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. 

The evolution of China’s childrenswear market 

Younger Chinese parents are more fashion conscious than the older generation and are willing to spend more on children’s clothing – a market projected by Euromonitor to be worth RMB 473.8bn by 2025.

Why it matters

Vogue Business cites a shift from the “pragmatism” of 1980s-born parents to the “image value” sought by 1990s-born ones. 

The childrenswear market is always changing but in this huge market where single children have long been the norm there’s now a greater appetite for “cool” fashion and brands need to be ready to respond accordingly. 

Takeaways 

• 70% of parents aged under 30 “prefer “brands that are trendy and fresh” (Nielsen).
• Spending on maternal and infant products accounts for 30% of monthly income for those born after 1995, compared with 25% for those born after 1985 (iResearch).
• Collaborations and co-branding are seen as an effective way to attract the spending of younger parents.

Where next? 

Younger parents may be more fashion conscious but they’re also more environmentally aware and this understanding may help drive a resale market for children’s clothes. 

Sourced from Vogue Business

EU Parliament approves major new rules: DSA/DMA

EU legislators have passed a package of rules that have loomed over major online businesses since 2020 – the Digital Markets Act and the Digital Services Act – with the potential for impact far beyond Europe.

Why it matters

These two pieces of legislation cover competition law (designed to reign in the ‘platform’ giants) and new rules on all intermediaries, including algorithmic transparency that could be hugely significant to the advertising business. These are now set to become law, according to Reuters.

In principle

Both the DSA and DMA form part of a wider package, known as Shaping Europe’s Digital Future, the meat of which will hang on two aspects: 

• “To establish a level playing field to foster innovation, growth, and competitiveness, both in the European Single Market and globally. [Digital Markets Act]
• “To create a safer digital space in which the fundamental rights of all users of digital services are protected [Digital Services Act]

In practice

• The DMA revolves around the “gatekeeper” platforms that effectively function as multi-sided marketplaces with several opportunities to favour their own services on their own platforms. It is expected to mostly affect Google and Apple.
• The DSA is broader and more complex as it touches large and small ‘intermediaries’ and places new obligations on the policing of certain kinds of content and illegal products. Advertising to children or based on sensitive personal data will be curtailed. It also carries a privacy element, with new algorithmic transparency rules applied to big platforms (45m+ users).

Like other landmark pieces of EU legislation, critics frequently cite the problem of enforcing such broad new rules, which carry such heavy penalties – breaching the DMA and DSA can result in fines of 10% or 6% of global turnover.

The EU has said these rules will be enforced at a continental, rather than the national, level – likely a response to a significant criticism of the nationally, and quite rarely, prosecuted GDPR.  

In January, parliamentarians reported an onslaught of ads and lobbying against the law, suggesting that major interests see the threat inherent in these laws.

Key quote

As if to illustrate the sheer vastness of the new rules, here’s the world’s most famous regulator, Margrethe Vestager, EVP for Europe Fit for the Digital Age, summing up the rules in a statement to the press:

“The Digital Services Act enables the protection of users' rights online. The Digital Markets Act creates fair, open online markets”, she explains.

“As an example, illegal hate speech can also be dealt with online. And products bought online must be safe. Big platforms will have to refrain from promoting their own interests, share their data with other businesses, enable more app stores. Because with size comes responsibility - as a big platform, there are things you must do and things you cannot do.”

Next steps

While a lot remains to be seen, it’s time to prepare. From an advertising perspective, there is a lot in these rules that could profoundly affect the discipline. In April, Wavemaker’s Andrew Spurrier-Dawes wrote a neat explanation of the likely impact of the Digital Markets Act for WARC.

Sourced from WARC, Reuters, European Commission. 

Brands need to balance service and price

Organisations are getting better at handling complaints, but the number of complaints continues to grow, according to new data from the UK’s Institute of Customer Service.

Why it matters

The scale of problems and complaints is hugely damaging to productivity, costing organisations billions of pounds in time, resources and lost opportunities. Rather than improving complaint handling, businesses might be better off addressing the source of the complaints.

Takeaways

• Some 17.3% of customers experienced a problem with an organisation, the highest level ever recorded in the UK Customer Satisfaction Index.
• More than a third of customers said they would pay more to guarantee excellent service.
• But 58% said low prices would be more important in influencing their choices over the next two years due to the cost of living crisis.

Key quote

“Maintaining a personal connection with customers will be central to customer satisfaction and well-being in the next year. This means being available to speak to customers, especially for complex or personally sensitive issues. It will require empathy, emotional intelligence and the ability to respond to a customer’s unique situation and needs” – Joanna Causon Chief Executive, Institute of Customer Service. 

Sourced from Institute of Customer Service

WARC Awards for MENA Strategy 2022: Juries announced

The WARC Awards for MENA Strategy jury includes experts from Procter & Gamble, Google, and Snap, as well as leading agencies such as Insignia, FP7 McCann, Grey Group, VMLY&R and Wunderman Thompson – chair of the jury will be Lianne Braganza, CMO for MEA at Cigna.

Since 2017 the Awards have sought out the smartest strategy from the region and across disciplines. The jury will award a Grand Prix as well as Gold, Silver and Bronze accolades. Entries can be submitted until 21 September 2022. More information about the Awards and how to enter is available here. Entry is, as always, free.

The full jury:

• Lianne Braganza, Chief Marketing Officer, MEA, Cigna - Jury Chair
• Remie Abdo, Brand Building & Integrated Communication Director, P&G, UAE
• Tala Arakji, Strategy Director, FP7 McCann, UAE
• Vishal Badiani, Regional Creative Strategy Manager, Snap, UAE
• Mongi Bhouri, Strategic Planner, Digitas Dubai, UAE
• Ali Cheikhali, Creative Strategy Lead, Google Creative Works, Google, UAE
• Mona Hassanie, Strategy Director, Wunderman Thompson, UAE
• Fabio Medeiros, Head of Strategy, VMLY&R COMMERCE, UAE
• Maria Parsons, Head of Strategy, Grey Group, Qatar 
• Matthew Turner, Strategy Director, Insignia Worldwide, UAE

The WARC Awards

The WARC Awards for MENA Strategy are part of a suite of WARC Awards, which also include the global WARC Awards for Effectiveness, and two other regional competitions – the newly launched WARC Awards for Effectiveness, North America Edition and the WARC Awards for Asia Strategy.

WARC Award for Asian Strategy 2022: Juries announced

The WARC Awards for Asian Strategy 2022 jury panel includes expert marketers from Colgate-Palmolive, foodpanda, Meta and TWD Life Insurance, as well as leading agencies such as Essence, DDB Mudra and FRED & FARID – Chair of the jury will be Dhiren Amin, CMO of NTUC Income.

Since 2011, the Awards have sought out the smartest strategy from across the region and across disciplines. The jury will award a Grand Prix as well as Gold, Silver and Bronze accolades. Entries can be submitted until 21 September 2022. More information about the Awards and how to enter is available here. Entry is, as always, free.

The full jury:

• Dhiren Amin, Chief Marketing Officer, NTUC Income, Singapore - Jury Chair
• Connie Ang, President Director & CEO, Danone, Indonesia
• Bea Atienza, Impactful Brand Experience Leader, Colgate-Palmolive, Philippines
• Jean-Paul Burge, Former Chairman & CEO, BBDO Asia
• Karen Ge, Head of Strategy, FRED & FARID Shanghai & Managing Partner, FLAWED, China
• Jan Harling, Director - New Customer Acquisition APAC, foodpanda, Thailand
• Matt Holland, Managing Director & Client Partner - Essence APAC, Singapore
• Astor Keung, Market Development Advisor, Shell HK Limited, Hong Kong
• Naho Kono, Group Executive VP & Chief Marketing Officer, Rakuten Group, Japan
• Anand Murty, National Head of Strategy, DDB Mudra, India
• Roche Vandenberghe, Chief Marketing Officer, TWD Life Insurance, Philippines
• Michelle Yip, Consumer Marketing Director, Meta, Singapore

The WARC Awards

The WARC Awards for Asian Strategy are part of a suite of WARC Awards, which also include the global WARC Awards for Effectiveness, and two other regional competitions – the newly launched WARC Awards for Effectiveness, North America Edition and the WARC Awards for MENA Strategy.

WPP sets sights on Japan’s seniors

There are opportunities for brands and marketers in targeting Japan’s ageing population, according to WPP’s country CEO. 

Context 

Japan’s population is in decline (the current total of 125 million is expected to sink to 100 million in 2053) and the population is getting older (seniors already account for more than 29% of the population and that proportion will hit 35.3% by 2040).

The market for products and services aimed at people aged 65 or older is forecast to grow to 101.3 trillion yen by 2025. That’s up 61% from 62.9 trillion yen in 2007.

Why it matters

“The good news is that [being] older or ageing, doesn’t mean you don’t consume things,” Kyoko Matsushita said in a recent interview with Kyodo News. “You actually have more disposable income or savings.”

But seniors are more selective about what they spend on, she added. “I think what you communicate is actually very important for more of the older generation because it has to be something they need.” That’s an important consideration for the agency’s clients which include Toyota and Sony. 

In addition to the ‘what’ of communications, there’s the ‘where’ to consider: online ads now account for 24% of ad spending while traditional media platforms make up a combined 29%.

Sourced from Kyodo News

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.”