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Efficiency is the enemy of invention

Slack matters – and no, not the messaging app – but too often a mantra of ultimate efficiency pervades organisations, leaving professionals trying to fill every working second. Simply, it’s possible to make organisations more efficient without actually making them better, by eliminating space for experimentation or responsiveness.

Why it matters

Marketers and agency folk are no strangers to packed schedules, but this idea – fleshed out in a piece earlier this year on Farnham Street – hinges on the difference between efficiency (operating with minimum waste) and effectiveness (operating towards the best results). 

Slack, then is a degree of freedom that allows organisations to be more effective by ensuring a degree of organisational capacity that can be used for new ideas for the future of the organisation or even the ability to respond swiftly.

Details

• Management consultancy has created a vast industry around the idea of eliminating waste and making sure there are few excess resources.
• But hyper-efficient organisations have problems too: mistakes or unintended consequences have bigger effects. When a team member (or their child) gets sick, the whole team will suffer.
• Partly, it’s because humans are relentless optimists that tend to way underestimate how many tasks we can take on effectively and how long each one will take.
• People rarely have the same quantity of tasks to complete each day; most people depend on others.
• Moments of rest tend to allow people to think about whether they’re doing the right thing, rather than the first task they can take on in order to do something.

Key quote

“As a practical matter, it is impossible to keep everyone in the organization 100 percent busy unless we allow for some buffering at each employee’s desk. That means there is an inbox where work stacks up” – Tom DeMarco, author of Slack: Getting Past Burnout, Busywork, and the Myth of Total Efficiency.

Sourced from FS

Automation and real-time measurement are main benefits of programmatic

Automation and real-time measurement are the most widely reported benefits of programmatic advertising, according to research from AI company Alfi.

Why it matters

In a survey of senior advertising professionals worldwide, 72% say measurement is one of the most important benefits of programmatic advertising, followed by 67% saying the same for sophisticated targeting. However, this is being challenged by the growing push into data privacy – just a quarter of Apple users have allowed app tracking and WARC's latest research finds that 62% of marketers believe the 'death of the cookie' will significantly impact their mobile marketing strategy.

Takeaways

• In a survey of senior advertising professionals worldwide, almost all (94%) said automation was one of the most important benefits of programmatic advertising.
• Real-time measurement (72%) places second while sophisticated targeting (67%) follows close behind.

Sourced from Alfi, WARC Data

Shein’s rise and the shape of the global fashion industry

Chinese e-commerce Shein only sells outside of China, thanks to cross-border e-commerce and ultra-fast fashion, reveals a model that is almost impossible to emulate and is showing hints of future limits.

The marketing view

Founded by an SEO expert and former marketing consultant specialising in exporters, Xu Yangtian, the company relies heavily on influencers at all levels – from Katy Perry, down to micro-level Instagrammers.

But it’s a layer of proprietary tech that can make the difference. Using search data from its own app, Shein and its suppliers are able to draw on a deep well of information about styles and even materials.

Brands usually want to tell customers and potential investors all about themselves. Understanding that price can attract a young audience better than fashion cachet, the company is happy to keep quiet behind a concept that “everybody can enjoy the beauty of fashion”.

Give people what they are looking for, for less, is how Shein works

The non-marketing view

At the core of the firm’s success, however, are two decidedly un-sexy core competencies that give it a pricing edge:

• Supply chain: the company rose to fame for its data-driven trend spotting, combined with proximity to factories (mostly near Guangzhou) that it ranks by delivery time, investing in the fastest and cutting the slowest from their books altogether. Suppliers have to turnaround a garment from idea to delivery in 10 days. Curiously, it is also very quick to pay, meaning suppliers like working with Shein, despite the
• Tax: as Bloomberg explains in a new report, in 2018, amid the stirrings of a trade war with the US, China responded to US tariffs by removing export taxes for DTC firms. US tariffs also hit only high-value shipments, so most of Shein’s packages were able to enter the country duty-free after a 2016 rule change.

While the company’s hyper-aggressive model had been working, the trade war proved a catalyst, with sales doubling in the first year of the new rules and rocketed nearly 250% in 2020, according to an investor presentation seen by Bloomberg.

Competing with Shein’s manufacturing chops would be difficult to do while still retaining any margin on US operations, but for many incumbents, it’s their store presence that precludes this kind of move. Stocking yours or partner stores, usually through large shipments of more than $800, incurs duty fees.

Where next

There are possible limitations, however, as its sheer novelty means there is no playbook about how to take a company beyond selling ultra-cheap goods to teenagers. Bloomberg points to its bid for the UK retailer Topshop could provide a clue that a physical presence could be a crucial next step to growth.

Sourced from Bloomberg, WARC

What effectiveness means in 2021

A new analysis of the 2021 Creative Effectiveness Lions uncovers the trends and lessons about what first-class effectiveness looks like in 2021.

This is the subject of WARC and Lions’ Insights from the 2021 Creative Effectiveness Lions winners, a new report based on in-depth interviews with the award jury and a meta-analysis of all the entries. Non-subscribers can access a sample report here.

Behind the work

Key to many of the winning entries was a move away from tech for tech’s sake, and toward technology as an invisible enabler to creativity, a tool to make audiences, and ideally customers, feel something.

The biggest lessons surround creativity. Both at the level of bringing creativity to day-to-day briefs like driving app sign ups, and at the point where your creative is truly brave. Both drive results.

“Creativity is still the oxygen to growth,” says Jury President Ann Mukherjee in the report.

The Grand Prix

This year’s Grand Prix went to sports giant Nike’s Dream Crazy campaign. Fronted by the former NFL star Colin Kaepernick, who had been shunned by the league after taking the knee in protest against police brutality toward African Americans, the campaign took a side in a political conversation, demonstrating an understanding of both its audience and the athletes that represent the brand.

“Nike knew it needed to stand up for the younger generation’s values to really resonate with them,” explains Mukherjee. “By doing that, it was rewarded with business sales and market share.

Four takeaways

• Tech is creativity’s invisible enabler 
• Amplified experiences drive cultural impact
• Agile creativity benefits the whole funnel
• Belief-led bravery leads to commercial impact

The issues that define China’s millennials

China counts 400 millennials among its population, a generation born between 1981 and 1996 that is now solidly in adulthood and reflects deep changes in the country.

Why it matters

Across the world, millennials are no longer a synonym for capricious, late-teenage consumers who “love experiences” – with some now in their forties, the difference between the effects of becoming adults, and the particular traits of their generation are becoming clearer.

Details

As explored in a report by Insider, Chinese millennials’ have grown up in a time of economic acceleration in contrast to their American counterparts’ perpetual crises.

• These are the children of a generation that needed to survive, whereas millennials are more likely to experience leisure as a result of their hard work.
• The typical salary for a Chinese millennial is $22,000, around $1,200 less than the older generation.
• Online shopping is as much a hobby as a way of acquiring goods, with 77% of respondents to one survey saying shopping on Taobao was their favourite activity.
• They are under immense pressure to succeed. This involves, getting a job, buying a house, and ,with those credentials sorted, finding a spouse. If you also have a car, then you’ve hit another pillar of perceived success.
• Home ownership is incredibly common, but families will often scrape together whatever they have and plunge into deep debt in order to do this. The average millennial has $20,000 worth of debt, as a result. Still this is less than the typical US student loan debt, which ranges from between $25-40,000.
• Graduates tend to have little debt, with university fees much cheaper than other parts of the world and with parental savings common. Almost 100m millennials have bachelor’s degrees, making the job market for high-level roles intensely competitive.
• Attitudes to marriage are changing, with millennials marrying later, if at all. This is also indicative of greater educational and career opportunities for women.

Sourced from Insider

Square, Apple identify key targets in Buy Now Pay Later space

With acquisitions and partnerships, big tech firms are training their eyes on the emerging buy-now-pay-later companies, with Square, Jack-Dorsey’s fintech, acquiring Afterpay for $29bn, and Apple expanding its financial services with an Affirm partnership in Canada.

Why it matters

On the surface, this is big player involvement in a fast-growing area spurred on by the acceleration of e-commerce during the pandemic.

But for Square, a payments solution service for businesses, it reflects the competition among B2B firms like Shopify to offer financial services capabilities to merchnts. This kind of short-term, point-of-sale credit offer will now become the offer of Square’s clients, opening up more spending among traditional credit shunning young people.

Details

• On Tuesday, the FT reported that Twitter Founder Jack Dorsey’s other company, Square was buying Australian firm Afterpay in a $29 billion all-stock deal.
• Afterpay, like its European rival Klarna, and US competitor Affirm, offers interest-free instalment payments on relatively small transactions. However, it does charge late-fees.
• Square also operates Cash App, a mobile payment service that also includes cryptocurrency, savings, and investments. Afterpay will also integrate into this offer.
• In the same week, Apple announced a deal with Affirm to offer a BNPL option on its Canadian online and physical retail stores, according to Bloomberg.
• However, there are regulatory concerns surrounding these companies, which are currently enjoying a wild west.

 Sourced from FT, Bloomberg, WARC

Half of major brands have no presence on TikTok

TikTok has grown rapidly in popularity over the past two years but some brands are missing out, according to an analysis by video editor company InVideo.

Why it matters

Major brands like Google, Facebook, YouTube, IKEA, Nestlé, Audi and Toyota are failing to take advantage of TikTok's rising popularity. As the social platform expands into new audience demographics and becomes more important in a social commerce landscape, brands that do not engage their audience on TikTok will miss out.

Takeaways

• Of the more than 300 major brands studied, half had no posts (49%) or no followers (47%) while 40% had no TikTok account whatsoever.
• When videos are posted by brands, using humour is the most popular choice – about one-third of the videos analysed attempted to be funny.

Sourced from InVideo, WARC Data

The limits to YouTube’s TV ambition

Most advertisers continue to think of YouTube, the Alphabet-owned video streaming giant, as an online video play rather than a destination for TV ad dollars – key tools are missing.

Why it matters

Dollars are flowing away from TV worldwide as viewers find entertainment elsewhere, but Google’s cross-media deal making – it can sell a full package of display, search, and video in one fell swoop – is struggling to break Connected TV. With spending on CTV expected to rise 50% this year, this is a major growth area the company wants to target.

What’s happening

Brand and agency sources speaking to AdAge, who describe what’s missing as the following:

• Frequency management tools to control how often a single user is shown a particular ad.
• Campaign measurement on YouTube is incompatible with traditional ways of measuring TV.

In addition, others report issues of needlessly increased frequency as YouTube couples YouTube TV (its live service) into YouTube Select (its premium ad offering).

Brands on the move

Competitors have moved faster. Brands like snack giant Mondelez, quoted in the story, point to destinations like digital ad platform The Trade Desk and Roku as leaders in connected TV.

One key difference, still, is the brand safety question surrounding the sheer plethora of content that is the entire point of buying YouTube inventory, allowing you to buy audiences over content. Many brands still want to advertise against the kind of premium content that YouTube simply does not have.

What’s being done

Google notes a deal struck with Nielsen last year to measure connected TV campaigns on YouTube and YouTube TV, which is set to kick in later this year. The streaming service also hints to AdAge that more measurement partners are coming this year.

“We’re actively working with those partners to enable measurement of YouTube’s CTV reach, on a standalone, cross-device and incremental basis,” said Debbie Weinstein, VP of global solutions, Youtube, in an email to the magazine.

Sourced from AdAge, Nielsen

BVOD slows down Free-To-Air’s free fall in Australia: PwC

Australia’s linear TV revenue in 2020 fell 12.1% to A$3.1 billion as a sharp reduction in marketing budgets led to a fall in adspend across Free-To-Air but Broadcast Video on Demand (BVOD) mitigated that drop with 38.8% growth in revenue to A$229 million, according to PwC’s latest Australian Entertainment and Media Outlook.

Why it matters

The key media consumption locations – the lounge room, the bedroom and in transit – are changing dramatically as the era of specific devices having control over a specific location is over, with BVOD and SVOD (Subscription Video on Demand) growing at the expense of traditional media like cinema, and compounded by lockdowns that have forced Australians to stay home.

Five findings

• BVOD grew audience and ad revenue – average total monthly hours consumed rose by 39.9% YoY from July to December 2020.
• SVOD revenues set to grow at 20.4% CAGR through to 2025 to US$81.3 billion globally and A$3.3 billion in Australia.
• Factors driving SVOD and BVOD players and platforms are increased availability, sector breadth and catalogue depth.
• Increased competition between sports streaming services is seen continuing beyond 2021, in particular for football.
• The shift in weighting from ad revenues towards consumer-generated revenues has accelerated, forcing key players to rethink their business model.

Quote

“The lounge room – once the domain of linear television and appointment viewing – now offers consumers the additional options of streaming, broadcast and premium video on demand, as well as gaming, largely thanks to the growth in connected televisions and a much simpler user interface.” – Laurence Dell, PwC Australia partner and technology, media and telecommunications consulting leader

Amazon's ad business almost doubled last quarter

Growth in Amazon's advertising revenue has accelerated and is more than twice as fast as other business segments, according to the latest company reports.

Why it matters

Amazon's advertising business is growing rapidly and this shows no sign of slowing – 87% growth in Q2 2021 was more than twice as quick as the next-fastest growing segment. This is not just ad sales on Amazon's e-commerce platform, with digital TV rising in importance and likely to help future growth. As a result, strong advertiser demand has pushed up the cost of Amazon advertising.

Takeaways

• 'Other' revenue, which is primarily advertising sales, rose 87.5% in the second quarter of 2021 to reach $7.9bn.
• No other business segment grew by more than 40% in Q2 2021.

Sourced from Amazon, WARC Data

Publishers count the costs of a pandemic

New research points to significant shifts in the strategic realities of publishers, as the revenue diversification that was increasingly important in 2019 and the beginning of 2020 recede in importance.

Silver linings

As with other parts of the internet economy, many publishers saw their commerce interests increase in importance. While it is unlikely to plug other holes in the business model, the curatorial potential of trusted outlets could well continue to grow in importance.  

Method: Digiday polled 126 publishing professionals in July (Q3 2021).

Three key points

• Publishers are finding that directly-sold advertising has become significantly more important to revenue compared to a year
• Alternative revenue streams (events, etc.) playing a smaller role than 6-12 months ago. For instance, subscriptions, have remained mostly flat though they continue to provide a large revenue stream. Branded content’s importance has diminished.
• Affiliate links are increasingly key to publishers, with the percentage of respondents saying they provide a moderate amount of revenue rising to 30% from an earlier survey in Q1 2021.

Sourced from Digiday