Poor briefs erode marketing budgets

As much as one third of marketing budgets could be wasted due to poor briefing, new research suggests.

That’s according to the BetterBriefs project, the first-ever global study (based on the opinions of 1,700 marketeers and agency staff from over 70 countries) into the shortcomings of marketing briefs, revealed at the IPA’s EffWorks Global event.

Why it matters

Respondents estimated that a third of the marketing budget goes to waste due to poor briefs and misdirected work. Both marketers (69%) and agencies (73%) agree that rebriefs happen too often, leading to loss of time, money and fuelling frustration on both sides.

Key findings 

Marketers and agencies are on different planets

• It’s not a new finding but the differences remain stark: marketers (80%) think they write good briefs, but only 10% of creative agencies agree. 
• Over three quarters of marketers (78%) think the briefs they write provide clear strategic direction, but only 5% of creative agencies agree.
• Marketers (83%) believe that the briefs they write contain clear and concise language, but only 7% of agencies agree.

Briefs are essential but neglected 

• Both marketers (89%) and agencies (86%) agree that it’s challenging to produce good creative work without a good marketing brief. But almost all marketers (90%) and agencies (92%) also agree that the brief is one of the most valuable and paradoxically most neglected tools marketers have to create good work.

The co-founders of the BetterBriefs project, Matt Davies and Pieter-Paul von Weiler, say its aim is “to jumpstart more informed conversations about briefs. They should direct and inspire, not confuse and frustrate”.

Sourced from IPA, BetterBriefs

Future of Strategy 2022: vital skills and worrying shortages

WARC’s Future of Strategy survey finds that, in a tumultuous world, strategists continue to gain influence, but talent shortages are a major concern for the profession. Here’s what you need to know.

Why it matters

From the COVID crisis through to today’s economic environment, uncertainty necessitates strategists.

Strategists’ generalist abilities stand out, as the report describes clients in need of professionals that can simplify, integrate, think big-picture, and address issues outside traditional marketing and move into new areas like responses to climate change. 

You can read the full report here.

Method

These findings are based on the tenth edition of the annual study, taking in responses from over 700 client- and agency-side strategists, as well as 12 in-depth interviews with strategy leaders.

The report examines “how strategy careers are evolving, the biggest topics impacting the function and what strategists need to do to meet high client expectations in an uncertain world”, explains Anna Hamill, Senior Editor - Brands, WARC.

Five ideas you need to know

1. Tumult keeps strategists in demand. Though the pandemic might have ended, the upheaval has not. Respondents feel optimistic about the value and influence they can bring both to their clients and agencies.
   
   
2. Agencies struggle in talent war against deep-pocketed competitors. Continuing a years-long trend, but with additional urgency, 46% of strategists are concerned about being able to find the right talent at a time when a majority (57%) report that they plan to hire to fill current gaps. Just 30% expect their next strategy role to be in an agency.
   
   
3. Thinking beyond marketing and about the business’s performance. Versus last year, 49% of strategists report working on upstream business problems with their clients as the discipline’s biggest opportunity – a ten percentage point increase on 2021’s results. But other questions are being asked too: a significant majority of strategists expect sustainability (82%) and DEI considerations (70%) to be more visible in client marketing strategies and briefs.
   
   
4. Strategists brace for cost-of-living crisis. Eighty-six percent of respondents anticipate the cost-of-living crisis will have a significant or transformative impact in the next year and 69% believe that it will be at the centre of marketing communications. However, the extent of concern depends on the region. In North America – which has a more optimistic mid-term economic outlook than Europe – just 50% of respondents believe that cost-of-living concerns will be more visible in client briefs, compared to 79% in Europe and 69% in APAC.
   
   
5. Diversity, equity, and inclusion needs work. Both at a client and at an agency level, challenges remain in this area with agencies continuing to lack internal diversity while clients struggle to deliver DEI agendas.
   

Go further

Expert commentary from leading strategists, who include Joyce Ling of Wunderman Thompson China, Aki Spicer of Leo Burnett Chicago, Anush Prabhu of MediaCom, James Honda-Pinder of We Are Social, Mehak Jaini of 22feet Tribal Worldwide, Eunice Tan of The Secret Little Agency and Nick Myers of OLIVER Agency, is available to read here.

The full Future of Strategy 2022 report which includes quantitative and qualitative data analysis and advice, is available to WARC subscribers.

A Future of Strategy podcast will be released mid-October.

CMOs struggle to get to grips with data ethics

CMOs are keen to address consumer and regulatory concerns around data-driven marketing, but the complexity of the data and digital ecosystem is making it hard for them to identify the right practical measures to take.

That’s according to new research* from the World Federation of Advertisers (WFA) which finds that the great majority of CMOs at multinational companies are prioritising an ethical approach to their use of data but half do not know what this means when it comes to the processes and practices they need to apply both internally and across their marketing supply chains.

Why it matters

WFA President and Mastercard Chief Marketing and Communications Officer Raja Rajamannar believes the digital ad market is “facing an inflection point with the scale of regulatory, consumer and market pressures” and says it’s down to CMOs to lead the way in ensuring brands can use data in a responsible, equitable and ethical manner. “If we don’t, we threaten the entire industry’s licence to operate longer term.” 

Key findings 

• 50% of CMOs are very concerned about the level of privacy compliance among their external partners and suppliers (e.g. publishers, ad tech, online platforms and data brokers).

• 83% of CMOs are very concerned about being associated with a service provider or supplier that is investigated for the unethical use of data.
• Only 16% of CMOs are very confident that their company’s use of AI and machine learning will not create harmful unintended consequences for their consumers such as bias, unfair discrimination or unfair exclusion.
• 85% of CMOs are considering using privacy-preserving alternatives to programmatic advertising in response to increased regulatory scrutiny.
• 33% of CMOs believe that their marketers are consciously avoiding using data in a way that exploits vulnerabilities (e.g. unfairly excludes certain audiences, fuels unhealthy consumption patterns or polarises opinions).
•  41% of CMOs say data ethics has become an integral part of their organisation’s culture.

Next steps 

The WFA believes that brands must go beyond existing rules and apply a moral lens to the complex web of data-related marketing practices in order to develop more responsible, inclusive and ethical data practices. Its new CMO Guide to Data Ethics in Practice is designed to help CMOs address these challenges and better understand their responsibilities around data and AI.

*The results are based on 12 responses provided by global CMOs who sit in the WFA’s CMO Forum, which represents brands spending over $120bn each year.

Sourced from WFA

How to market during tough times

As consumers in many markets endure the worst cost-of-living crunch in decades, the spotlight is on brands to adapt to changing behaviours and expectations while keeping business buoyant for the recovery; the WARC Guide to the consumer crunch: navigating inflation and the threat of recession shows how.

Why it matters

This is not a typical downturn. Sharp inflation and the threat of recession (or ‘stagflation’) make this period of instability particularly challenging for marketers, as rising prices amplify the effects of a downturn on consumer spend. The current economic environment poses challenges for brands as they navigate new pressures on pricing, portfolio management, innovation, advertising and more.

Key takeaways

• Marketers need to maintain investment in their brands as they seek to justify price increases and defend themselves from trading down or private-label rivals.
• Pricing can no longer be the ‘forgotten P’. Use data modelling and testing to understand price elasticity in your category, and use the other marketing ‘Ps’ to support any changes you need to make to price.
• Knowing if the brand has a greater degree of price ‘exposure’ vs. its competition is critical. Strong brands with more brand equity drive greater commercial growth and are less price elastic.
• Consider tiering or bundling strategies which can help reframe value to different audiences.
• Find innovative and creative ways to support consumers through this challenging time, which will help nurture consumer trust.

The WARC Guide to the consumer crunch presents the latest research, evidence and case studies to help marketers respond to this period of instability. The full report is available to WARC subscribers here, and a sample report is available to download here. An upcoming podcast will also discuss these issues.

Fintech fuels festive demand in India

After two pandemic-disrupted years, this year’s festival season in India promises to be a good one for e-commerce retailers especially, driven in part by pent-up demand, in part by the new flexibility offered by a fast-growing fintech sector.

What’s happening

Buy now pay later volumes were already up a reported 17% in the first half of the year and, now, as the festive season arrives, fintech brands are partnering with e-commerce players to enable more consumers to take advantage of the deals on offer. Digital finance company axio tells the Economic Times it has seen 50-60% increase in BNPL spending during the festival season, while Flexiloans.com expects the e-commerce to record $12bn in revenues. 

One fintech’s festive story

• Flexiloans.com reports demand from e-commerce vendors in over 500 cities.
• Lead inquiries have risen 300%; lending disbursals are expected to grow 3x.
• Where a normal festive season leads to perhaps 25% excess credit demand, founder Manish Lunia expects that to double to 50% this year.
• Just over half of new leads are coming from Tier 2-4 cities, he reports.

Key quote

“Customers opt for easy and affordable finance options like Pay Later to make aspirational purchases while exclusive campaigns run by large e-commerce companies and D2C brands provide additional impetus” – Sashank Rishyasringa, Co-founder and MD, axio.

Sourced from Economic Times

The devalued pound and what it means for advertising

Last week’s hastily arranged fiscal event hasn’t panned out the way its champions hoped as international financial markets lost confidence in the UK and investors shorted the £. But what does it all mean for advertising? 

What happened 

Just days ago, the UK’s latest Chancellor announced cuts to the top rate of tax income tax, increases in national insurance and corporation tax were cancelled, and a cap on banking bonuses was lifted at the same time as an enormously expensive energy price cap for households and businesses was put in place.

This was supposed to be good news

It’s easy to forget that the fiscal event was announced to make things better, and to provide a response to the energy price crisis that had threatened to hit people’s incomes so hard as to force a recession. But it’s the mix of heavy cuts (~£45bn) to government revenues and big increases in spending (over £100bn) to pay for the energy price fix at a time when borrowing is ludicrously expensive that has spooked the markets.

Two opposing directions

The response from the markets was disbelief and the sale of sterling. At one point the pound reached its lowest level since the UK’s currency became decimal in 1971. What’s more, investors have been selling off UK government debt; effectively, the country has become a pretty risky debtor to rely on.

 “Investors seem inclined to regard the UK Conservative Party as a doomsday cult” commented Paul Donovan, UBS GWM, as reported by Global’s Lewis Goodall.

A bigger worry may revolve around the interest rate rises that the Bank of England might have to make in order to correct what a budget of unfunded tax cuts will do to an already inflationary environment – the UK’s central bank has already said it would “not hesitate” to increase interest rates.

That tension cuts to the heart of the issue: as fiscal policy attempts to accelerate into growth, monetary policy must go the other way. This will hurt most people, make credit harder to get, and will very likely cause havoc in the housing market. If mortgage repayments spiral, it won’t just be low-income consumers switching to private label or value ranges.

Any stabilisation of the pound on Tuesday appeared to be predicated on interest rates going up and on deep cuts to public services in order to balance the books. Effectively, for businesses as much as consumers, financing is going to be a lot more difficult and a lot more expensive.

Costs will increase further

Immediately, this will hit British companies in the form of rising import costs, especially in those sectors highly exposed to the US – the Financial Times highlights aviation, with many operational costs such as fuel paid in dollars, and drinks manufacturers that import lots of hops from the US. But really, any and all imports have become more expensive. As will any media bought and sold in dollars (or most non-sterling currencies for that matter).

See examples and inspiration from brands around the world that have faced sharply devalued currencies.

A cheap shopping zone

Retail, meanwhile, sees a mixed bag. Overseas visitors will now enjoy VAT-free shopping, which alongside a weak pound, suggests that shops catering to international luxury shoppers are likely to do very well – as long as the costs of energy and imported goods don’t hit them too hard in the meantime.

There’s a similar possibility for the agency business – though this remains something of a fringe view – which is a strong exporter of both advertising and market research services, as it becomes more competitive (read, cheaper) to international buyers.

While that means some good news for vast multinational agencies capable of servicing international clients, it does little to help the smaller agencies catering to UK companies who are also feeling the ongoing strain on their costs and are watching their buyers tighten their belts.

Accelerating M&A

At a macro level, the weakening pound could set the scene for some discounted takeovers by rich US companies, with certain hedge fund managers noting in comments to the Guardian that UK firms – especially those with strong brands – had retained their value even as the Nasdaq slowed.

“We can expect to see a wave of bids from overseas buyers for UK businesses. Their profits obviously won’t be worth as much in dollars, so asset-backed situations and brands are most valuable,” Richard Bernstein, founder of Crystal Amber, an asset management firm, noted.

SPT

Why brands and agencies need a dedicated approach to marketing effectiveness

Having a marketing effectiveness roadmap increases effectiveness culture and helps create a better, balanced approach to value creation within brands and agencies – and more need to create one.

That’s according to the IPA’s 2022 Marketing Effectiveness Roadmap report, which finds that 26% of brand respondents and 37% of agency respondents claim that their brand or agency does not have an effectiveness roadmap. 

Why it matters

The report defines marketing effectiveness as: “The process of improving business performance from marketing activities, made easier and more impactful by people, technology, and a strong and clear focus.”

But for business performance to improve, more agencies need to start or reignite their effectiveness journey with an effectiveness roadmap and start building effectiveness roadmaps in partnership with each other.

The report suggests the industry needs to rally around one definition and one framework for understanding how to improve marketing effectiveness.

Findings 

• The biggest single increase in marketing effectiveness culture is when the effectiveness journey is started: for brands it increases (+88%), for agencies 33% (from a higher base).
• Having an effectiveness roadmap increases perceived marketing effectiveness culture by 37% for brands and 38% for agencies.

• When a roadmap is present, brands are 41% more likely to believe that their organisation balances the long and short term and 71% more likely to believe long-term brand effects are crucial.

• 26% of brand respondents and 37% of agency respondents claim that their brand or agency does not have an effectiveness roadmap.

What can agencies do

• There is an opportunity for agencies to create effectiveness roadmaps for and with each of their key clients.
• Agencies can put greater effort into helping the whole organisation better understand how an effectiveness approach increases effectiveness culture.

• They can help clients understand that the agency is a creator of value rather than a cost to brands.
• They can avoid effectiveness becoming siloed within planning, analytics or other departments.
• Agencies (and brands) need to address the effectiveness challenge posed by the lack of (or perceived lack of) data sharing from and with their clients, and also from and with other agencies that work for the same client.

Sourced from IPA

Confidence in retail media grows with Drizly ad network launch

Another week, another retail ad network launches – this time it’s the turn of Uber-owned Drizly, an alcohol delivery service that will expand its ad network beyond its current display offer to a wide suite of solutions.

The news

Drizly, which adds a delivery layer to local retailers, grew rapidly wildly amid a COVID-era explosion in demand. Now, with Drizly Ads, the company purports to be able to reach one of the US’s largest alcohol-drinking audiences “along every stage of their buying journey”. It touts that the marketplace, which serves around 5,000 retailers across 35 states, can run regulation-friendly advertising across the full funnel.

Behind the trend

Retail media is a huge growth market that GroupM forecasts expect to rise by 15% to reach a total $101bn in spend by the end of this year.

There are several reasons: from Apple’s Tracking Transparency making social media advertising measurement much harder, to the imperative for brand managers to “close the loop” and prove returns on advertising spend.

A move into retail media could contribute to solving e-commerce’s essential profitability problem (even as you grow your orders, you need to pay more people to deliver them) by opening up a higher margin revenue stream with fewer costs.

More broadly, it speaks to the increasing importance of advertising against consented, first-party data to demonstrate effectiveness and maintain user privacy.

Guidance and fine targeting in a heavily regulated industry

Key to this story is the importance of the heavy regulation on alcohol and its promotion, which means that brands do a lot of awareness building work rather than highly-targeted campaigns. Drizly’s niche is in offering much greater granularity.

“Drizly is one of the few partners where we have been able to bring a holistic campaign strategy to life with rich storytelling through advertising on their marketplace,” says Emma de Szoeke, SVP, consumer insights, analytics & business growth at Moët Hennessy, in a statement.

 “We know our partners are shifting to an omnichannel approach in how they market their brands to consumers, and Drizly Ads will play an important role in their overall campaign strategy,” explains Amit Patel, SVP of Drizly Ads and Partnerships. “With Drizly Ads, brands of all sizes can advertise directly to one of the largest audiences of high-intent alcohol shoppers in North America.”

Parent company Uber has also spoken about the importance of advertising to the wider Uber business, which has targeted $1bn in advertising revenue in the coming years, in an effort to uncover bigger margins.

Sourced from Drizly, GroupM, WARC. 
^{[Image: Drizly]}

Footfall data spells Christmas retail trouble 

UK shopping footfall is expected to decline every month between September and November, and while it will pick up in December it won’t recover the losses of previous months.

That’s according to data from retail intelligence firm Springboard, which tracks footfall around the country and which predicts that footfall in December 2022 will be 18% lower than in pre-pandemic 2019.

Context 

Footfall was slowly returning to pre-pandemic levels in the first half of the year but now consumers are struggling with a cost-of-living crisis and are braced for another rise in energy prices next month (even if the increases are less than they would have been thanks to the government’s cap). 

The inevitable response has been to cut back and the usual drop in spending and footfall seen between August and September – the end of the holiday season and the start of the school term – has been deeper than normal.

Key stats

• Month-on-month, footfall is forecast to fall by 4.9% in September, by 2.5% in October and 0.3% in November; December footfall, however, is forecast to increase by 6%, TheIndustry.Fashion reported. 

• Footfall is forecast to rise in all three destination types from November to December: by +4.5% in high streets, +5% in retail parks and +10% in shopping centres.
• The potential drop in footfall between September and November means October and November footfall will be lower than last year (-2.1% in October and -2.7% in November versus 2021)

Black Friday takes on new significance

“In contrast to the forecast for September, the drop in footfall in November this year will be mitigated by shoppers being likely to use the discounts available over the Black Friday period to buy Christmas presents with the hope of outrunning inflation” – Diane Wehrle, Insights Director at Springboard.

Sourced from TheIndustry.Fashion

The ultra-viral mobile game tracing ‘hard fun’ trend among China’s Gen-Z

A new WeChat mini game has exploded on the platform, garnering tens of millions of daily active users in just a handful of weeks, illustrating the strange business of gaming apps and their intersection with advertising, all within the Tencent-owned super app.

What’s going on

A flourish of reporting about the game, which is known as yánglegèyáng 羊了个羊, and translates roughly to Sheep a Sheep, highlights this incredibly fast-growing mobile game that added around 60m players in just two weeks, while interest in hashtags relating to the game have also exploded. This looks to be far faster than even some of its biggest competitor games.

Similar to Wordle’s explosion across the English speaking world, analysts have traced this kind of game’s popularity to a growing idea of “hard fun,” with some players staying up all night to try and beat a game that only 0.1% of users have finished.  

Why it matters

These days, most major social media firms around the world aspire to the super app condition of WeChat but very few achieve it. By comparison, Tencent’s position in the digital economy is closer to an OS or app store than a messaging service. But question marks remain over the sustainability and privacy of these games, even though they are vitally important to Tencent’s business.

What’s driving it

• The game is incredibly simple – as is the case for many ultra-viral mobile games – and involves puzzles that the player solves by matching icons made up of cartoonish graphics.
• What animates the conversation is the game’s sheer difficulty. With only three levels, it appears that level one hooks people in before becoming ludicrously difficult in level two. Players can access ‘cheat’ moves in return for watching an ad – this provides most of its revenue.
• It is also an effective deployment of community thinking, not only setting up leaderboards of rival cities and provinces which provides a powerful motivator of regional pride, but prompting a seemingly inconsequential topic that people can form camps around (preferences, etc.)

Controversy

Despite the massive growth, some would-be players have expressed concern about the game’s apparent practice of asking for both users’ names and personal ID numbers without explaining the purpose of this data collection. It’s a useful reminder to justify collection, especially if it hopes to continue growing.

Sourced from the China Project, Global Times, Jing Daily, That’s. [Image: Sheep a sheep]

APAC social media adspend up 7% in Q2: Report

Brands are allocating more budget to reach their target audiences via paid social amid pent-up demand for travel, according to customer experience platform Emplifi. 

Why it matters

Brands seeking to connect with their audiences are investing more in social media, which they recognise is an integral part of the marketing mix, with adspend linked to the airline and accommodation industries rising as business and leisure travel recovers.

Key figures

• After a post-holiday drop in Q1 2022, APAC brands’ median monthly adspend rebounded 6.5% in Q2 2022 to US$1,684 per ad account, although that is still 60% lower than in Q4 2021.
• This quarter’s rebound means the region’s median monthly ad spend has increased 7.12% year-on-year.
  
• Southeast Asia saw a similar trend, with a 6.85% increase in quarterly adspend and a 10.61% year-on-year jump to US$1,603.
• Global numbers were much more promising as monthly adspend bounced back by 18% in Q2 2022 and increased by 19% YoY.
• APAC adspend connected to the airline and accommodation industries was up 7.12% YoY as business/leisure travel recovers.
• Despite the travel boom, airlines’ use of social media for customer care shows a striking disparity in how brands have performed when customers post questions and complaints.
  
• The global airline industry is among the strongest in the speed at which they answer customer questions on Twitter (1.7 hours) and Facebook (5.4 hours), although most comments go unanswered.
• For 11 APAC airlines (Jan 1 to June 23, 2022): 31% response rate to customer questions on Twitter; 27% response rate and average response time of 1.23 hours on Facebook.
• In APAC, the click-through rate declined 14% YoY and 10.7% from the previous quarter, while cost-per-click rose 6.13% YoY and 5.3% from Q1 2022.

Key quote

“It’s no secret that TikTok’s surge in popularity is continuing – we’ve found that brands post more often on Instagram than TikTok and video content has higher engagement on TikTok. It will be interesting to see how this trends in the months ahead. What is certain though is that in today’s world, having and maintaining a solid presence on both TikTok and Instagram is essential” – Zarnaz Arlia, CMO, Emplifi.

Background

Emplifi's analysis is based on Q2 2022 data and year-on-year comparisons downloaded at the beginning of July 2022.

NFL sponsorship hails Apple’s arrival in sport

The iPhone maker and the National Football League have struck a deal for the sponsorship of the Super Bowl’s halftime show, replacing Pepsi, and hinting at deeper shifts in Apple's business.

Why it matters

Apple tends to do its marketing differently, usually choosing to stay high-end, but taking the spot of a major CPG firm at the country’s biggest advertising event indicates the importance of the mass market to Apple’s evolving business.

Now used by the majority of Americans, continued growth will come both from intensification of existing users while continuing to acquire new users. Sport is already a strategic pillar to this, as evidenced by Apple’s successful move for Major League Baseball rights.

What’s going on

The joint press release aims to reflect how the music and sport combo of the halftime show chime nicely with Apple’s longstanding presence in music (and also, it says, sport), but it comes at a time when the kinds of sums demanded by the world’s largest sporting IP are only available from major west coast tech firms of Apple or Amazon size.

The New York Times makes much of how it could point to a deeper relationship emerging in coming months or years, reporting that the opportunity for the halftime sponsorship stemmed from talks about a deeper relationship.

With an expensive though little used streaming service to sustain, it’s not beyond the realm of possibility that more, and more expensive sport will be available exclusively on Apple+. As its advertising ambitions grow, could it mean buyers going to Apple both for performance and more traditional-style TV inventory?

Sourced from NFL, New York Times, WARC

China’s half trillion-dollar wedding market and its discontents

The estimated average cost of a wedding in China is 8.8x a couple’s average monthly income, which has driven up the size of the country’s wedding market over 30% from 2020 to reach around half a trillion dollars (4.14 trillion Rmb).

Why it matters

Short-term growth in this particular market, however massive, doesn’t tell the whole story of China’s evolving attitudes to marriage.

An intellectual shift

Luxury news site Jing Daily pegs the rapid growth to the desire for unique, custom wedding experiences even as the official number of weddings fell by 6.1% in 2021 versus the year before.

A report from Daxue Consulting identifies in this surging market a deeper intellectual shift from more traditional wedding ceremonies toward ceremonies that reflect the changing tastes of individual couples. But it comes at a difficult time for the demography of the country.

A deeper trend

China has recently launched a marital and maternity survey to assess the ability of citizens to get married and have children amid precipitous drops in birth rate that could lead to population decline, which is a long-running concern. 

Some reports have linked the dip in rates of marriage to a need to fulfil a number of markers of success – having a good job and owning a house among them – before tying the knot, which has grown more difficult to achieve as prices have risen in a growing economy.

There is a cultural issue here, as delaying marriage is significant in a country where extramarital births are not explicitly outlawed, but certain local interpretations of the law make it very difficult for non-traditional families to obtain crucial state help.  

Declining births are also partly blamed on the effects of the country’s one-child policy, which ended in 2016, that contributed to an imbalance of more men than women in the population.

Still, it’s important to note that for many individuals the confluence of these wider shifts suggest a life in which people increasingly make their own choices. With far higher levels of education in younger generations – especially among women – marriage is no longer the primary objective for many young Chinese. It will take time for the system to adjust.

Sourced from Jing Daily, SCMP, FT, Daxue Consulting

Price is an essential element of a brand’s communication

Research indicates that consumers place far more emphasis on price as an influence on their perception of a brand than executives believe – part of a set of findings that suggest pricing should be part of the brief for the department that owns the customer relationship: marketing.

Why it matters

Prices are going up across the board, and to maintain any margin, consumer prices are rising too – this is a communications challenge, given the significance that buyers place on price, and should drive a re-think of marketing’s influence over pricing.

What’s going on

This is the conclusion of an article on pricing strategy in the Harvard Business Review, in which marketing professors and researchers from the universities of Ramon Llull (Barcelona), Munich, and Massachusetts, explain how price is far more than the result of a numerical calculation, but a signal of the business’s intentions, and look to theories in the field of linguistics for ways to approach it.

They make three recommendations:

• Prices reflect values. Certain brands have made good, fair prices a core value. Sometimes, this can be a case of showing slightly higher prices so long as there are no nasty surprises later in the interaction.
• Explain the price. Break down the costs or explain the rationale behind an eventual price, with transparency on internal costs like rent or wages humanising the eventual figure.
• Break rules. Sometimes, emphasising expense, or talking about it in totally new – even seemingly irrelevant – ways can elicit new comparisons.

Sourced from Harvard Business Review

Consumer confidence spirals downwards

UK consumer confidence hits a(nother) new low today but the picture is similar across Europe and the US where the spending habits of a majority of consumers are being reconsidered in the light of rising prices. 

Key figures

• GfK’s UK Consumer Confidence Index fell to -49 in September; the index has reached new lows in four of the last five months.
• Future-facing indicators are particularly bleak: confidence in personal finances in the coming year is down nine points to -40 while confidence in the economy in the next 12 months is down eight to -68.
• A separate study from First Insight found that, on average, 82% of consumers in France, Germany, Italy, Spain, the UK, and the US have less confidence to spend ahead of the holiday season.
• On average, 68% of consumers are most impacted by rising food prices, most notably in Germany at 78% with the UK and Spain closely following.
• German consumers report the most significant inflation-induced change in their shopping habits and say they are shopping more for deals and staying within a budget.
• The threat of recession concerns at least 92% of consumers in every country and two thirds, on average, believe that a recession is already underway. 
• Almost one-third of consumers overall acknowledge that they are saving less because of high prices, and 17% report that they are tapping into savings to cope with the cost of living crisis.

Why it matters

Falling consumer confidence and belt-tightening ahead of the crucial holiday season means brands and retailers may need to re-examine their pricing and promotional strategies. 

Key quote 

“Consumers are buckling under the pressure of the UK’s growing cost-of-living crisis driven by rapidly rising food prices, domestic fuel bills and mortgage payments. They are asking themselves when and how the situation will improve” – Joe Staton, Client Strategy Director, GfK. 

Sourced from GfK, First Insight

Rising cost of living isn't stopping Singaporeans looking for love

Seven in ten Singaporeans (69%) are still eager to date even as the options for such activities become limited by the rising costs of living.

That’s according to a study on the impact of inflation on the dating lives of single Gen Z and millennial Singaporeans by Bumble, a women-first dating and social networking app.

Why it matters

Daters are now more budget-conscious – especially Gen Z who typically have less disposable income – and are increasingly likely to prefer free activities and splitting the cost of a date.  There’s an opportunity here for relevant brands to smooth the path of love, whether that’s by enabling lower cost activities that can sometimes be the most bonding or favouring the lucky few with nights out in high-end restaurants and bars. 

Key insights

• When faced with mounting financial pressures, Singaporeans are overall more budget-conscious and would prefer inexpensive date activities.
• Nearly three-quarters of Singaporean singles (72%) would prefer a free activity for their dates and Singaporean women are more likely than men (79% vs 65%) to pick a free activity.
• In response to rising costs, three in five Singaporeans (58%) said they would split costs with their dates, while more than half (52%) would use a coupon or a voucher to subsidise the cost of a date.
• Overall, Gen Z is more likely than millennials to pick a free activity; in particular, Gen Z men are more budget-conscious when compared to millennial men.
• Gen Z is more likely to pick a free activity (72% vs 60%), split costs with their dates (66% vs 50%) and offer to cook dinner so they do not have to go out on a date (50% vs 39%).
• Among women, there are no distinct differences between Gen Z and millennials in preferences on how they would budget on a date.
• Singaporeans tend to dine out as a first date activity, with go-to options being meeting over lunch or coffee at a cafe (42%) and having dinner at a restaurant (24%).
• But such F&B options are becoming increasingly more expensive as food inflation has been rising month-on-month to hit 1% in July 2022.

Background

Conducted by YouGov Singapore, total sample size was 1,001 single adults aged 18-41, fieldwork was undertaken from August 5-16, 2022 and the survey was conducted online.