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Netflix pivots with retail business

As the phenomenal growth of Netflix shows signs of easing relative to its rivals, the video streaming service is taking to the world of e-commerce with its own online shop.

On sale at Netflix.shop, the world’s biggest streaming service offers Netflix-logoed underpants, hoodies, necklaces and charms. Unlike a number of competitors, like HBO Max and Hulu, Netflix has no ads, its revenue reliant instead on the monthly fees paid by its 200 million-plus global users.

The move comes as the brand has made serious efforts to expand the retail side of its business over the last year, The New York Times points out.

The details

• Netflix’s consumer products team has grown from 20 to 60 people and the company has done deals with Walmart, Sephora, Amazon and Target to sell everything from clothes, and beauty kits, to toys and houseware products.
• The new store, described as a “boutique”, will feature only a limited merchandise related to popular Netflix shows initially, with Lupin, a French crime series being featured later this month. Along with Lupin caps, hoodies and sweaters, the more dedicated fan will also be able to splash out on throw pillows at $60 each, and even a side table for $150. Day one will highlight products related to two anime series, Eden, and Yasuke. A clock incorporating the Yasuke character Haruto will be on sale for $135.
• The shop is no doubt at least partly inspired by the fact that a demand was clearly not being met, at least not by Netflix – thousands of fan-made products linked to the hugely popular show Tiger King are selling on Etsy and other sites. Products include candles, face masks and greetings cards. None of these products are linked to Netflix officially. 
• Netflix has, however, teamed up with various clothing companies for individual products, such as a clothing and accessory line launched with H&M featuring the popular rom-com, To All the Boys I’ve Loved Before. 

Key takeaway 

Official sales of merchandise linked to shows, films and fictional characters were worth an estimated $49 billion in the US in 2019, according to the trade group Licensing International. Globally, that figure was $128 billion. Dwarfing all other players was, of course, Disney.

Sourced from the New York Times

Ferrari seeks lifestyle brand position with fashion line

Already associated the world over with the epitome of style and sophistication, Ferrari is aiming to take its brand into the world of fashion.

Its ready-to-wear collection, which is aimed mainly at the young, will sport plenty of Ferrari logos, including, of course, the brand’s famous Cavallino prancing horse, and the name “Ferrari” worked into knitwear and shirts. The collection will be launched on a real-world catwalk event in the supercar maker’s home of Maranello, the FT reports.

The details

• The launch event, on June 13, will coincide with a “Ferrari Experience”, inviting guests into the brand’s new fashion boutique. Items in the collection, which Ferrari is stressing is made in Europe, range in price from €120 for a T-shirt bearing the Ferrari logo to €3,000 for a coat with a hood. The collection is aimed across the board at men, women and children, but has an emphasis on the younger fashion buyer.
• Moving into fashion is part of a wider plan of Ferrari’s chief brand diversification officer Nicola Boari, to “reach out to a wider audience and create business opportunities that are meaningful”. Boari says the company is entering the fashion sector “as a lifestyle brand [which will be] integrated with the core business”. And it follows Ferrari’s earlier announcement that it aims to increase the non-motorsport side of the business to around 10% of total company profits within seven to 10 years.
• The launch also comes hard on the heels of Ferrari’s controlling shareholder, the Agnelli family’s holding company, Exor, taking a 24% stake in luxury shoemaker Christian Louboutin for €541, along with an €80 million majority stake in the Chinese luxury brand Shang Xia.

Key takeaway

Ferrari is certainly not the first car marque to step into the world of fashion – Mercedes-Benz collaborating with Louis Vuitton designer Virgil Abloh is one example; but Ferrari’s dedicated fashion line with an eight-strong, in-house team of designers is something quite new.

Sourced from the Financial Times

Over one-quarter of Gen Z follow influencers

Gen Z follows influencers on social media almost as much as they do brands, according to a consumer survey of internet users across 47 countries from target audience company GWI.

When comparing brands and influencers following, it emerges that Gen Z is almost as likely to follow brands as they are to follow influencers, with only 5 percentage points of gap (33% who follow brands and 28% who follow influencers). This gap is almost three times as much for all other generations, between 13 and 15 percentage points.

Why it matters

Almost one-third (28%) of tech-savvy Gen Z follow influencers on social media, but they have specific preferences: they don’t respond well to celebrity influencers, but rather prefer raw, unfiltered content that brings real credibility to brand endorsement. Therefore, influencer marketing can be a powerful addition to the marketing mix if used in conjunction with other brand-building efforts.

Leading campaigns that leveraged these elements correctly saw a consistent return on their ad spend – Timberland, for example, witnessed an increase in sale by 258% after leveraging younger consumers’ interest in nature.

Takeaways

• One-third of Gen Z, millennials and Gen X subscribe to social media accounts of brands they purchase from or are interested in, with millennials leading at 36%.
  
• Gen Z is almost as likely to follow brands as they are to follow influencers (33% versus 28%).

Online fashion greenwashing on plastics

Online fast-fashion stores are ‘greenwashing’ their images, a new study says, by highlighting the small sustainable ranges they produce while the bulk of their output is still made from petrochemicals.

What the research found 

The Royal Society for Arts, Manufactures and Commerce (RSA) analysed over 10,000 recently added items from across some of the UK’s leading women’s fast-fashion websites for its report Fast Fashion’s Plastic Problem. 

• On average, 80% of items contained new plastic, while 49% were made entirely of new plastics such as polyester, acrylic and nylon. In some stores just 1% contained recycled fabric.

• Across the four brands analysed (Asos, Boohoo, Missguided and PrettyLittleThing) new products were, on average, 61% plastic.

Why it matters

Most people (76%) want to see fewer plastics and petrochemicals used in the production of clothing, but there is an “awareness gap” when it comes to understanding how much plastic is used in clothing. 

RSA takeaways

• Fashion brands need to do more to promote second hand clothing and explore different business models, while also offering greater transparency around the extent of their plastic use.
• Consumers need to shop more consciously: buying less and buying better and also caring for and repairing current clothing.
• The government should explore a per-item ‘plastics tax’ on clothing imported into or produced in the UK containing virgin plastics.

Sourced from RSA

Amazon ad rates soar on rising demand

If online e-commerce generally was one of 2020’s big winners, then it’s perhaps not entirely surprising that Amazon has had, and is still having, a rather good pandemic - Amazon’s search ad rates reflect this. 

Demand for advertising has rocketed, according to research from MarketPlace Pulse, and this has driven up advertising rates on the e-commerce giant’s platform by over 50% in May, compared to the same month in 2020.

The details

• Advertising on Amazon now costs, on average, $1.20 per click. That’s up 30% from $0.93 at the start of the year and up over 50% year-over-year. The lowest price was $0.70 in May last year, when the pandemic caused disruption to many supply chains, which resulted in a number of brands running out of stock and so cutting advertising. 
• Global shoppers are expected to spend an estimated $578 billion on Amazon. The report says its findings of increasing ad rates are not confined to the US, but consistent across markets globally.
• Amazon has turned most widgets on its site along with those in its app into paid-for advertising inventory. Big brands are increasingly spending more of their advertising budgets with Amazon, researchers found, and the result is they can afford to compete for limited ad space, and this bidding drives up prices further. The report points out the same thing happened with Google and Facebook.

Key quote

“Prices will continue to rise over time. Smaller brands trying to enter the market, it will be increasingly expensive to do it when they are up against established brands who are willing to pay to protect market share.” Juozas Kaziukenas, founder and chief executive officer of Marketplace Pulse, speaking to Bloomberg.

Sourced from Marketplace Plus, Bloomberg

Volkswagen’s self-driving media play

Volkswagen’s autonomous vehicle plans are media plans - here’s why that matters. 

The german car giant estimates that the price of peace of mind is $8.50 for both self-driving and media offers. VW is also planning subscription models for a full set of digital features in its electric cars, including access to video games, allowing drivers to while away the minutes while re-charging their vehicle.

The details

• VW is reported to be exploring an hourly fee once all the features it intends to offer with its autonomous cars are in place; and it’s apparently looking at a range of subscription models for its electric cars, too, including “range or performance” increases that will be available on daily or even hourly packages.
• VW board member Thomas Ulbrich told Die Welt newspaper that initial subscription features will be available in the second quarter of next year, including video games, although VW won’t be producing the games itself. “In the charging breaks, even if they only last 15 minutes, we want to offer customers something,” Ulbrich said.
• As more parts of a car are managed through software, it becomes possible to opt in or out of many – and be charged accordingly. VW’s chief sales officer Klaus Zellmer says the company envisages subscriptions eventually earning hundreds of millions of euros in additional revenue. But it is autonomous-car subscription packages that VW, along with other carmakers, are eyeing as the real money makers. These could include the option, during a journey, to pay in order to go fully autonomous for a limited time, before once again taking control of your car.

Key quote

 “In autonomous driving, we can imagine that we switch it on by the hour. We assume a price of around seven euros per hour. So if you don’t want to drive yourself for three hours, you can do it for 21 euros.” Klaus Zellmer, Volkswagen chief sales officer

Sourced from Ars Technica

E-commerce to account for over 8% of FMCG sales in 2021

More than 8% of global FMCG sales will be from online channels this year, according to research from Kantar, GfK, IRI and Intage. This is double the level in 2018 (4.2%) and up from 6.5% in 2020.

Why it matters

Online is a rapidly growing channel in the FMCG category but its share of sales value varies significantly across markets, with highs in Mainland China and South Korea and lows in much of Latin America.

Kantar adds that the key challenge for online FMCG brands is driving loyalty and winning share among lower spend trips. WARC's latest research into customer retention argues brands should tilt the balance of investment toward acquisition as this can also help with retention.

Takeaways

• Online FMCG sales grew the most in markets where the channel is already well established – its share grew 6.4 percentage points (pp) in Mainland China, rose 3.3pp in South Korea and increased by 3.6pp in Great Britain.
• Rising penetration has helped drive online's growth – 67m more households bought their grocery shopping online at least once in 2020.

Sourced from Kantar, GfK, IRI, Intage, WARC Data

All In census reveals extent of inclusion problem in advertising

Improving representation of black, disabled and working-class people within the advertising sector is a priority, leading figures say, following the results of a major survey into the make-up of the industry’s workforce.

The All In Report, published by the UK industry’s Inclusion Working Group, formed by the Advertising Association, IPA and ISBA, surveyed some 16,000 advertising professionals, representing, it is believed, just under 20% of the UK’s ad industry population.

The details

• Just 1% of black professionals are in C-suite positions in advertising, compared with 3% in the general population. And disabled people are also underrepresented in the industry generally, making up only 9% of the workforce, compared to 20% of the general population. One in five advertising professionals went to fee-paying schools, compared to just 8% of the population outside the industry; and 64% of advertising professionals have parents who were also professionals. Outside advertising, that is true for just 37% of people.

• Mental health appears to be a widespread problem in the industry with 31% of those surveyed saying they felt stressed or anxious. The picture of women in the industry also highlighted areas to improve – over half of women felt that taking maternity leave disadvantaged their career, and there is also a 10% pay gap between the genders at senior manager level and up; 12% of women said they experienced sexual discrimination and only 38% felt able to report discrimination against others – this dropped to 26% when the reporting personal discrimination.

• Despite these failings, the survey also uncovered some positives – 83% of executives believe their company is taking concrete steps towards greater inclusivity; and ethnic minorities are actually overrepresented in advertising, accounting for 16% of the workforce, despite only making up 12% of the UK’s working-age population. And, among 18 to 24 year-olds, minority ethnic staff make up 25% of the industry.

Key quote

“It is now time for action. Our census results have provided the benchmark data we need and the way forward is clear. We urge all companies in our industry to engage with the All In Action Plan to help make rapid progress on these critical areas. Everyone deserves a workplace where they feel included and it is in our power to make that happen now. The benefits, social and economic, will be huge as we build our way out of the pandemic” – Kathryn Jacob, CEO Pearl & Dean and Chair, Inclusion Group

SEA e-commerce dips: Ramadan and another year of COVID-19

For a second year in a row, Muslims in Southeast Asia had to observe Ramadan under the COVID-19 cloud and technology company Criteo has found some shifting e-commerce patterns in the 2021 holy month, from 12 April to 12 May, compared to last year.

Why it matters

Southeast Asian e-commerce underperformed this year compared to last year’s Ramadan period, with a notable dip observed in the final week of the holy month suggesting consumer caution in spending amid the ongoing economic downturn.

Key insights

• Mobile sales saw the largest lift throughout Ramadan in 2021, with a 107% surge at the end of the religious period on 12 May.
• Earlier on 1 May, app sales rose by 60%, while desktop sales saw the smallest spike of 40% during the second week.
• Only two categories posted growth from pre-COVID Ramadan in 2019: fashion/luxury and mass merchant products.
• Fashion/luxury outperformed mass merchant products during Ramadan, up 50% from baseline from 23 April to 5 May.

Sourced from Criteo

Report for travel and hospitality brands: Media quality in APAC

It is important to maximise media effectiveness when global travel re-starts post-pandemic and adspend is ramped up. Digital media measurement company DoubleVerify analyses the trends in the travel and hospitality sector across fraud, viewability, and brand safety and suitability.

Why it matters

Fraud continues to be a concern for digital advertisers in the travel and hospitality industry, with a 20% higher post-bid fraud rate for the sector compared with all other major industries. 

Key findings

• APAC saw the highest increase in ad fraud rate compared to the EMEA and NA regions, spiking 81% year on year in January 2021.
• Travel advertisers’ brand suitability violation rate rose by 82% – APAC was lowest (52%), versus EMEA (+87%) and NA (+88%). 
• Travel ads’ viewability rates lags behind major verticals, with APAC display viewable rates 11% lower for travel advertisers.

How Fintech is changing marketing in financial services

The COVID-19 pandemic has had a profound effect on the way millions of consumers interact with banks and other financial institutions. And those businesses have changed in response, says The State of Finance App Marketing, a report by AppsFlyer. 

Financial technology, or FinTech, apps are in huge demand. Global downloads for all kinds of financial institutions are up 132% since 2019; the UK alone saw an increase of 129% in 2020 last year. Globally, FinTech marketers’ customer acquisition spend last year hit $3 billion, says the report.

The details

• Installs of digital banking apps specifically are up 45%, in 2021, between Q1 2020 and Q1 2021, showing more than double the growth of traditional banking app installs, though the traditional apps have been gathering momentum in the early part of this year.
• After a 32% drop in spending in Q2 2020, as the global pandemic took hold, marketers focused on remarketing in Q3, and by Q1 2021, conversions showed growth of over 300%. Overall, the growth of non-organic installs continued to rise, with 172% growth between 2019 and now.
• Demand for finance apps continues to rise around the world. Of the top 40 finance markets (by app installs), 29 saw growth of at least 20% year-on-year. 
• Developing markets experienced the most spectacular growth. The average number of downloads in these markets was 70% higher than the average in developed markets, with the combined number of downloads in India, Brazil and Indonesia amounting to almost half the total number of downloads globally. 

Key quote

"FinTech experienced rapid digital transformation over the last year, with the pandemic leading to a shift in mindset even for those that have been slow to adapt. Marketers should strive for efficiency with their spend by following the rising cost-per-install trend and focusing on user acquisition to meet new demand. Marketers should also explore more affordable remarketing campaigns to keep their brand top of mind amid rising market competition" – Shani Rosenfelder, Head of Content & Mobile Insight, AppsFlyer

Sourced from AppsFlyer

One in five consumers now trusts the healthcare industry more

Half of consumers, globally, think that trust is important in the healthcare industry, according to a consumer survey by consultancy Morning Consult. Four in five trust their doctor to do the right thing and one in five trusts health companies more than they did one year ago.

Why it matters

The health care industry is in a unique position: on one hand, marketing messaging tends to be unemotional due to the high level of industry regulation; on the other hand, the essence of this industry is dealing with life and death and cannot be treated as any other marketing category.

The COVID-19 outbreak has created an opportunity for the industry, particularly the pharmaceutical sector, to create a more positive brand image: in fact, one in five consumers trusts the industry more than they did one year ago. Now, brands need to take advantage of this peculiar moment, for example by demonstrating purpose and creating distinctive brand assets.

Takeaways

• Half of consumers globally think that trust is important in the healthcare sector.
• One in five respondents reports that they trust health companies more than they did one year ago.
• On average, four in five consumers globally trust their doctor to do the right thing, but this falls to two-thirds in China and South Korea.

Sourced from Morning Consult, WARC Data

New tool will help agencies cut carbon footprint of media plans

The Institute of Practitioners in Advertising (IPA) has launched a new tool that aims to help agencies signed up to its Media Climate Charter measure and, in turn, reduce the carbon impact of their media plans.

What’s it about?

The charter is part of the IPA’s drive to assist agencies to work towards a zero-carbon future and is housed on a new IPA hub. A core feature is the carbon calculator tool, which allows measurement of the overall carbon footprint of a campaign that media agencies plan and buy for clients across all channels.

It identifies where the climate impact of campaigns could be reduced by calculating carbon emissions associated with a media plan based on the media mix, using a variety of data sources, including DEFRA electricity emissions factors and device power outputs and energy intensity.

Context

The Charter addresses one of the five key areas highlighted by the cross-industry Ad Net Zero programme, which aims to cut the carbon impact of developing, producing and running UK advertising to real net zero by the end of 2030

Agencies already signed up to the IPA’s Media Climate Charter account for more than £7bn in 2020 media billings, according to Nielsen, and this figure represents almost 90% of billings from Campaign’s Top 50 media agencies.

Key quote

“The UK government has set a net-zero target by 2050. For an industry that prides itself on being future facing, we have a clear opportunity to help bring a brighter future forward” – Rob McFaul, Chair of the IPA Media Climate Action Group and client director at Mindshare.

Sourced from IPA