The Feed

Alphabet, Meta and Amazon to take half of $1 trillion ad market in 2025

The global ad market has largely weathered the impact of COVID-19, so far, and is on course to reach a value of US$1 trillion in 2025, with more than half of this money paid to just three companies – Alphabet, Meta and Amazon – according to the latest Global Advertising Trends report from WARC Data.

Global Advertising Trends: Where is the money going?

• Following on from a meteoric 23.8% rise to a total of US$771 billion this year – the strongest growth in WARC's four decades of market monitoring – advertising investment is forecast to rise by a further 12.5% and 8.3% in 2022 and 2023 respectively, with e-commerce platforms set to lead this growth.
• A survey of 1,350+ marketing practitioners, carried out recently by WARC (before the emergence of the Omicron variant of COVID-19), shows that two in three marketers already committing budgets to Amazon are intending to increase that spend, while heightened advertiser demand is pushing up the average cost-per-click. 
  
• Two thirds of advertising professionals are planning to up spend on TikTok next year, while YouTube (61% of surveyed practitioners), Instagram (60%) and Google (57%) are also set to benefit from higher spend in 2022.
• All product sectors are projected to top pre-COVID investment next year, while most sectors were able to record a full recovery this year. Notable exceptions include transport & tourism, which led growth with an absolute increase of $12.5bn this year but this is still almost $2.9bn down on pre-pandemic spending levels.

WARC says 

“Despite potential headwinds, market data show that we are currently witnessing a boom in advertising trade like none seen before, led by increased demand for retail media and ancillary publishers such as Google and Instagram, which is now the world’s largest social platform. Our projections show that this trend is set to continue” – James McDonald, Director of Data, Intelligence & Forecasting, WARC.

Details of trends by media, format and product category can be viewed here.

Tech companies and trust – what Americans think

Facebook, WhatsApp and Instagram are among the tech brands least trusted by Americans, according to a Washington Post-Schar School poll; Amazon is the only brand to elicit trust from a majority of consumers.

What the poll finds 

When asked how much companies/services are trusted to handle their personal information and data on internet activity, 72% did not trust Facebook much/at all (56% also said Facebook has a negative impact on society); sister brands Instagram (60%) and WhatsApp (53%) also featured in the top four behind TikTok (63%).

YouTube (53%) and Google (47%) were followed by Microsoft (42%), then Apple and Amazon (both on 40%).

The flip side is how many people trust these names a great deal/a good amount and the contrast between Meta-owned entities and the others is stark. Twenty percent trust Facebook, even less WhatsApp and Instagram, while Google and YouTube come in at 48% and 35% respectively; Apple is on 44% and Amazon 53%.

A particularly revealing stat is that 72% believe their phones or tech devices are listening to them in ways they didn’t agree to.

Why it matters 

There’s a clear divide between less-trusted social media platforms and more-trusted businesses offering real products/services. Consumers are far more aware – and wary – of how the former especially are collecting and using their data, and they’re starting to fight back.

Among the eight in ten internet users who see targeted ads, 82% find them annoying while 74% say they are invasive. Eight in ten have also taken some steps to limit what data can be collected, the most popular being changing privacy settings on websites (57%), deleting web history (56%), altering privacy settings on phones/apps (50%).

Bottom line 

It seems that while many Americans don’t trust tech businesses (or the people running them) when it comes to privacy issues, they’re now so accustomed to using their platforms for everything from staying in touch to shopping that they aren’t about to abandon them.

Sourced from Washington Post

CIM warns of the danger of a digital skills gap

The digital skills of marketers are not keeping pace with developments in the industry, according to the latest Digital Marketing Skills Benchmark study from the Chartered Institute of Marketing (CIM). 

Why it matters

The 2021 study shows stagnation or decline across almost all digital marketing disciplines over the past year, ‘general marketing’ being the sole exception. While the pandemic may have hampered training efforts – for many businesses it was ‘all hands to the pump’ – it has also reinforced the need to keep up to date with marketing technology as consumers shifted more interactions online.

Key findings

• The majority of people fall into the lowest two quintiles in all but two disciplines.
• Analytics and Data has seen the largest decline in skills, partly explained by the growing complexity of digital marketing, new analytics options and changes in cookie rules. 
• Content marketing also saw a large dip in skills and was one of the largest groups of people in the lowest two quintiles. 
• Agencies have a higher percentage of respondents in the two highest quintiles of results than any other group.

Key quote

“The need to continue upskilling in order to just stand still was apparent before the pandemic; the risk now is that it will only continue to grow and the skills gap could become unmanageable” – Gemma Butler, director of marketing at CIM, speaking to Marketing Week.

Sourced from the Chartered Institute of Marketing, Marketing Week

Tackling plastic: The deodorant market sniffs the breeze

A sector that is worth more than $22bn globally, the deodorant market is a significant generator of plastic waste, but a new generation of brands is addressing this issue and mainstream brands can learn from them. 

What’s happening 

Niche brands have launched products that use a solid deodorant in a cardboard tube or refills wrapped in compostable paperboard that are inserted into a case you buy once. During 2021, major brands like Dove and Old Spice have also launched refillable products that can be bought at Target, Walmart, and Amazon. 

Why it matters

Cutting the amount of plastic pollution is clearly important, but it also raises several other issues for brands to consider. With many existing mainstream products based on liquid formulas or aerosols, the supply chain and manufacturing processes will have to be rethought, as will the packaging and branding. But there are also opportunities for brands to develop a closer relationship with consumers, as the refill model lends itself to direct to consumer (D2C) subscriptions.

Quote

“Brands have begun to really embrace the fact that packaging is a consumer touchpoint, so how they present their brand on the shelf is as impactful as how they present their brand in advertising” – Beth Egan, advertising professor at Syracuse University.

Sourced from Fast Company [Image:Dove]

India's state assembly elections expected to trigger surge in ad spend

India’s news channels are predicting a 20-25% increase in advertising revenue in Q1 when assembly elections are taking place in five states. 

Why it matters

TV news viewership generally increases during election periods, with commercial advertisers and political parties following. Outside of a general election this is normally limited to the states in question, but the presence of Uttar Pradesh – the most populous state and adjacent to the capital – in this round of elections gives them a national interest, so attracting greater interest from advertisers.

What it means

• Advertisers will spend Rs 500-600 crore incrementally on news networks from January until the day governments are formed, the CEO of one such network tells Exchange4Media.
• Government spending will also increase, with a proportion of that directed towards political campaigning ends. 
• Zee Media is predicting an upswing in spending of “at least” 20-25%. News Nation Network expected a similar increase in spending by political parties, with commercial advertisers coming in at 10-15%. 
• ABP anticipates offline and digital platforms will be used equally.

Quote

“Parties tend to behave like large corporates, making good use of TV, digital and local platforms like print, outdoor and radio” – Manoj Jagyasi, chief revenue officer at Zee Media.

Sourced from Exchange4Media

Sales and marketing teams have work to do as B2B goes omnichannel

McKinsey’s latest B2B Pulse Survey (November 2021) points to a rapid and irreversible shift to an omnichannel approach in B2B selling, with customers buying face-to-face, remotely and online; but many sales and marketing teams are not working together on this new reality. 

Why it matters

Over the past 20 months, e-commerce and remote video conferencing have become an integral part of B2B sales, but it’s about more than just shifting more transactions online. What B2B customers want is nuanced – and so are their views about the most effective way to reach them, according to consultancy firm McKinsey.

Key findings 

Some interesting statistics relating to the report include: 

• 94% of respondents regard today’s B2B omnichannel sales model as being at least as effective as the pre-COVID-19 model (up from 65% in April 2020).
• B2B customers regularly use ten or more channels to interact with suppliers (up from just five in 2016).
• E-commerce has overtaken in-person selling as a sales channel: it’s now at 65% compared to 53% earlier this year and 32% rank it as the single most effective channel. 
• Buyers are increasingly willing to spend big through remote or online sales channels: 35% are ready to spend $500,000 or more in a single transaction (up from 27% in February 2021).
• 80% of buyers are ready to shift their allegiance if performance levels aren’t met; they also demand real-time customer service, transparency online about product availability and pricing, and a consistent purchasing experience across multiple channels.
• 59% say they will buy from a supplier only if they’ve met in person at least once before.

The sales and marketing disconnect

More than half of McKinsey’s respondents said their sales teams either don’t fully utilise, or, worse, ignore content created by marketing. The consultancy advises stronger relationships at a senior level and more exchanges of personnel at a functional level in order to build greater understanding of roles.

Sourced from McKinsey

Arsenal FC rapped over fan token ads

Arsenal Football Club has been warned by the Advertising Standards Authority (ASA) that its ads for fan tokens risk trivialising investment in cryptoassets and could take advantage of consumers’ lack of experience in this area.

Why it matters

Sports teams and their playing staff are becoming increasingly involved in the promotion of fan tokens, a development which is pushing cryptocurrencies into the mainstream. The ASA ruling highlights both the responsibilities clubs have and some grey areas that they will have to address in future messaging.

What the ASA said

• The Financial Conduct Authority categorises fan tokens as cryptoassets and, as such, the ASA considers they could be used as a form of investment, regardless of how they are promoted. 
• Capital gains tax may be payable on profits from investing in cryptoassets. The ASA considered the potential tax implications were not made sufficiently clear to fans considering investing in Arsenal’s fan tokens.
• Ads need to make clear that fan tokens may need to be bought by purchasing another cryptocurrency.
• Ads should make clear that the value of investments in cryptoassets is variable and that cryptoassets are currently unregulated.

Sourced from Advertising Standards Authority 

_{[Image: arsenal.com]}

How LEGO supported the LGBTQIA+ community by releasing a new play set

LEGO, the toy manufacturer, demonstrated its long-standing commitment to diversity and inclusion by releasing its rainbow-coloured “Everyone is Awesome” set celebrating the LGBTQIA+ community.

Campaign background

• LEGO’s mission is to inspire and develop the builders of tomorrow through the power of play today and the brand encourages children and fans to build anything they can imagine.
• The brand strives to consider diversity from all angles – gender, ethnicity, background – and reflect the diverse and global marketplace it operates in.

The strategy

• Drawing inspiration from the Pride Flag, LEGO released its “Everyone is Awesome” LEGO set to celebrate the creativity of its LGBTQIA+ fans and their allies. 
• LEGO used its global brand platform and channels to show the LGBTQIA+ community that it valued and supported them.
• The campaign was developed in-house and rolled out organically across LEGO’s own channels, including social media and LEGO’s stores and website.

Making an impact

• The set’s launch generated coverage in lifestyle, national, LGBTQIA+, business, and Adult Fans of LEGO media, as well as across digital, print, radio and broadcast. 
• The “Everyone is Awesome” set received a huge positive response from the LGBTQIA+ community, with some members of the community even sharing how they had used the set to come out to their friends and family.

India TV ad volumes maintain growth

Television ad volumes in November 2021 were 3% higher than a year earlier and 31% higher than November 2019, according to figures from the Broadcast Audience Research Council.

Why it matters

Ad volumes normally pick up in November with the onset of the festival season (and this year will likely have seen an extra lift from cricket’s T20 World Cup which ran into the first two weeks of the month). But the figures highlight some interesting trends.

Key statistics

• Smaller advertisers were taking advantage: the top 50 registered a 24% growth over November 2019, while advertisers beyond the top 50 registered 44% growth.
• Ad volumes for the auto, textiles, retail, and personal accessories categories grew by two times over November 2019; banking, financial services and insurance (+62%) and e-commerce (+37%) also grew strongly, while fast moving consumer goods was 6% down on its 2020 peak.
• All regional language ad volumes have all increased since 2019; 2021 year-on-year increases include Telugu (+17%), Malayalam (+13%), Bhojpuri (+10%), Hindi (+10%) and Punjabi (+9%). 
• Health and hygiene business Reckitt Benckiser tripled ad volumes in 2020, but eased off slightly in 2021.

Quote

“Despite economic challenges that were accelerated with the second wave of COVID-19, legacy advertisers continued to increase spends on TV, and new brands placed faith in the medium to ensure that they were able to stay connected with their TG” – Aaditya Pathak, head of client partnership and revenue function at BARC India, quoted in IndianTelevision.com. 

Sourced from BARC India, Indiantelevision.com [Image: BARC]

Nike invests in 'liquid gold' of direct consumer connection

Sports brand Nike continues to wind down its wholesale activity and focus its attention on digital, where it sees a competitive advantage as it is “one of the few brands that can directly connect with and serve consumers at scale”, according to its CEO.

Why it matters

Speaking on a Q2 earnings call, John Donahoe explained how the brand is benefiting from trends the pandemic has accelerated – health and fitness, casual dress, and the shift to digital. “Digital is the engine driving our Consumer Direct Acceleration strategy,” he said. 

Takeaways 

• Nike Digital grew 11% in Q2 (ending November 30) and is now 25% of total Nike brand revenue (up 3 points on the year before and more than double the 2019 figure).
• The brand claims 79 million engaged members across the Nike ecosystem and reports that 40% of total digital demand is coming from the brand’s mobile apps.
• A partnership with retail company Dick’s Sporting Goods allows shoppers to link their respective accounts with the brands to unlock exclusive offers, products and experiences. Nike sees such exclusive access as a “defining marketing mechanism” to connect with consumers.
• Selling, general and administrative expenses grew 15%, driven by normalization of spend against brand campaigns, digital marketing investments to support heightened digital demand and strategic technology investments.
• Greater China quarterly revenue dropped 24%, partly because of supply issues, but Nike increased investment in demand-creation during Q2 by more than 40% versus the prior year and expects to see improvements in Q3.

Key quote

“The liquid gold for any brand is to have a direct connection with the consumer so that you can understand that consumer, you can engage that consumer and then you can serve them in a personalized way. And if you have a leadership position, you have more information with which to do all that” – John Donahoe, president and CEO, Nike.

Sourced from Seeking Alpha [Image: Nike.com]

Top brands spend A$400m on digital ads in 2021

Procter & Gamble, PepsiCo and Telstra accounted for more than a fifth of the A$400m spent by the top 20 digital advertisers in Australia in 2021, according to figures from digital marketing intelligence platform Pathmatics.

Why it matters

The details, published in the Australian Financial Review, highlight the shifts taking place in consumer lifestyles during the pandemic. Brand ad spending was directed into areas like home cleaning and hygiene products (P&G), snack foods (PepsiCo, Mondelez) and fast food (Yum! Brands, Hungry Jack’s), and telecoms (Telstra, Optus); supermarket chains (Coles, Woolworths) also featured significantly.

Key stats 

• Financial services: 62% of the $214m spent on digital advertising went to Facebook.
• CPG: 62% of the $170m spent went to YouTube.
• Pharma: 57% of the $81m spent went to Facebook
• Non-profit: 82% of the $27m spent on digital advertising went to Facebook.

Key quote

“With a large proportion of the country in and out of lockdowns, the consumption of digital media went through the roof, forcing marketers to retool and adapt to a predominantly digital world” – Eugene Du Plessis, ANZ regional director at Pathmatics.

Sourced from Australian Financial Review

Eventbrite evolves by staying close to customers

Eventbrite, the global ticketing and event technology platform, has survived the pandemic and lockdowns by getting closer than ever to its customers. 

Why it matters

Businesses often claim to be customer-centric but it’s rarely the immediately existential matter it became for many during the pandemic when in-person gatherings were banned. Go virtual is the obvious answer, but this requires taking a different approach, as MIT Sloan Management Review heard, and constantly adjusting that in the light of new data. 

Key insights 

• Eventbrite increased its connection to its customers in the early months of the pandemic as it sought to get feedback in near-real time. That prompted a rethink of the data and reporting being used in order to become more customer-centric.
• Part of this process entailed zeroing in on the data points that were most actionable, such as tweaking online journeys in response to changing search behaviour.
• Speed, flexibility and driving audience have been important points of focus given the need for organisers and creators to revive and rebuild their audience and their communities.
• Data – from external metrics, like COVID-19 rates, to internal metrics, like the number of searches on the platform for in-person events – were monitored down to city level to help predict when people would start to feel safe to gather again.
• Organisers need to adapt to a hybrid model that can accommodate virtual events alongside a new appreciation for in-person connection.

Final thought

“What’s most critical or actionable now might not always be. The data points that are the most meaningful to our business are constantly evolving as our business evolves” – Tamara Mendelsohn, chief marketing officer at Eventbrite.

Sourced from MIT Sloan Management Review