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WARC Talks: CMOs on 2024: Mondelez's Jon Halvorson on the future of CPG marketing

In an exclusive podcast interview for WARC’s Marketer’s Toolkit, Mondelez’s Global Senior Vice-President for Consumer Experience and Digital Commerce, Jonathan Halvorson, spoke to WARC’s Anna Hamill about pricing strategies through inflation, the artificial intelligence revolution, and brand purpose in a polarized world.

• If brands want to ultimately win in the CPG environment, they need to be very closely following their pricing and hitting key price points as well as investing in revenue growth management or RGM.
• Brands looking to win market share need to look firstly at winning in the digital commerce space, which is constantly adapting, and marketers must adapt with it.
• Brands that don't have a plan to be building their upper funnel assets through Gen AI over the next 1-2 years are going to lose.

Listen to the episode in full here 

Timestamps

01:51 – Jonathan’s role at Modelez.

02:27 – What’s driving Mondelez’s optimistic growth?

03:37 – How has inflation affected Mondelez brands?

09:58 – Branding building in digital commerce.

14:39 – Brand purpose at Mondelez

19:52 – Media and technology priorities for Mondelez.

22:54 – How is Mondelez using Gen AI?

30:07 – New skill sets that future marketers will need.

33:13 – Sustainability challenges facing Mondelez.

Further reading

Why Mondelez’s bullish growth is driven by the strength of its brands

The Marketer's Toolkit 2024

Introducing The Marketer's Toolkit 2024

The Marketer’s Toolkit 2024 has now landed: the thirteenth edition of the report dives deep on five emerging trends for the coming year using a new proprietary methodology alongside an extensive global survey – here’s what you need to know. 

WARC members can read the full report right here.  

If you’re not yet a member, you can find a sample of the report here.

Why the Toolkit matters

Based on a survey of 1,400+ marketers, in-depth interviews with CMOs, and WARC’s GEISTE methodology for trendspotting, the Toolkit provides strategic support for planning and decision-making to understand the challenges and opportunities for the year ahead. 

Why it’s useful 

Not just another forward-facing trend report, the Toolkit identifies five major trends for the year ahead, exploring the quantitative and qualitative data that WARC analysts used to establish these ideas. 

We then put these in context by surfacing highly effective examples of a brand response to each trend, CMO viewpoints, and practical takeaways.

Five trends

1. Unlocking the potential of Gen AI: Nearly three-quarters (70%) of marketers plan to unlock the potential of AI in their marketing. 
2. Preparing for the age of polarisation: 13% of marketers said the best strategy is to “drop all ‘purpose’ driven strategies and political positions”.
3. Masculinity in crisis: Almost two out of three marketers (63%) agree that the way they communicate with young men needs to change. 
4. “Sportswashing” is a growing concern: 61% of marketers concur that it is “very important” for sports organisers and owners to avoid being politically divisive.
5. Sustainability should be locally relevant: Nearly two-fifths (38%) of marketers are investing in local communities.

Taking on economic uncertainty 

“Marketers globally continue to be concerned about the economic picture with 64% of survey respondents seeing it as the biggest factor in 2024 planning. But a majority (61%) of firms expect improved business performance next year, up 10% from last year,” explains Aditya Kishore, Insight Director, WARC, and principal author of the report. 

You can read Aditya’s introductory essay to the Toolkit, Capturing growth in the YOLO economy, on WARC Opinion. 

The evolution of marketing

The Marketer’s Toolkit 2024 is part of WARC Strategy’s The Evolution of Marketing program, offering a series of practical reports designed to help marketers address major industry shifts to drive marketing effectiveness in the coming year. Look out for a series of podcasts and a webinar on the Toolkit in the coming weeks.

Brands can tap India’s e-sport sector

E-sport is gaining ground in India, and while it’s not about to challenge cricket as the nation’s sporting passion, it could soon overtake some other traditional sports in popularity.

Context 

In India, as elsewhere, gaming has become a mainstream activity. In parallel, e-sports consumption has grown, as games publishers invest to maximise interest. But one of the biggest games, BGMI (Battlegrounds Mobile India), was temporarily banned by the government amid security concerns because players were interacting with servers in China.

That was a problem for the sector, as the founder of e-sports streaming platform Loco told afaqs!: “What cricket is for Indian sports culture, BGMI is for Indian e-sports culture.” 

Why e-sport in India matters

With the lifting of the ban earlier this year, and the development of newer game categories in the interim, e-sports have picked up and viewership of tournaments is reported to be third in sport overall. Brands have a unique opportunity to reach and engage with this audience. 

Takeaways 

• There are some 440 million online gamers in India, with around a quarter of that number playing frequently. 
• A 2023 survey by Loco found almost half of respondents spent over an hour per game-playing session and that there is a growing willingness to pay for better quality gaming experiences. 
• Loco reports success with pay-per-view e-sports tournaments, but adds that frequency needs to be managed carefully and that leagues and franchises are the way forward.
• Mumbai is a hub for gaming houses: gaming companies find it easier to cut brand deals in the city, plus the presence of servers of popular games reduces latency time.

Key quote

“I believe, in some years, e-sports could surpass the viewership numbers of Kabaddi as it continues to solidify its status … e-sports can become the second largest sport in India in 3-5 years” – Ashwin Suresh, founder, Loco.

Sourced from afaqs!, Economic Times

Toolkit: Marketers gear up for a brighter 2024

Despite very real concerns about the economy, the majority of marketers around the world are optimistic and expect business to be better next year than this, according to a new WARC report.

The Voice of the Marketer 2024 is a deep dive into The Marketer’s Toolkit survey data of 1,400+ marketers worldwide.

Key findings

• Marketers are optimistic despite economic worries

Two-thirds (64%) of marketers indicated that economic recession will have the biggest impact on marketing strategies in 2024, while 41% highlighted inflation and the cost-of-living crisis.

Yet almost two-thirds of marketers (61%) expect that business will improve next year and 41% believe that marketing budgets will increase. In Europe and North America, just over a third expect budgets to be higher in 2024 (37% and 35% respectively). In contrast, half of marketers (50%) in APAC expect budgets to grow next year.

It would also appear that more marketers understand that maintaining or even increasing investment in brand marketing can be effective in navigating economic downturns.

• TikTok and YouTube up, X down

Marketers are planning to increase investments in online video (+66% net sentiment), social media +59%), and mobile (+51%), with spend expected to decrease in traditional channels like print (-41%), TV (-16%) and cinema (-13%).

TikTok and YouTube are the platforms expected to receive the biggest increases in marketing spend in 2024. A third of marketers (31%) expect to decrease investments in X, while far fewer anticipate increasing investment in the metaverse (just 11%, compared to 47% last year).

The advice to marketers is to diversify media investments and monitor new opportunities whilst safeguarding a brand’s reputation.

• Brands struggle to keep pace with evolving measurement

Four in ten (39%) marketers globally identified measurement as a top concern for 2024, increasing to 48% among those based in North America. Yet very few (4%) use all available marketing measurement methods in combination (brand lift studies, econometrics/MMM, experiments and attribution) and one-fifth (22%) admitted to not utilising any form of modelling. 

Over half (54%) of marketers view brand metrics (e.g. awareness, consideration, purchase intent) as having the greatest impact on their marketing strategy, above ROI (44%), sales (36%) and market penetration (34%).

The advice to marketers is to evaluate the different measurement tools available and incorporate different measurement techniques for a holistic view of marketing activities. 

A complimentary sample of The Voice of the Marketer 2024 is available to read here. The full report is available to WARC members. It follows the recent release of The Marketer’s Toolkit 2024, a report analysing the five key trends that will disrupt the marketing industry in the coming year: political polarization, the potential of generative AI, masculinity in crisis, “sportswashing”, and community-based sustainability.

Both reports are part of WARC Strategy’s The Evolution of Marketing program, designed to help marketers address major industry shifts to drive effective marketing. A third report, The Future of Media, will be released in January. Complementing the reports, a series of podcasts are also available.

The future of games is social

Games are the social networks of the future, Stuart Canfield, CFO at Electronic Arts, believes. 

“They are social, expressive, they need people to connect and share experiences,” he told a Nasdaq investor conference call. “You only have to think about social media three or four years ago, and how games are slowly navigating to that path,” he added. 

Context 

While gamers these days come from all ages, it is Gen Z and Gen Alpha who will determine the sector’s future direction. “They’re going to be the largest generations in history, they are the most socially expressive, they are the most engaged and they take entertainment as their primary form,” Canfield noted. 

Why gaming matters

Gaming is about far more than play, Canfield observed: “seventy-five percent of our audience today engage outside of play. They’re either watching, reading, writing, commenting, creating.” 

The aim for EA is to harness that community, to keep it engaged and to monetise it in different ways – including advertising and partnerships with iconic brands such as Marvel and Star Wars.

Takeaways

• The big titles are getting bigger and more time than ever is spent in games. 
• Mobile is an increasingly important platform for the industry, enabling players like EA “to continue to scale and reach in certain geographies, which represent an under-penetration for us today”.
• Creating opportunities for user-generated content “both enriches the engagement and a community and, by default, creates economic and monetisation opportunities for us”, said Canfield.

Sourced from Seeking Alpha

[Image: EA]

Aggressive pricing gives Temu advantage over competition

Temu, Pinduoduo’s international arm, is the Chinese e-commerce company with ambitions across western markets that go beyond its local rivals. 

Why Temu matters

Since launching in the US in September 2022, Temu’s international expansion has continued apace in response to an e-commerce slowdown in China. 

A costly exercise for the company, this drive has been a boon for digital media as Temu and rival Shein are thought to have hugely driven up spending on Meta.

Pinduoduo-owned Temu, in particular, is estimated to have spent $300m on launching its brand in the US in the first nine months of 2023, according to LatePost. 

What’s going on

The Wall Street Journal reports on the market activity that has seen the company steal the crown of China’s most valuable e-commerce firm from Alibaba on the back of soaring revenues up 94% year-on-year. 

• Known for low prices, its relationship with manufacturers has allowed it to cater to price-sensitive Chinese customers. 
• Its aggressive pricing, an advantage it enjoys over Alibaba’s third-party marketplace-focused Tmall, is helping it grow in new markets while following a similar path to profitability as in its native market. 
• The trouble is that the costs of doing business are much higher elsewhere, with vital aspects like delivery and online marketing significantly more expensive outside China, especially as it begins to compete with Shein in the US for the same price-sensitive dollar.
• It’s not going to be easy. The rise of platforms like Shein that sell at extremely low prices has drawn some scrutiny as to the ethics of the products sold on these platforms. It’s likely that this will only intensify as they move into the mainstream.

Sourced from the Wall Street Journal, WARC, Nikkei Asia, CNBC

Creating cultural advantage with local brand stories

With Gen Z sceptical of corporations, brands need to level up to attract, engage or retain them as employees or customers, while enhancing creativity and innovation to tell brand stories that are authentic and culturally relevant.

Why cultural advantage matters

Creativity and storytelling are necessary for a powerful brand story, but marketers also need high-quality input that recognises cultural nuances – not old constructs or outdated themes and tropes – in order to create an unparalleled advantage.

Takeaways

• Culture is not a gimmick, and the right mindset will guide you to be inspired by culture and how your brand can contribute to it.
• Brand custodians have to be self-aware about limitations when gathering inputs for strategic/creative development processes.
• Be cognisant that convening cross-functional teams requires extra time to acclimate to different working style or thought process.

^{[Image: Raimond Klavins on Unsplash]}

Amazon bags Aussie cricket rights 

From January, Amazon Prime will have the broadcast rights in Australia for all men’s and women’s International Cricket Council (ICC) tournaments for the next four years. 

Why it matters

The rights deal represents a major shift in the broadcasting landscape, as it is the most significant sports deal ever to go to a streaming service without an attached free-to-air partner, said the Sydney Morning Herald.

It’s a move reminiscent of Sky’s acquisition of cricket broadcast rights in the UK during the 1990s, which made immediate financial sense but which, its critics argued, endangered the long-term future of the sport by taking it out of the public eye. That won’t matter much to advertisers who will still be able to tap into a particular audience. 

Context

• Amazon’s deal, the value of which has not been disclosed, covers a total of 448 live games between 2024 and 2027. It is the fourth major broadcaster of cricket to Australian audiences, and the first that is entirely online.

• The announcement comes just days after the government said that major sporting events should be available on free-to-air services. 
• “All Australians regardless of where they live, or what they earn, should have the opportunity to enjoy free TV coverage of iconic sporting events,” said communications minister Michelle Rowland.
• More than 2.1 million Aussie cricket fans tuned in to see the national team beat India in the recent ICC World Cup Final, including 1.6 million on the free-to-air Nine channel. 

Sourced from Guardian, Sydney Morning Herald, Cricket Australia, The Full Toss
^{[Image: Cricket Australia]}

Brands will have to explain their green disposal claims

UK consumers are broadly accepting of green disposal claims in ads, but new research shows how little they understand the differences between terms such as ‘compostable’ and ‘biodegradable’. 

A qualitative study* by the Advertising Standards Authority examined the understanding of green disposal claims in advertising and found that there is a risk consumers have an oversimplified understanding of the terms used and how waste is disposed of.

Why green terminology matters

Ultimately, it’s all about transparency. Marketers may reach for a word like ‘biodegradable’ to reinforce their brand’s green packaging credentials, but if their understanding isn’t the same as consumers’, then confusion – or worse – can result. 

Participants expressed anger and frustration when they learned that ‘biodegradable’ could refer to an unlimited timescale and that some products can release toxins upon degrading – not what many had initially thought as they equated the term with ‘compostable’.

‘Compostable’ was also widely misunderstood, generating a negative response when it was explained that such packaging needs to be taken to a council facility rather than put in a domestic compost bin.

“Businesses need to work a lot harder to explain the difference,” Miles Lockwood, director of complaints and investigations at the ASA, told the Guardian. 

Takeaways

• People are proud of their efforts and see waste management as a way of “doing their bit” for the environment.  
• Participants were most focused on how they dispose of waste at home, and felt it was unfair to ask them to do more outside the home, such as taking recycling to specific drop-off points. 
• There were widespread calls for stronger transparency about the length of time a product that’s described as ‘biodegradable’ takes to degrade, as well as specific disposal risks.  
• Participants also emphasised the importance of having clearer information on the disposal of product parts, as well as where products need to be taken to be responsibly thrown away.

* Consumer Understanding of Green Disposal Claims in Ads

Sourced from ASA

Mental health among top 10 sustainability concerns in APAC

Mental health is a top 10 sustainability concern in Asia Pacific – rising to number seven in 2023 from 11th place in 2022 – as social and environmental concerns, including increasing poverty (#2), economic inequality concerns (#4), climate change (#1) and air pollution (#3) continue to worry all age groups and incomes in the region.

Kantar’s 2023 Sustainability Sector Index in APAC took its data insights from Australia, India, Indonesia, Japan, South Korea, the Philippines, Taiwan and Thailand.

Why sustainability matters

Businesses must become leaders in sustainability and work to solve the region’s growing environmental and social issues, shifting their current mindsets from sustainability as a cost and risk compliance, to one of value creation.

Key insights

• Mental health is now a top 10 concern in all markets surveyed across APAC except Indonesia.
• It is particularly critical in Australia (#1), the Philippines (#4) and Japan (#5).
• In developed markets like Australia and Japan (where inflation impacts mental health), poverty is also an important issue (ranked #4 for both).
• Poverty remains the top concern for developing countries Indonesia, Thailand and the Philippines, and ranks fourth in India.
• Nine in ten people in APAC want to live a sustainable lifestyle (88%) but only one third are actively changing their behaviour (34%).
• Six in ten are prepared to invest time and money to support companies that try to do good (58%).
• Over half seek ways to offset their impact on the environment (56%) and stop buying certain things due to their impact (52%).
• Particularly high levels of greenwashing are perceived across all sectors in APAC.
• An average of three in five people have seen or heard false/misleading info about sustainable actions taken by brands (60% vs 52% globally). It is highest in India (77%), the Philippines (76%) and Thailand (74%) but lowest in Japan (37%).
• Social media has the highest scores of greenwashing and social-washing, and it’s most associated with mental health issues.

Key quote

“The massive gap between intention and action hasn't gone away, which makes the role of companies to solve consumer sustainability tensions even more critical… Consistently high levels of perceived greenwashing and/or social washing across all sectors suggest that lack of trust is a big issue across the board” – Trezelene Chan, APAC Head of Sustainability, Kantar.

^{[Image: Total Shape from Unsplash]}

Research shows how to win at the Super Bowl ad game

With a US audience of approximately 100 million, the Super Bowl can be a showcase for breakthrough creativity, but winning at the Big Game also means paying close attention to what has worked in the past – and four years’ worth of System1 research gives advertisers an idea of what success looks like. 

Why past Super Bowl ads matter

From its expensive price tag – at $7 million for a 30-second ad – to the size, scope and game-day mindset of its audience, the Super Bowl is a unique yearly event and advertising moment. It requires advertisers to pay particularly close attention to what works within the game’s context.

Takeaways

• The highest-scoring Super Bowl ad of the last four years, according to System1 research, is “We got ya, baby” from diaper brand Huggies. One reason the commercial scored so well is that the brand is integral to the story.
• In a Super Bowl context, inclusivity can mean tapping into the collective consciousness, using celebrities and cultural touchstones that cut across a wide swath of a mass American audience.
• Brands with strong fluent devices that viewers can easily associate with a brand – like characters, sonic branding, logos, or other elements – should double-down on those.
• Even though employing branding early and often should be a Super Bowl advertising no-brainer, many advertisers fall into the trap of telling an emotionally moving, resonant story that leaves viewers guessing at what the brand is.

Key quote

“The Big Game is perhaps the only time of the year that some viewers actually tune in for the ads. But that doesn’t mean they’re being converted into customers, or even fans” – Andrew Tindall, global creative & media partnerships director, System1.

[Image: We Got Ya, Baby, Huggies]

CMO focus shifts from sustainability to AI

Sustainability was a stated focus of marketers in 2023, but it is being pushed down the list of priorities for 2024 as CMOs turn their attention to implementing AI technology.

That’s according to the 2024 CMO Barometer from Germany’s Serviceplan Group, based on responses from 767 marketing decision-makers across 11 countries in Europe and the Middle East.

Key findings

When asked how important they think certain (prompted) marketing trends will be in the year ahead: 

• 83% of CMOs identified AI, machine learning, and marketing automation as the biggest focus for 2024 (compared to 65% for 2023)
• 82% cited content creation
• 82% cited emotional branding
• 78% cited sustainability (compared to 85% for 2023, when it was the top priority).

Why marketing trends matters

CMOs face an increasingly complex marketing environment and are having to juggle multiple considerations. It will be important for them to not to lose sight of sustainability issues even as they grapple with the implications of AI.

Sourced from Serviceplan

WW isn't rebranding, says the CEO

WW, the wellness brand formerly known as Weight Watchers, has changed tack again, moving into the new area of prescription weight-loss drugs, but CEO Sima Sistani rejects the idea that it’s rebranding for the second time in five years.

“I think of it less as rebranding and more that we should be changing, we should be evolving,” she told CNN. “You can’t be around for 60 years and still be the same thing – our whole world has shifted.”

A reappraisal 

• Back in 2018, there was a definite rebrand as the company shifted from a diet-based business to a wellness-focused one and changed its name. 
• The current move seems similarly significant, not least since it comes with an apology for past mistakes: “contributing to the shame” that some members would have felt if they followed a WW program but found it didn't work for them.
• “For many who are living with obesity, it’s a chronic condition, and therefore it is not a choice,” said Sistani. “We got it wrong: in the past, we’ve been treating these medications like it’s a vanity, and it’s not – it’s lifesaving.”
  

Why WW? 

• While weight-loss drugs can be obtained from a doctor, patients won’t get the sort of package that WW will be offering.
• “Many doctors don’t have training in nutrition, obesity care management, and nor do they have the support system to basically help throughout the journey,” said Sistani. 

Sourced from CNN

[Image: WW International]

Netflix gets serious about gaming with Grand Theft Auto

Netflix will bring one of the biggest gaming franchises to its subscribers in the form of three hugely popular Grand Theft Auto titles for mobile, a move indicating that the streaming giant is applying a similar theory of growth-driving IP as in its TV content. 

Why gaming matters

Netflix has been testing the water in gaming since 2021 and has just shy of 250m subscribers. The conversion of even a fraction of these to its gaming services would make it one of the world’s largest players outside of the console realm. Whether or not Netflix shows people ads, the cultural sway of gaming is colossal and the opportunities to engage are both broader and deeper than putting ads around content. 

What’s really interesting about this move is that its typical gaming output has typically centred on its own IP while the strength of its content library is deeply dependent on licensed content. 

By licensing one of gaming’s biggest and most narratively rich franchises, Netflix is expanding its theory of content to new and important markets. 

What’s going on

According to a press release from the company, “Rockstar Games’ Grand Theft Auto: The Trilogy – The Definitive Edition is coming to Netflix on December 14 for Netflix members on the App Store, Google Play, and in the Netflix mobile app.” As yet, games are only available to full subscribers rather than ad-supported users.

• This includes GTAs III, Vice City, and San Andreas, and will be available to Netflix members “without any ads, in-app purchases, or extra fees”. 
• So Netflix isn’t going to carry the most up-to-date version of the game, but it will bring its subscribers access to three cult gaming hits of the 2000s. 
• But with anticipation building toward the release of GTA 6, and a deeper transition toward live games that persist with add-ons over a number of years, Netflix is well placed to catch a wave of GTA interest.

In context

Netflix’s gaming activity began in earnest in 2021 – bolstered by the acquisition of a games studio in 2022 – so the opportunity for the service to seriously enter gaming, cloud-based or otherwise, has been clear. Some studies have found that those who have downloaded its games have been satisfied, even if they have remained a minority. 

“We’ve got ambitious plans [in gaming]”, explained Netflix Co-CEO Greg Peters in a Q3 call with investors. “We want to really grow our engagement by many multiples of where it is today over the next handful of years.” 

This includes across devices, with the company announcing tests of games on connected TVs and computers back in August of this year, using phones as the controller.

Sourced from Netflix, WARC, Variety, Financial Times 

[Image: Netflix/Rockstar Games]