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Marketing Through Volatility: Key takeaways from the most-awarded work of 2020

Many advertising and marketing industry awards were paused in 2020 but not all; a new WARC report, Marketing Through Volatility,  uncovers insights behind some of the world’s most-awarded campaigns of last year  – for creativity, media and effectiveness – and examines the strategies of brands that were notable in their response to the disruption of the past 12 months.

Marketing Through Volatility has been compiled using the WARC Rankings proprietary methodology.

Eight key takeaways

1. Urgency can create a space for innovation

The urgency to respond to the events of 2020 created a space for innovation for some brands, which pivoted their creative ideas while remaining highly recognisable.

2. Successful brands retain their authenticity through crisis

The most awarded brands have a strong sense of their brand, and they stay true to this in their messaging.

3. Bravery and risk-taking is often rewarded

The most awarded brands are commonly brave brands: brands that take risks and challenge category norms.

4. A strong brand purpose is sustained and consistent

2020 put a lens on the authenticity of brands and their overarching purpose. Many marketers are convinced that their consumers now prefer brands with a sustained, consistent purpose, applied across media.

5. There is opportunity in continued brand investment

Whilst there’s been a shift towards performance marketing over the past 12 months, evidence abounds that brands that continue to invest in brand-building through recessions see success.

6. Customer-centricity enables a rapid response to change

A focus on the customer has made it easier for brands to detect and respond to changes in consumer behaviour during and post-pandemic.

7. 2020 highlights the need for scenario planning and agility

The most awarded work of 2020 highlighted the benefits of scenario planning and being agile enough to pivot in the face of challenge.

8. Successful media strategies lie on a solid data bedrock

The need for solid first-party data strategies was accelerated by the pandemic, when the ability to target customers using connected and digital channels was paramount.

The full 2021 WARC Rankings  – Creative 100, Media 100, Effective 100  – will be released in November to allow the inclusion of a full set of show results, including those that were postponed or cancelled in 2020.

Hotel searches record year-on-year growth in March

Global hotel bookings and online searches recorded year-on-year growth in March 2021, for the first time since the start of the pandemic, according to data from the UNWTO (United Nations World Tourism Organization) Tourism Recovery Tracker.

Why it matters

Hotel-related online traffic has achieved growth for the first time in the past 12 months, while air bookings are still far from recovery. This might be a reflection of consumers’ preference to go on “staycations” or travel domestically. UK staycations, for example, are expected to hit a ten-year high and American consumers are most comfortable doing independent activities like road trips.

Takeaways

• Global hotel searches were up 18% year on year in March 2021, while bookings are up by 44%.
• South Asia is the only region experiencing growth in air reservations, rising 7%.

Sourced from UNWTO, WARC Data

Cable companies muscle in on mobile – flexibility key

Cable companies like Comcast, Charter, and Altice are growing their share of the American mobile phone market reflecting increased competition often based on giving users flexibility over their plans that has become a key aspect of successful service businesses in the pandemic.

Why it matters

The Wall Street Journal’s report on the rise of cable firm’s mobile businesses reflects the reality of these TV, Wi-Fi and landline providers struggling to keep customers on their books. However, with a lot of mobile browsing (around 60%) now done on Wi-Fi at home, cable firms are at slight advantage to wireless carriers who they can undercut. But flexibility  - one interviewee changes his allowance monthly depending on what he will use – is likely to be a key hangover from the pandemic, even in low-cost travel, auto, and now cellular, where the terms of competition have changed.

Details

• Cable companies are now looking to garner profits from their mobile businesses.
• While the scale of wireless carriers is nearly 50 times that of cable firms’ mobile businesses, they are being undercut by half in some cases.
• Still, market share remains in single figures and any significant gains will ultimately lead to large infrastructure costs.

Bottom line

With five million Americans now buying their mobile allowances from cable companies, following relatively young investments (the oldest, Comcast, began a mobile business in 2017), convenience is clearly important but how the cable firm’s fare as lockdowns ease will be key.

Sourced from the Wall Street Journal, WARC

TikTok unveils a suite of in-app e-commerce tools

TikTok, the video-sharing platform that has a strong following among young users, is reported to be planning to launch a range of new shopping tools and ad offerings in a bid to boost its e-commerce potential.

This is according to a leaked pitch deck seen by Business Insider and already submitted to various advertisers in the US.

The details

The first new option is ‘Collection Ads’, which will enable brands to combine their product catalogue listings and branded videos, so that users can be guided to relevant products from their video clips.

‘Dynamic Product Ads’, the second new option, automatically retargets users with relevant products according to their activity in advertisers’ apps and websites.

‘Promo Tiles’ will enable advertisers to add customisable sales and promotional alerts to their in-feed ads.

Finally, ‘Showcase Tiles’ allows video creators to promote products via a linked thumbnail at the bottom of the screen. This is similar to TikTok’s ‘Douyin’ app in China which now generates the majority of its revenue from in-app commerce rather than from ads.

TikTok also claims that it now has more than 100 million monthly active users in the US and 732 million globally.

Key quote

“Younger audiences [also] have a major impact on spending, even if indirectly, which is why these new e-commerce integrations are so critical and will play such a key role in the app’s future development” – Andrew Hutchinson, Social Media Today.

Sourced from Business Insider, Social Media Today

Microsoft takes a major step into the US healthcare market

Tech giant Microsoft this week acquired Massachusetts-based Nuance Communications for $16bn, which is reportedly up to 13 times Nuance’s fiscal revenue in 2020.

That Microsoft is prepared to pay such a sum owes much to the COVID pandemic exposing a need for the healthcare industry to become more efficient with its collection and distribution of patient data.

As a leader in speech recognition technology, Nuance could be a good fit for Microsoft, according to industry experts approached by the Wall Street Journal.

Why it matters

Tech companies, such as Microsoft and Alphabet’s Google, are increasingly looking to develop new markets and revenue opportunities by collecting and analysing patient data.

Services could include cloud-computing platforms and health activity-tracking apps, as healthcare shapes up to be the next battleground for the major tech companies.

With its purchase of Nuance, analysts say Microsoft will be well-placed to sell healthcare customers its more lucrative products and services, such as cloud-computing.

This appears to be Microsoft’s strategy because VP Gregory Moore will oversee the integration of Nuance into Microsoft. He previously headed up Google Cloud’s efforts to get into the healthcare market.

Microsoft also has an opportunity to integrate Nuance’s language-processing capabilities into products like Teams, its collaboration tool that is a key part of its Office 365 productivity software.

Key quotes

“This coming together is about empowering healthcare. It’s now very clear that healthcare organisations that accelerate their digital investments can improve patient outcomes and reduce cost at scale” – Satya Nadella, CEO of Microsoft.

“The pandemic response by the healthcare industry has proven the value of technology to healthcare delivery. All the digital giants are paying attention” – Gregg Pessin, senior research director at Gartner.

Sourced from Wall Street Journal

Farfetch: how a Western brand connects with China’s luxury shoppers

Farfetch, a British-Portuguese online luxury fashion platform, has made great strides in China after forging strategic partnerships with e-commerce giant Alibaba and global luxury group Richemont. The company also has alliances with Tencent and JD.com, benefitting from their expertise with WeChat, the Chinese messaging app.

Speaking ahead of next week’s Luxury Symposium event in Hong Kong, Alexis Bonhomme, Farfetch’s VP of commercial, China and APAC, discussed with Jing Daily the reasons for the company’s success and the challenges for the future.

Key takeaways

• Bonhomme said that China’s digital ecosystem is shaped by two main companies – Alibaba and Tencent – and Farfetch has been fortunate to get investment from both, which is rare for a Western company.
• Online luxury consumption was already significant in China before the coronavirus outbreak and it is bouncing back strongly post-COVID, with high demand for luxury goods, such as handbags and watches. Leather goods and jewellery are also strong-performing categories.
• Farfetch’s regular customers are relatively young, averaging 29-years-old in 2020, while its VIP customers are also younger than the industry average.
• An important part of Farfetch’s business in China relates to offering exclusive and premium experiences for “private clients”, including dinners and master classes as well as a dedicated WeChat official account. “When it comes to engaging with Chinese luxury consumers, personal touch and offline activations are essential,” Bonhomme said.
• In terms of challenges, he pointed to operating costs as well as the rival ‘Daigou’ cross-border exporting system. In addition, he said the cost of sales and marketing is significant in China.

Key quote

“China is the fastest-growing luxury market and also where trends and changes happen the fastest. You need to permanently adapt yourselves, rely massively on your team in the market, and leverage each opportunity. The day you stop innovating or stop being on an alert mode, you will go down” – Alexis Bonhomme, Farfetch’s VP of commercial, Greater China and APAC.

Sourced from Jing Daily

IPA Bellwether finds budget cuts easing and optimism growing

There are signs of recovery as cuts to UK marketing budgets are softest since Q1 2020, though pressures of lockdown restrictions remain.

As the UK’s vaccine rollout meets relaxed restrictions on the population, IHS Markit, which authored the IPA’s Q1 2021 Bellwether Report, expects a +3.7% expansion of GDP in 2021, followed by an even quicker rise of +5.8% in 2022.

On the back of this expansion, it forecasts a 3.5% increase in adspend for 2021 and 6.9% in 2022 to move toward the longer-term trend.

Key ideas

• A net balance of -11.5% of 300 panellists reported a contraction in total marketing budgets during the first quarter of 2021. While severe, this is substantially better than the -24% decline of Q4 2020.
• Looking at 21/22, a net balance of 17.4% of companies expect to see an increase in budgets for the next year, up from 12% in Q4 2020: the strongest growth expectations in the IPA Bellwether since 2018.
• How these increases are likely to be spent point to a return to the brand building trend that was accelerating pre-pandemic, as +10.1% of marketers anticipate increases in main media advertising, +7.4% in PR, and +6.8 in direct. Meanwhile, expectations around sales promotions were neutral.
• Further cuts in the coming year are expected: -28.4% of marketers expect to spend on events, while a -4.9% balance of marketers will spend less on market research.

Renewed optimism

• The IPA’s Bellwether panellists showed optimism for the first time since the beginning of 2015, with the balance of companies feeling more confident than Q4 +26.2%, up from -5.8%.
• Own-company prospects strengthened markedly, with a net balance of +36.6%, the strongest optimism for six years.

A picture of the future out of decline

Out of the continued drops in marketing spend, a picture emerges of how marketers and their companies are looking ahead by exploring where declines are slowing.

• Event spend: -43.2%, up from -62.9% in Q4 2020
• Market Research -17.8%, up from -25.0%
• Sales Promotions -16.2%, up from -26.5%
• Direct Marketing -11.8%, from -13.9%
• Main Media -8.2%, from -21.8%
• Public Relations (PR) -8.0%, from -8.5%

Key quotes

“Upbeat forecasts from UK marketers for the coming financial year, after the marked reduction in budgets through 2020, bolsters expectations for a post-pandemic recovery and bodes well for the UK economy. Without a doubt, the improvement in budget plans from the previous survey period will have been supported by the release of the UK governments roadmap to relaxing restrictions.” - Eliot Kerr, Economist at IHS Markit and author of the Bellwether Report.

“With companies’ confidence levels regarding their financial prospects soaring and with almost three quarters of UK companies either revising their marketing budgets upwards or keeping them the same this quarter versus last, the trajectory is very much moving in a positive direction and at a good pace.” – Paul Bainsfair, IPA Director General.

Sourced from the IPA

Tencent’s lessons from expanding overseas

The secret to successfully taking games into overseas markets boils down to one thing, according to Tencent marketing manager Man Zhou – understand the locals better than they understand themselves.

In a detailed description of how Tencent went about making Chinese games popular in Japan, Man points out that many key lessons in trying to grab a share of the global games market – estimated to be worth some $180 billion in 2020 – have come from getting things wrong in the past. 

Her conclusion is that a product can't be popular in a new market without accurate local insights, steady content marketing, and a carefully planned final release.

Three keys for success:

• Have an efficient international team, able to make use of localization insights, and “overcome the obstacles of time and space”.
• True insights into players comes from “thinking about and doing what players tell you they want”.
• Don’t focus only on big publishing platforms, but also on smaller and medium-sized ones, as these can offer incremental gains.

Key quote

“Both Chinese and foreign games share the same goal when trying to enter one anothers' markets: to maintain deep localisation insights into the publishing trends and statistics of the region they are targeting and to be more local than the locals.” Man Zhou, marketing manager of the global publishing department's product centre at Tencent Interactive Entertainment Group

Sourced from Games Industry

Univision and Televisa agree merger to build streaming titan

Two of the world’s leading Spanish-language media companies have announced a multi-billion-dollar merger, with the plan to challenge Netflix in the Spanish-speaking world. 

The $4.8 billion tie up between Mexico’s Televisa, the world’s most prolific producer of Spanish-language TV programmes, and Univision, the largest US Spanish-language network, will create the biggest Spanish-language media company in the world, combining bases in Mexico and the US.

The deal, expected to be finalised later this year, involves the two companies combining media, production and content, to create a new entity, Televisa-Univision, they announced. Univision will pay around $4.8 billion for Televisa's content.

The details

• Televisa produced around 86,000 hours of content last year, and each company has numerous rights to sports events. 
• Univision’s assets include the Univision and UniMás networks, nine Spanish-language cable networks, 61 television stations and 58 radio stations, as well as a recently launched streaming service, PrendeTV.
• The plan is to launch a global streaming service early next year, focused on a market of 600 million Spanish speakers, and challenging the likes of Netflix in the Spanish-language market.

Key quote

"We are creating a company which is a leader across multi-media categories, unified over the largest territories and with the scale and focus to deliver the most compelling content experience to Spanish-language consumers around the world. 

Sourced from the Hollywood Reporter

Women prefer mobile and puzzle gaming

Women now represent almost half of all gamers and they are more likely to be found playing puzzle-based or creative games on mobile devices, according to data from games insights company Newzoo.

Why it matters

Women now represent almost half of online gamers and this represents an opportunity for advertisers, as long as their communications are well-targeted. Around 70% of mothers, for example, play online games and this group is more receptive to advertising and more likely to recommend products to their friends.

This might be a missed opportunity, though, as WARC's survey of over 1,000 marketers finds that 40% of brands don't plan to advertise across gaming formats in 2021.

Takeaways

• 94% of female gamers play games on mobile, compared to 90% of male gamers.
• Two-thirds (66%) of female gamers play games on consoles.
• Women prefer puzzle-based games (44%) followed by games that offer the ability to make creative choices (31%).

Sourced from Newzoo, WARC Data