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WARC Rankings 2024: Effective 100 revealed
McDonald’s, Cadbury and Ogilvy lead the Effective 100 rankings – the third and final release in the WARC rankings – and here’s how they stack up.
The WARC Effective 100 recognises the world’s most awarded campaigns and companies for effectiveness. Compiled by WARC Creative, the tracked awards are determined by a yearly global panel survey and in consultation with the WARC Rankings Advisory Board.
Get the full results
- The full WARC Effective 100, Creative 100 and Media 100 Rankings can be viewed in full here.
- For a limited time the WARC Effective 100 summary report is available to all here.
Leading the rankings
#1 Campaign for effectiveness: ‘Shah Rukh Khan-My-Ad’ by Ogilvy Mumbai / Wavemaker Mumbai for Cadbury
The most effective campaign of 2023 was ‘Shah Rukh Khan-My-Ad’, created by Ogily Mumbai and Wavemaker Mumbai for Cadbury. The confectionary company increased sales of its Celebrations product by 35% during Diwali, with an interactive, geo-targeted campaign that made Indian superstar Shah Rukh Khan the ambassador for small, local stores.
#1 Creative agency for effectiveness: Leo Burnett, Dubai
After ranking for the first time last year at #26, Leo Burnett Dubai has stormed up the list to secure first place this year. The agency’s best performing campaign was ‘The Homecoming’ for Home Centre, which ranked ninth and was among four other campaigns that ranked in the top 100.
#1 Media agency for effectiveness: Mindshare New York
For the first time, Mindshare New York is crowned the most effective media agency in the WARC Rankings, up from second place last year. This success is largely attributed to its campaigns for Unilever brands, the most successful being ‘See My Skin’ for Vaseline, which ranked seventh.
#1 Network for effectiveness: Ogilvy
Ogilvy has retained its top position as the best performing network for effectiveness. The network has 11 campaigns in the top 100, including the #1 campaign ‘Shah Rukh Khan-My-Ad’. It also has eight agencies in the creative agency ranking.
#1 Holding Company for effectiveness: Omnicom Group
After five years of being the runner-up in the holding company table, Omnicom Group has moved up one place to become the most effective holding company this year with 13 creative agencies and 15 media agencies in the top 50.
#1 Brand for effectiveness: McDonald’s
McDonald’s tops the effectiveness ranking for the fifth year in a row. The fast food brand has three campaigns in the top 100, including ‘Famous Orders’ which has ranked third for the second year in a row. In total, it had 40 campaigns contributing to its points total in the full rankings database, across 23 different countries.
#1 Advertiser for effectiveness: Anheuser-Busch InBev
Anheuser Busch InBev is the highest ranked advertiser for effectiveness for the third year in a row. Thirty-two brands contributed to its points total, five of which ranked in the top 50.
Unilever moves up to claim second place with three brands ranked: Dove, Vaseline and Hellmann's. McDonald’s is in third place. The most improved advertiser is The Coca-Cola Company, rising 10 places to seventh. While only one of its campaigns ranked in the top 100, it won awards for 22 campaigns in total.
#1 Country for effectiveness: USA
The USA remains the most awarded country for effectiveness, with 24 campaigns in the top 100. India has risen to second place with seven campaigns ranked. Brazil moves up three places to rank third. Argentina and New Zealand are the most improved countries, both rising 11 places to seventh and eighth respectively.
China’s livestreaming sector enters new phase
The number of professional hosts working in China’s short video and livestreaming sector has topped 15 million, although growth in viewer numbers appears to have tapered off.
That’s according to new data from the China Netcasting Services Association (CNSA), reported by the South China Morning Post, which estimates that almost the entire country’s internet population is already using online video apps and other video services.
Takeaways
- In a 2023 survey, the CNSA found that 71% of internet users had made online purchases based on viewing short videos and livestreams, up from 43% in 2022.
- The same survey also reported that over 40% of users considered short videos and livestreams as their “primary consumption channel”.
- Alongside the 15 million hosts, there are more than 660,000 companies running online video services as their primary business.
- In the first 10 months of 2023, sales from livestreaming e-commerce were up 59% on the same period a year earlier.
- Livestreaming commerce accounts for around 18% of all online shopping in China.
Why livestreaming in China matters
Livestreaming as a category has grown rapidly in recent years but as it now seems to be hitting a plateau in terms of new users, platforms will likely have to work harder in their marketing to attract and retain both hosts and customers.
Sourced from South China Morning Post
Creativity sees big boost from AI at Spikes Asia
The number of entries to Spikes Asia that used AI in the creative process more than doubled in 2024.
The Spikes Asia Creativity report 2024 includes what won at Spikes Asia and why, and highlights trends emerging from the winning work, of which the increased use of AI is just one.
Winning themes
- Tackling urgent briefs: brands are helping to change behaviours across a range of issues, from sustainability (#unplasticIindia), to gender bias (See Equal #sharetheload), to organ donation (Paper Organs).
- Building connections through culture: winning work showed how brands understood culture (The Moving Canvas), the nuances of different platforms (My Parent is a TikToker), and social memes – so they stood the best chance of connecting with audiences.
- More use of humour: whether to make difficult issues more approachable (Blokequet), drive a brand message (England Bitter) or turn flaws into features (Sammakorn NOT Sanpakorn), humour proved an effective tool.
- Immersive entertainment: from the use of ongoing stories (Milk Manga), to winning product demos (Try Galaxy Fold Experience), to encouraging UGC (Skinny Phone It In), brands were involving their audiences.
Sourced from LIONS
Where to start with multisensory marketing
Appealing to the senses has become paramount for brands aiming to stand out, build trust, and differentiate themselves from the competition, writes Scott King, Director at Full Fathom, in a new article for WARC.
Why multisensory marketing matters
- In a world inundated with marketing messages, the ability to harness multisensory experiences offers a powerful tool for differentiation and brand resonance.
- Research by Wunderman Thompson found that consumers are indeed demanding immersive sensorial experiences: 63% seek brands that can provide multisensory moments, and 61% long for brands that can ignite intense emotions.
Marketing across the senses
In 2024, consumers are on a journey of sensory exploration and innovation. By crafting truly multisensory brand identities and experiences, based on sensory science, there is an opportunity to develop more immersive experiences and communications that captivate and resonate with consumers on a deeply profound level.
Key takeaways
- Cross-sensory sound in the context of an AR fashion experience increases engagement by over 30% and perceived value of the products featured by around 20%.
- Brands need to be developing unique taste assets – ownable drinks, canapes, flavour experiences that surprise and delight whilst also embodying and communicating the brand through taste.
- Multisensory design is all about unifying the lines between different sensory modalities to create truly immersive experiences. Brands are combining sound, light, scent, and touch to captivate consumers and leave a lasting impression.
A majority of Americans and US advertisers now use ad blockers
Over half of American internet users block online ads, with professionals in advertising and other online-adjacent industries even more likely to do so.
Why ad blocking matters
It’s a pretty damning refutation of online advertising if experts, often those who work to build advertising and tracking technologies, are not only worried about their own privacy (27%), but actually want to block advertising (20% among advertisers, the highest of any expert group surveyed). It’s a sobering read.
By the numbers
According to a Censuswide survey of 2000 Americans on behalf of the popular ad and tracking blocker Ghostery, 52% of all respondents use an ad blocker, but ‘expert’ users with a technical or – perhaps more worryingly – an advertising occupation are much more likely to use this software.
- 66% of advertising professionals
- 72% of programmers
- 76% of cybersecurity professionals
Key quote
“It’s very telling that individuals who are not only more knowledgeable about the inner workings of the internet, but actually behind the mechanisms for targeted advertising and tracking, are protecting themselves far more than the average American.
“As these experts shore up their privacy and data protection against their own products, everyday consumers must take action to avoid remaining susceptible to the ever-expanding, invisible world behind their browser” – Jean-Paul Schmetz, CEO of Ghostery.
Sourced from Ghostery
GWI research shows broadcast TV’s surprising staying power
Despite some declines in TV viewing, research firm GWI’s Global Media Landscape report shows that TV remains the most viewed channel per day globally, even as online TV and streaming rise.
Why broadcast TV matters
Too much focus on TV’s decline can obscure the bigger picture that it remains a powerfully effective tool (perhaps even more effective now that we live in a low-trust age globally, according to Peter Field) and one that people enjoy and continue to use a lot.
The trouble is that the perception of TV’s demise is having real-world effects. Not only are advertisers spending less, but financiers are adapting their terms in line with what they increasingly believe to be a risky exposure, as in the case of Paramount Global.
What’s going on
As GWI’s research (see chart) shows, the rapid growth of streaming relative to TV may be normalising as big-screen viewing reaches an equilibrium.
- What’s more, it remains a critical channel for introducing people to new brands: 31% of global respondents report discovering new brands on TV versus 17% who do so from pre-roll ads on streaming platforms.
- Perhaps the greater trouble is at the level of the overhead. The kind of content, namely news, that makes traditional TV channels useful public services simply does not exist on most streaming platforms. In part, this is down to shifting consumption patterns as well as the relentless flow of bad news.
- A vital lesson is that crossover in media remains high and that channels are not a zero sum game.
Key quote
“Live TV is still a core form of entertainment for consumers,” says Chris Beer, trends analyst at GWI. “But as with any form of consumption, appetite is always subject to change. Although TV still dominates, our data shows that at the end of 2023, 13% of UK Gen Zs don’t watch broadcast TV on a typical day.”
Sourced from GWI, WARC, Variety
Chrome's tracking protection a watershed for measurement
The rollout of tracking protection in Chrome is an opportunity for CMOs to adopt a holistic view of measurement, and to leverage incrementality, multitouch and multimedia attribution.
Takeaways
- Acknowledge that last-click attribution is flawed and re-evaluate your measurement strategy.
- Embrace a new kind of media mix modelling: it has evolved considerably and many of the perceived barriers are no longer the issue they once were.
- Focus on creative excellence that is fit for channel. Advertisers need to acknowledge platforms are unique, and flex their approach to get the best out of each.
- Ultimately, marketers need to take the C-Suite with...
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Platform Insights: Snapchat bounces back
After several years of flat advertising revenues at Snapchat, WARC Media is forecasting a 13.7% increase in 2024 (2023: +0.1%) as the platform pivots to a new strategy.
The prediction is included in Platform Insights: Snapchat, the latest in a series of reports exclusive to WARC Media subscribers, which include an overview of platform investments, media consumption and performance insights.
Why Snapchat matters
It’s easy for brands to overlook Snapchat in the context of giants such as Meta and TikTok, but as Alex Brownsell, head of content, WARC Media, explains: “In an era where social media apps are evolving into mass entertainment platforms, and social communication has retreated to group chats, Snapchat is betting that a laser focus on enabling real connection and community will breathe new life into the platform.”
Takeaways
- Annual advertising revenue to reach $5.2bn this year
The platform’s latest earnings call revealed a change in strategy, with the company moving away from augmented reality and instead prioritising AI for ad optimisation, content experience and user growth. Business and industrial is forecast to be the biggest spending category on Snapchat in 2024 ($756.8m), while political ad spend is expected to increase 85%, owing in part to the upcoming US presidential election.
WARC’s annual Marketer’s Toolkit survey found that 21% of advertisers plan to increase investment in Snapchat, while 29% expect to decrease spend. APAC marketers showed the highest intention to increase investment (23%), while Europe has the lowest (20%).
- Global DAUs reach 414 million
Snapchat has seen its base and reach expand, especially with unique audiences among younger cohorts. DAU growth in North America remained flat while the rest of the world users grew 19%. India leads as the country with the largest Snapchat advertising audience, ahead of the US, Pakistan, France, and the UK.
One fast growing market is Australia, with users spending up to 17 hours on the Snapchat app per month. Australian Snapchatters also reportedly open the app 40 times per day.
As social media becomes a place to discover products and brands, We Are Social reports that just over one in five consumers choose Snapchat for brand search.
- Brand-safe content
As digital platforms undergo heavy scrutiny, an advantage of Snapchat lies in its high levels of brand safety. Data from Snapchat shows close to 99% brand-safe content on Spotlight, and 100% safe creator content.
Snapchat is also actively launching products to help brands partner with its creator community, including its Creator Collab Campaigns, and is aiming to enable advertisers to tap into cultural moments. Social commerce is growing on the platform thanks to its focus on lower-funnel objectives, AR and AI assisted tools, creator content, and high reception among users due to the ‘close circle effect’.
Snapchat’s change of platform strategy signals a move to a new kind of digital future: a return to the more literal “social” element that channels originally aspired to.
Sourced from WARC Media
Gaming drives purchase in three key SEA markets
New data from WARC shows that at least a quarter of video gamers in Indonesia and Singapore have bought a product they first saw in a gaming stream or while playing a game themselves, but the latter rises to 31% in Malaysia.
Why gaming matters
Southeast Asia’s gaming culture is thriving, with the number of mobile and PC gamers in the region expected to increase to 344 million by 2027, up from 288.5 million in 2023. The reach that gaming offers can be especially helpful for driving funnel objectives, from discovery to purchase.
Key statistics
- Over half (59%)...
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Brands need to communicate sustainability benefits
Sustainability communications can serve as an untapped opportunity to highlight the potential long-term cost benefits of a sustainable choice, finds a new report.
Sustainability and Purpose, by MAGNA UK and IPG Mediabrands in partnership with Kantar and Google, is based on the shopping journeys of more than 5,000 consumers. It argues that brands can be both purposeful and profitable by leveraging sustainability throughout the path to purchase.
Key findings
- Sixty percent of UK shoppers across all categories claim to go online at least once a month to learn about sustainability; this number increases to almost 90% among Gen Z shoppers.
- Seven in 10 shoppers say they feel encouraged to buy from a brand if they are aware of its mission statement; but in most categories fewer than two in 10 could correctly assign a mission statement to the right brand.
- Sustainability plays a role for 89% of UK sportswear shoppers; 26% of sportswear buyers said they intentionally bought the most sustainable option.
Why sustainability comms matters
The research demonstrates that value for money and quality have a stronger influence on purchase intent than sustainability. But sustainability concerns are drivers for both brand affinity and purchase consideration to varying degrees, depending on the audience and category. This suggests that sustainability should not be seen as “nice to have” or an “add-on”, but rather as part of a fundamental strategy within holistic communications planning.
What it means
Marketers should consider prioritising media touchpoints based on their relevance for sustainability and investing in the findability of their mission statement.
Sourced from MAGNA, IPG Mediabrands
ESG efforts aren't dead but being pursued more quietly
Recent high-profile examples of public pushback about ESG initiatives have led to a belief that companies are walking away from these commitments, but it’s actually shifting to an under-the-radar, less performative pursuit of ESG goals, especially sustainability.
Why leaning more quietly into ESG matters
The current retooling going on beneath the surface is important to monitor, as it’s making companies more focused on the effectiveness of their efforts, with a concentration on more achievable near-term goals.
Takeaways
- 92% of CEOs say they plan to stay the course on sustainability strategies, 63% of executives agree there’s a clear business case for...
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What CPG marketers are looking at in 2024
E-commerce everywhere, CTV/Streaming and Gen AI are among the most important consumer trends identified in 2024 by CPG marketers, according to a report from Mediaocean.
Key findings
- More than half of respondents to a survey* cited e-commerce everywhere (57%), CTV/Streaming (56%) and Gen AI (55%) as trends to watch; TikTok/social video (50%) was also significant.
- Macro ad spend trends reflect CPG industry optimism: 72% of survey participants in this sector are planning to increase digital display/video spending, 67% for social media, and 56% for CTV.
- Data analysis (41%) and market research (29%) led the way for Gen AI use cases, while copywriting and image generation landed just 25% and 12% respectively.
- Almost all CPG marketers (94%) said their media and creative were not fully synchronised. It seems that brands are over-indexing on media at the expense of creative: consumers responding to customised experiences represents the largest growth opportunity for brands, the report suggests.
Why CPG trends matter
With consumers able to purchase products from anywhere at any time, CPG marketers feel the need to prioritise online channels, optimise their digital presence, and leverage data-driven insights to effectively engage with consumers.
That’s reflected in the fact that 62% see performance-driven paid media as their most critical investment, with just 45% citing brand advertising – almost the inverse of Binet and Field’s 60:40 rule of thumb for brand to performance investment.
* The 2024 CPG Advertising Outlook Report from the advertising services company is based on responses from a CPG-focused subset of 118 respondents to the larger 2024 Advertising Outlook Report which surveyed 1085 marketing industry professionals globally.
Sourced from Mediaocean
Impulse buying takes a knock as shopping habits change
Impulse buying is on the wane as economic pressures rise and shopping habits change; brands may need to reconsider their approach to product development and consumer engagement.
Why impulse purchases matter
“Every category relies to some degree on unplanned shopper purchases, but there are many factors in play right now that are bad news for impulsive behaviour,” says Andrew Wardlaw, chief ideas officer at MMR Research.
What’s happening
- One factor is price: in recent earnings calls, several FCMG businesses pointed to the importance of having strong brands in order to be able to increase prices while maintaining profitability, but, for many, volume sales have been flat or declining as consumers tighten their belts.
- A trend towards more intentional living – or at least more intentional spending – is also making ad hoc in-store decisions less likely.
- The shift to online shopping that accelerated during the pandemic reduces opportunities for impulse buying.
- Regulation in some categories is aimed at curbing unhealthy consumption patterns (eg HFSS advertising).
What brands can do
- Scarcity and collaboration can create FOMO (Fear of Missing Out) frenzy. Products such as Heinz’s The Godfather Pasta Sauce illustrate this point.
- Consumers are drawn to brands that align with their values. Alicia Keys’ beauty line, for example, exemplifies how purposeful products resonate with a growing desire for intentional consumption.
- In a “low attention economy”, standing out on the shelf is crucial. So eye-catching packaging is important – think Juicy Marbles’ innovative approach to plant-based meats.
- The rise in online grocery shopping points to a need to bridge a sensory gap and improve confidence in digital environments. (MMR’s own Sensory Charged Video claims to stimulate impulse purchases and enhance consumer engagement online.)
Key quote
“As custodians of the CPG industry, we must embrace innovation that responsibly generates upticks in unplanned buying” – Andrew Wardlaw, Chief Ideas Officer, MMR Research.
Sourced from MMR
IPL ad costs could help boost other sports
The merger between Reliance and Disney has the potential to reshape India’s sports media landscape, as the flagship IPL tournament becomes the preserve of the biggest advertisers, while smaller advertisers turn to emerging sports.
What’s happening
- Last month’s announcement of an $8.5bn tie-up between the two companies finally ended speculation that Disney was set to leave India.
- The joint venture brings together the sporting rights of the separate entities so that it controls 70-80% of the country’s cricket content (as well as the IPL this includes WPL, ICC and BCCI media rights).
- Cricket itself hoovers up more than 85% of total sports industry spending across media, sponsorship and endorsement.
- “This development underscores the IPL’s towering influence on media consolidation and its burgeoning role in shaping the future of sports broadcasting and advertising in India,” says Daoud Jackson, senior analyst for Media and Entertainment at advisory business Omdia.
- The IPL has global ambitions and team owners are involved in new T20 franchises in the Middle East, South Africa and the US.
What it means for advertising
- With IPL media rights costing around $1.2bn annually, rights holders Reliance and Disney will seek to recoup this cost primarily through advertising and sponsorship, rather than subscription revenue.
- There are signs that 2024 will be a record year for advertising around the event, according to Omdia, with more games than ever before, increased commercial confidence across the country and broadcasters announcing new ways to drive revenue.
- Observers anticipate IPL and Cricket World Cup ad rates rising due to a monopoly effect, possibly to the point where only large advertisers can afford to be associated with these tournaments.
- Advertisers with smaller budgets seeking a sports audience are likely to invest in non-cricket sports, such as football or kabaddi, which are widening their audience base.
Sourced from afaqs!, Omdia
[Image: IPL]
The changing world of DTC
Many digitally native brands are rethinking their expansion into physical retail while some traditional brands, like Nike, are reconsidering their pivot to DTC.
What’s happening
- Rents are going up after being reduced during the pandemic, and consumer spending on discretionary items is falling as the cost of living increases. For DTC brands, there’s a new focus on profitability rather than top-line growth.
- Funding has dried up: in 2021, $5bn of capital went to fund DTC businesses but two years later that had fallen to just $130m, according to data from Crunchbase.
- Shoe brand Allbirds is planning to close a third of its stores, Modern Retail reports, while Athleisure brand Outdoor Voices has closed all its retail outlets; mattress company Purple has said it will slow new store openings and focus on its existing sites.
The Nike case
- Sports brand Nike is an example of a brand that has invested significantly in a DTC operation that aims to provide a seamless experience across its own websites and stores while reducing dependence on third-party retailers.
- That thinking is shifting as the brand reinvests with its wholesale partners (who continue to represent three-quarters of the market in unit terms). “The consumer is still clearly shopping in multi-brand retail,” Nike CFO Matthew Friend told a recent earnings call.
- CEO John Donahoe added that “we must lean in with our wholesale partners to elevate our brand and grow the total marketplace”.
- “We recognize that our wholesale partners help us scale our innovation and newness in physical stores and connect our brands in the path of the consumer,” he said.
- In Q3, Nike direct sales in North America were up 23% but wholesale was up 32%.
Key quote
“I think they [DTC brands] might be surprised to learn how their online sales are affected in these markets where their stores are closing. Retail is like a muscle that needs to be exercised. And so, if you stop exercising any muscle, it atrophies” – Rebekah Kondrat, founder of Rekon Retail.
Sourced from Modern Retail, Seeking Alpha
How semiotics helped reinvent Baileys
When Baileys set out to transcend the drinks category and become a leading adult treat brand, it turned to semiotics to help it negotiate the new world it was entering.
Why semiotics matters
When a brand steps beyond its own category, it’s crucial to understand this new arena and how that may change over time in various markets. Semiotics can play an important role in that process.
Takeaways
- By mapping the semiotics of the wider treats category, Baileys was able to identify a space the brand could be uniquely associated with.
- It was able to build a globally consistent but...
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Why McDonald’s is talking to the hand
McDonald’s came up with a “trust framework” that informed its creative and helped shift the dial with brand sceptics.
Why trust matters
Trust is a crucial factor for any food outlet: greater trust means greater affinity which leads to more visits and more spending. But the best way to drive that trust may not be what first springs to mind, as McDonald’s research showed.
Takeaways
- Rather than a rational approach that bombards people with facts, humour can be a far more effective way of getting them to retain information.
- Instead of using the brand or an expert as the messenger,...
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Brits stick with live TV, for now
Media habits are changing but nearly two-thirds (64%) of Britons’ TV viewing time remains spent on live TV, with online streaming (36%) some way behind, according to a new study.
GWI’s 2024 Global Media Landscape Report says hits like BBC’s The Traitors demonstrate TV’s durability, but cautions that, “as with any form of consumption, appetite is always subject to change”.
Why TV viewing habits matter
TV may still dominate viewing time but brands need to look to the future. GWI reports that, at the end of 2023, 13% of Gen Zs didn’t watch broadcast TV on a typical day. In a fast-changing technological environment, this demographic’s media habits are proving to be significantly different to those of its predecessors.
Takeaways
- ChatGPT has become ingrained in how younger generations in particular search for information – it’s one of the top three ways Gen Z search for information, with 40% of 16-26-year-olds using it in this way.
- Gen Z is the only generation to prefer social platforms over search engines for shopping purposes. Customizable results will draw 16-26-year-olds in, and it’s likely this behaviour will continue with Gen Alpha.
- Ethnic minority groups (22%) are more receptive to influencer recommendations than the average consumer (14%), which suggests they are still underrepresented in traditional media.
- Since 2021, there’s been a 17% increase in shoppers favouring ads that offer discounts or special offers, with 37% saying this is a priority for them. Price is now more important than other factors such as social responsibility.
Key quote
“While traditional advertising remains strong, the data presents new opportunities for brands to engage audiences in creative ways. Brands should look for new ways to expand their marketing strategies through the media and find new pathways to reach people” – Chris Beer, Trends Analyst at GWI.
Sourced from GWI
How brands can tap the growing gaming market in Vietnam
With a young and digitally savvy population, Vietnam is a huge market for e-sports and online games, offering brands the opportunity to access a lucrative gamer community that is transforming Vietnamese society and consumer behaviour.
Why gaming matters
Brands should view gaming as a mainstream media platform with sub-cultures and communities; by targeting gaming cafes and gamer KOLs, they can influence this unique audience while also benefitting from the retail potential of this industry.
Takeaways
- Gaming cafes are popular due to gamers’ preference for PCs and offer a communal venue for casual gamers to socialise.
- Professional players and streamers have...
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Bud Light: not all boycotts are equal
Bud Light is far from the only brand to have seen a backlash to its stance on a social issue, but its sales suffered more than many others – an assessment in the Harvard Business Review suggests possible reasons why.
Background
A social media post in April 2023 featuring transgender influencer Dylan Mulvaney sparked conservative figures to call for a boycott of Bud Light. Over the following three months, says the HBR research, Bud Light sales and purchase incidence were about 28% lower than during the same period in prior years.
This decline persisted into the fourth quarter when sales and purchase incidence were down 32%, and it was more pronounced in Republican counties. Around 15% of previously loyal Bud Light customers were identified as shifting spending on beer to other brands as part of the boycott.
Factors at work
- Polarization of an existing base. The authors speculate that middle-ground brands such as Bud Light are more vulnerable when taking a stance as they could potentially alienate a large chunk of their customer base, unlike brands near the ends of the political spectrum which are less likely to anger existing customers.
- Substitutability. Brands with close substitutes are easier to boycott because there are many similar alternatives. There are many light beers available to consumers, for instance, and they tend not to have any distinguishing taste.
- Observability of consumption. Whether a consumer boycotts a brand or not may be down to peer pressure and whether he or she is seen consuming it in public. If consuming in private, they may be less likely to boycott it.
- Sense of brand ownership. The authors note that Bud Light’s advertising may have built a strong sense of “psychological ownership” with their customers that led many to feel personally affronted by the brand supporting an issue they did not agree with.
- Prolonged engagement. Media coverage generally moves on quickly to something new, but Bud Light’s delayed response helped to keep the issue in the news spotlight and top of mind with consumers.
- Distribution changes. Retailers won’t give shelf/bar space to brands that aren’t selling and that can create a negative feedback loop. (AB InBev has acknowledged Bud Light lost shelf space but says it has recovered that space with other brands across its portfolio).
Lessons for brand marketers
- Know your consumer base and align your messaging accordingly.
- Assess your vulnerability to close competitors.
- Avoid actions that will prolong negative attention in the media.
Lessons from the Bud Light Boycott, One Year Later is written by Jura Liaukonyte (Cornell University’s SC Johnson College of Business), Anna Tuchman (Northwestern University’s Kellogg School of Management) and Xinrong Zhu (Imperial College London Business School).
Sourced from Harvard Business Review
[Image: Bud Light]
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