee health care offer to their data collection practices. 

What’s happening?

• Brands like Adidas, Nike and Disney are among dozens that have publicly said they will help staff get access to health care services now unavailable in their state, by covering travel expenses, for example. 
• But that option may not be open to smaller companies that buy employee health insurance from insurers that are subject to state regulations.
• Google has said it will delete users’ location history if they visit sensitive locations such as an abortion clinic – something law enforcement agenices could potentially seek to use in prosecutions.

Why it matters

The ruling inevitably drags businesses into a divisive political area where they are forced to make choices. Some, like Levi Strauss, have been vocal: “Protection of reproductive rights is a critical business issue impacting our workforce, our economy and progress toward gender and racial equity,” the company said. “Given what is at stake, business leaders need to make their voices heard.”

It also raises new questions about data privacy, and there have been calls for any debate between the tech companies and governments about data collection to be carried out in public, so that regular people and privacy advocates can have their say.

Meantime, if people start turning off the location tracking feature on their phones that will have an impact on some products offered by tech firms as well as limiting some advertising opportunities. 

Sourced from The New York Times, Google, Washington Post, The Independent 

Charity campaigns are too short-term

The effectiveness of charity campaigns has been declining, but research from the DMA and REaD Group suggests how marketers can use data-driven insight to reverse that trend.

Why it matters

A few years back, charity donations were hit by a wave of scandals in the sector, while charity marketing departments have had to subsequently deal with increased regulation, the impact of COVID, and the current cost-of-living crisis. In addition, given the proliferation of channels, they face tough choices on where to allocate limited media spend. Knowing where to put a charity’s money to ensure the continued growth of both their supporter base and the vital revenue they generate is crucial.

Takeaways

• The majority of charity campaigns are short-term in duration and so drive a short-term response.
• Long-term campaigns generate the most effects overall, but only 8% of charity campaigns run for the long term (i.e., for over a year); this is an area where charities could consider redressing the balance.
• Campaigns that employ three or more channels are more effective at generating brand, response and business effects than those running with one or two different media.

Is it time to appoint a chief media officer?

Three quarters of advertisers and agencies think large advertisers would enhance their media management capabilities with the appointment of a chief media officer, according to a new report from ID Comms.

Why it matters

The figure of 73% is based on a small sample (45 responses from Media, Marketing, and Procurement professionals with a range of global, regional and local market responsibilities) but it is significantly up on 2019’s 57%. As the media space becomes increasingly complex, a specialist position makes sense. 

It is also evident that an important function of a chief media officer will be to improve media capabilities. The 2022 Global Media Training Report notes a long-standing failure to upgrade investment in training despite unanimous agreement that investing in media training programmes can improve media decision making and deliver better business outcomes for advertisers.

Takeaways

• Advertisers with a chief media officer (either with or without the job title) are far more likely to hold media to higher levels of accountability by raising internal media capabilities within marketing teams.
• Seventy-nine percent of respondents rated their ability to ‘make media more accountable’ as unsatisfactory.
• Eighty-five percent of media and marketing professionals – though only 50% of advertiser procurement respondents – considered investment levels to be unsatisfactory and expressed clear concerns with current levels of investment in media capability building, both within their own organisation and across the industry as a whole. 
• The main reason identified for under-investment in media capability building was lack of budget, followed by an inability to find the right training opportunities and commit time to media training.
• Training in KPI setting is most likely to help resolve gaps in advertiser capability, cited by 57% of respondents. Media ROI (46%) and briefing and evaluating agency work (46%) also remain important areas for capability building. 
• The fastest-growing area of training is the demand for addressing capability gaps in Ad Tech and Mar Tech (42% in 2022 vs 26% in 2019). 
• Advertiser respondents highlighted a need for training in how media agencies work; in turn, half of agency respondents highlighted a need for improved advertiser capabilities in running media pitches. 

Key quote

“[There is] a clear opportunity for progressive advertisers to invest in robust media capability building programmes and boost the accountability of media as a significant driver of business growth” – Matt Gill, Senior Consultant at ID Comms.

Sourced from ID Comms

‘Lunch-flation’ shifts Korean purchasing habits

Korean convenience stores are seeing a sharp upturn in sales as Korean office-workers react to rapidly rising restaurant prices.

Context

Korean government figures show the price of restaurant dishes grew 7.4% in May, with prices for some of the most popular dishes growing even faster – galbitang (beef stew with rice) was up 12.2%, for example, while nengmyun (cold noodles) was up 8.1%, breaking a psychological barrier of 10,000 won in the process. 

Why it matters

Koreans take their lunch hour seriously and have generally resisted western ‘al desko’ eating habits, preferring to patronise local restaurants. But a recent survey found 96% of 1,004 office workers saying they now find lunch prices onerous; almost half of those said they were looking for ways to cut their lunch spending. There are opportunities that can be exploited by food brands and retailers. 

What’s happening

An option for those seeking to cut costs has been to turn to convenience stores which offer instant noodles, sandwiches, and gimbap (rice rolls) for around 6,000 won or less.

One convenience shop chain, GS25, posted more than 30% increases in sales of instant meals in January-May versus a year ago, according to Reuters, and has now launched a meal subscription service that offers price discounts and deliveries to offices.

Rivals have seen similar surges in demand, with one, Emart24, reporting a 50% jump in lunch-box sales in areas with a large number of office blocks. 

Key quote

“Real purchasing power is shrinking amid fierce inflation pressures, but people don’t want to cut down evening gatherings they just started, while on lunches they can” – Lee Seung-hoon, chief economist at Meritz Securities.

Sourced from Rappler

In-house and external agencies: The CMO view

Marketing leaders embraced more flexibility and open communication with their agencies as COVID forced a shake-up of business as usual; now, they are looking to continue the successful changes, especially as in-house agencies become more commonplace.

Why it matters

The COVID -19 pandemic forced a rethink of client-agency relationships, especially with regards to internal processes, approvals and quick creative turnarounds. Now, marketing leaders are looking to translate those lessons into how in-house and external agencies can work together.

As many large brands are setting up their own in-house agencies, the relationship with external partners will need to evolve again. With the amount of touchpoints that now need addressing 24/7, many brands simply need more headcount to hit the mark at the speed required.

Definition and collaboration

“I think that, when we’re working our best, the [internal and external] agencies are collaborating and making the ideas better,” said Michelle St Jacques, Chief Marketing Officer at brewer Molson Coors, at the Cannes Lions International Festival of Creativity.

“It allows us to get to more scale and more personalisation from a brand perspective. I see [the agencies] as being part of the same team, but just having different roles in that,” she said.

For David Rubin, Chief Marketing Officer at the New York Times, which only relatively recently hired external agency partners, it’s crucial that internal and agency partners have smooth communication to ensure everything gets done.

“There’s just so many assets and so many channels [that] it’s just not possible for one place to do it. Also, the planning of how you do that has become so short … for agencies to be able to make all those assets in that timeframe, there’s got to be help,” Rubin said.

How to avoid in-house vs external agency turf wars

1. Minimise competition: ensure both internal and external agencies have a clear area of work. For example, one develops the idea and one creates the content.
2. Don’t be afraid to offer open briefs to agency partners for different ideas that can tackle a similar problem.
3. Test and learn in the real world to start seeing what’s resonating with consumers.
   
4. Open communication and collaboration is essential for success.

Right product, right time: Ugg goes viral on TikTok

With the creator economy booming on the platforms that matter to Gen Z, more brands are looking to create a ‘viral moment’ or – even better – be part of an organic one.

According to Carole Diarra, Global VP Marketing at apparel brand Ugg, the alchemy of a viral moment is born from clearly communicating the brand’s values, being relevant with the right product at the right time … and a big dose of luck.

Why it matters

Organic viral moments on TikTok, Snapchat or Instagram are like gold dust for brands looking to connect with Gen Z consumers, who are immersed in social platforms but more cynical about direct advertising.

Right product, right time

“It’s [about] leaning into our consumers and our community of people that love the brand, and really being able to showcase the creativity that comes with the confidence of wearing Ugg,” Diarra said at the Cannes Lions International Festival of Creativity.

“There’s many ways to style the product and to enjoy the product. We saw this during COVID on TikTok. We introduced these fluffy slippers called ‘Fluff Yeah’. The pair of slippers became huge on TikTok and a cultural phenomenon,” she explained.

“People were at home and they wanted a way to express their creativity. They wanted a way to show that even though they’re on lockdown, they still have flavour … organically, we just saw so much interest and resurgence,” Diarra said.

Putting the product at the heart of a TikTok trend

The viral Ugg slippers helped to drive the ‘two mile’ trend on Tiktok, i.e., comfortable but fun fashion for trips within a two-mile radius of your house during COVID, Diarra explained.

“You want to be casual, you want to be comfortable. But you also want to look interesting enough for people to pay attention. The fact that we have products that you can easily flow from inside to outside really created a huge resurgence of brand and product interest.”

Strategic lessons from Cannes LIONS 2022

Beyond viewability and through to attention, a renewed focus on growth, and an adjustment to a difficult economy – a new report distils the insights and trends that WARC’s editorial team picked up during Cannes LIONS 2022.

Why it matters

The 10 strategic lessons cover a mix of what we were told, what was said on the WARC stage and what we heard on other stages. In this report, we look at what mattered and why it mattered.

Key points

• Sophistication: the industry is moving beyond viewability and top of mind awareness with more nuanced understandings of attention and memory formation.
• Growth: from the digital giants growing through alternative models, to sustainability as a systematic element of business performance, the industry is back to talking growth.
• Measurement: with recession on the horizon, marketers were focused on the platforms and techniques that could deliver results as retail media and ultra-premium streaming entered the advertising conversation.

Alibaba targets DaaS market with Lingyang

China tech giant Alibaba is eyeing up the data-as-a-service (DaaS) market with the creation of a new subsidiary, Lingyang Intelligent Service Company, which it says will offer “enterprise digital intelligence services”.

Why it matters

Lingyang, which will offer solutions to enterprises that were initially developed for Alibaba, could potentially compete with the likes of Microsoft, Oracle, SAP and others in the business intelligence space, TechRadar reports.

It’s a growing market: as the amount of data held by businesses expands, so too does the need for services to manage and analyse it. A recent report says the DaaS sector grew 47% last year and will grow at a CAGR of 39% between 2020 and 2025, bringing incremental growth of almost $30bn over that period.

What it will do

• Alibaba CEO Zhang Yong explained that Lingyang will undertake “the important task of transforming the digital capabilities accumulated by Alibaba Group in the fields of consumption into intelligent products and services”.
• That includes a focus on the customer perspective and help for enterprises in driving efficient decision-making and promoting growth through data intelligence in multi-platform operations.
• Peng Xinyu, CEO of the new entity, stressed that it is “not software-as-a-service (SaaS), but data-as-a-service (DaaS)” – most SaaS solutions are aimed at solving “single point problems” and “are limited to workflow transformation”, he said. 
• Lingyang’s five major product lines include Analysis Cloud, Marketing Cloud, Production and Sales Cloud, Customer Service Cloud and Development Cloud. 

Final thought 

Alibaba has more than one billion customers around the world, so already has plenty of data ready to leverage.

Sourced from TechRadar, Technavio

What next for China’s livestreaming sector?

When the Beijing government last week published a new code of conduct for livestreamers in China, it was the latest in a lengthening list of interventions in the digital ecosystem and one that will reshape a livestreaming sector that now accounts for around 15% of all internet retailing. 

The code includes a list of things livestreamers should and should not do and imposes a requirement for professional qualifications if they broadcast content of a specialist nature, such as medicine, law, education or financial advice.

Context 

The pandemic and lockdowns boosted what was an already growing sector. There are now millions of livestreamers and almost half the country’s online users have bought from them. 

The most popular livestreamers command huge followings and can shift mountains of product. Brands of all sorts have noted that reach and sales ability and have partnered with these livestreamers, who have earned huge sums of money in the process.

Why it matters

Being able to talk to a camera for hours on end is a particular skill, but these livestreamers generally lack sector or product knowledge which carries risks for brands – and consumers. Additionally, they have demanded commissions and discounts at a level that now makes little financial sense for brands. 

“These retail gatekeepers wielded too much power, hurting brands, consumers, e-commerce platforms and smaller influencers,” consultant Jacob Cooke wrote in the South China Morning Post. 

What may happen next

"One effect of the new guidelines will be healthier competition within the industry,” retired law professor Jason Yao told Shanghai Daily. “The law-abiding sites with good-quality content will prevail."

Cooke, meanwhile, expects live-streaming content to diversify over the coming year, not least as brands bypass influencers and invest more in self-produced live streams. “More consumers will buy more from these live streams, and live-stream sales as a portion of overall retail in China should continue to grow.” 

Sourced from South China Morning Post, Shanghai Daily, Global Times

Brand in action: How Zero Waste Malaysia champions climate literacy

Consumers and corporations need to increase climate literacy and brands need to take up opportunities to work with advocacy groups, Zero Waste Malaysia’s Sue Yee Khor tells WARC.

Key insights

• Overcoming the language barrier and translating technical terms are the biggest challenge in a multiracial country like Malaysia with a diverse group of people.
• The aim is not total zero waste, a concept that alarms businesses and consumers alike: humans are bound to consume, so zero is just the goal.
• Equip employees with basic sustainability knowledge so that when they become managers, they know how to make decisions not just for profit but also for the environment.

Key quote

“Things that really scare people seem to be what works for our crowd, probably because a lot of them want a reality check. So we try and come in from a perspective where we also tell them how they can do better” – Sue Yee Khor, co-founder of non-profit organisation Zero Waste Malaysia.

Wellbeing sentiment shifts towards 'betterment'

Ongoing research from Horizon Media’s WHY Group has uncovered an evolution in wellness to the concept of betterment, which concerns how people actively approach all aspects of wellbeing.

Why it matters

For brands, understanding how consumers approach their wellbeing is central to being able to respond to this core part of how people go about their lives.

Takeaways

• People’s betterment needs shift constantly based on how they manage their natural energy rhythms, and feelings of control over those rhythms affect the choices people make, with some people feeling In-Sync and others feeling Out-of-Sync.
• Constant fluctuations in bandwidth for taking on life’s challenges have been exacerbated during the pandemic.
• How much control people feel over their energy state dictates their betterment behaviors; when brands understand this, they can connect with consumers in ways that can lead to adoption and a stronger, more emotionally-based connection.

The big idea

Brands can benefit from knowing the relevant complexities and nuances of their audiences’ energy states by understanding how they are, how in control they are feeling, and by offering ways to help.

Rainbow Shops is using SMS for effective brand personalization

SMS (short message service) can serve as effective personalization with customers while remaining in accordance with digital privacy laws, according to a presentation by women’s retail brand Rainbow Shops at CommerceNext 2022.

Why it matters

In an increasingly privacy-focused online advertising sphere, SMS has emerged as a viable channel for communicating with customers directly, building brand loyalty, and serving as a space to further understand customers’ individual needs.

Tone is essential

• SMS messages should comply with the more conversational tone associated with texting, according to David Cost, vp/e-commerce and marketing at Rainbow Shops, in a presentation titled “Preparing Your Tech Stack for the Era of Conversational Commerce”.
• Cost says consumers often respond to automated SMS messages as if they are speaking with a live sales representative. As such, brands should endeavor to meet consumers at their level, by adopting a more conversational tone in their messaging, and straying away from generic promotional scripts.
• For example, using customers’ first names and avoiding long expository paragraphs is key.

Takeaways

• In 2022, roughly 70% of marketers are using SMS for “retention and re-engagement,” a ten percentage point increase from 2021, said Elizabeth Ray, vp/client strategy at SMS platform Attentive. Ray also reported that customers spend, on average, 50% more when directed from SMS.
• SMS should be used as a tool for precise personalization – not, as Cost phrases it, “false personalization,” or messaging that gets customers’ individual attributes wrong, thus targeting them ineffectively. “If we have a plus-sized customer and we send her junior-sized messaging, that’s a loss,” he said. “We’re gonna lose her.”
• Brands can acquire first-person data by asking consumers direct questions over SMS about the products and services they are looking for. This will ensure targeting accuracy later in the sales journey.
• SMS messaging can also be used to guide customers along the purchase funnel – if they have items waiting in checkout, a message might be the difference between inertia and action.

The big idea

“Clearly we need to pick up on those daily touchpoints that are happening,” said Cost of the everyday occurrence of SMS messaging among consumers.