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COVID-19 One Year On: brands focus on agility, innovation and effectiveness
COVID-19 One Year On: brands focus on agility, innovation and effectiveness
COVID-19 has led to a 30% increase in digital consumption and the formation of new and lasting consumer habits, according to the latest Global Advertising Trends report from WARC Data.
COVID-19 One Year On outlines the shifts that have taken place across e-commerce, social media, online video and gaming for brands and consumers.
E-commerce: $900bn more was spent at online retailers last year
The move to online retail has ingrained long-term habits. Brands are investing more in e-commerce advertising, which grew far ahead of the wider online ad market last year – a trend set to continue even as high street footfall increases in 2021.
Meanwhile, the growing popularity of ‘buy online for pickup in store’, being used more by between a quarter and a third of adults in the US, Mexico and India, indicates flexibility and convenience will be a key consumer strategy in the future.
Social media: TikTok was the social winner of 2020
TikTok is now the social app with the highest level of user activity, having overtaken Facebook for the top spot in Canada (TikTok users spend 17 hours a month on the app), France (17 hours), the UK (20 hours) and the United States (22 hours).
A survey for WARC’s Marketer’s Toolkit 2021 found 44% of brands expect to increase spend on TikTok this year, ahead of Facebook’s 39%.
Online video: YouTube, social video and brand integrations lure ad budgets
Online video is eroding linear TV advertising and now accounts for a quarter (26%) of the global video ad market. More than a quarter (27%) of YouTube consumption is via connected TV devices, which now poses a direct challenge to linear TV activity.
Audiences, however, care more about quality content than the delivery platform – one in five (20%) consumers globally sees no difference between YouTube and linear TV consumption; the figure is even higher in the US (36%) and the UK (27%).
Gaming and e-sports: Brands tap sponsorships, mobile creative and celebrity collaborations
Gaming and e-sports audiences grew rapidly last year, with streaming platform Twitch approaching three million monthly viewers worldwide. Audiences are also more receptive to advertising in exchange for in-game benefits, and gamers are 7% more likely to buy from brands they have seen advertised (the figure is higher in Asia).
E-sports sponsorship, meanwhile, is expected to grow 11.6% this year and top $600m for the first time, but creative opportunities for brands extend beyond this, including celebrity collaborations and partnerships.
Key quote
“The main takeaway for brands has been a greater focus on agility, innovation and effectiveness, a trend that is likely to perpetuate digital media’s rapid growth in 2021 and beyond” – Rob Clapp, Senior Analyst, WARC Data.
Download a sample report here. WARC Data subscribers can read the report in full.
Multilocal workstreams for global efficiency and flexibility
Multilocal workstreams for global efficiency and flexibility
Multilocal marketing brings together local autonomy and global, tech-powered production efficiencies to enable global brands to reach local audiences with greater relevance and velocity. Mondelez’s Mena Nadaraja outlines the ways to execute a multilocal workstream.
Why it matters
An integrated multilocal model allows brands to strike a balance between global efficiency and hyperlocal relevance, resulting not only in production efficiencies but also meaningful and effective content and touchpoints across the digital ecosystem.
Takeaways
- A multilocal mindset helps brands to identify opportunities to better meet audiences in established and emerging markets.
- Key to the multilocal strategy is aligning cultural insight and data with production efficiencies.
- Doing so enables teams to quickly adapt their messaging across communities or in response to unforeseen challenges.
How TV can build social bonds between viewers
Understanding the social interactions of households watching TV together, and how their responses to what they’re watching are a way of cementing bonds, could have a significant impact for broadcasters and advertisers.
Why it matters
While a TV programme may not necessarily be the most important thing in the living room, the conversations it sparks can play a vital social role. This can help shape not only thinking about how the programmes themselves are made, but also how they are scheduled and promoted.
Takeaways
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The art of marketing: Eight lessons from Asia’s top martial arts franchise
ONE Championship turned mixed martial arts, Muay Thai and kickboxing into an Asian global sports property. But its founder Chatri Sityodtong tells WFA Global Marketer Week that the billion-dollar enterprise is really about humanity and its hopes and dreams.
Why it matters
ONE Championship used the martial arts platform to become the fastest-growing sports media property in history, with millions of fans all over the world, through a combination of values, heroes and stories.
Takeaways
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IPL advertisers will only pay for matches played
Star Sports has told advertisers who bought airtime for Indian Premier League (IPL) cricket matches to pay only for games played before the league was halted, after the discovery of a number of COVID cases among players and staff.
Last week, the Board of Control for Cricket in India (BCCI) said the IPL season would be suspended indefinitely.
The details
- Star Sports paid Rs 16,348 crore ($2.2 billion) for IPL rights for television and online broadcast between 2018 and 2022 – around Rs 54.5 ($7.4 million) per game. Just 29 games of the 60 matches this season had been played when the suspension was announced.
- Even if the season is re-started by the BCCI, advertisers will have the option of pulling out of their contracts.
- Star Sports had deals with 18 sponsors in a variety of categories for the 14th IPL season, while Disney+ Hotstar, the OTT platform streaming live matches, had 14 sponsors.
Key takeaway
The IPL is as popular in India as ever. Its suspension came as viewing figures were beating those for the same period in 2020. Broadcast Audience Research Council (BARC) India data said that for the first 26 matches, Star India network had a cumulative reach of 352 million, compared to 349 million in 2020. And almost every third TV-owning household in the country watched the opening match of the season.
Sourced from The Economic Times
[Image: IPL]
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Ad budgets growing at strongest rate on record
Marketing budgets are expanding at a rate never seen before, following deep cuts during the initial wave of the coronavirus outbreak in 2020, according to WARC Data's Global Marketing Index (GMI).
Why it matters
The coronavirus pandemic caused a rapid cut in advertising budgets, with the steepest contraction visible in May. Advertisers have invested more as the immediate uncertainty eased, with the investment rebound has continued to accelerate this year.
Takeaways
- All media saw investment accelerate in April, though TV is the only legacy medium to see budget growth.
- Marketing budgets are in growth across all regions, with Asia Pacific seeing the quickest rate of increase.
Developed by WARC, the GMI is a monthly indicator of the state of the global marketing industry based on current conditions among practitioners. Practitioners who complete the survey receive the full analysis report.
Sourced from WARC Data
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Quarter of UK business to close or scale down offices post-pandemic
Quarter of UK business to close or scale down offices post-pandemic
Over a quarter of UK companies say they plan to close, downsize or consolidate their offices going forward, as they move to a flexible mix of remote and in-office working.
Such a change has profound implications for many businesses, not least the experiential advertising sector, which had seen booming growth for over a decade leading up to 2020 – then the pandemic struck.
The details
- After a year of experiencing the work-from-home model, more than half, or 53%, of businesses say they plan to offer more flexible or remote working policies, according to research from research company YouGov carried out for HR tech firm Applaud.
- 30% of businesses say they are expecting employees to come into the office only between one and three days a week. 14% say they don’t expect staff to return to the office at all after the pandemic.
What it means for advertising
- Meanwhile, advertisers in the UK and US are gaining in confidence as vaccine rollouts gather pace and an end to the toughest restrictions are now within sight – agencies report pent-up demand from advertisers to return to pre-2020 levels.
- Experiential activity is likely to see a shift, and focus less on central locations. According to UK agency Appear Here, which helps brands use vacant storefronts, sometimes for as short a time as a day, the focus now is on local ‘neighbourhood’ activations, with brands increasingly renting storefronts next to places where people work, eat and seek entertainment.
- Savvy brands are active in neighborhood spaces to connect with local communities. Demand for stores in ‘cool neighborhoods’ versus city centre high streets has gone up by 56% compared to pre-Covid, it says
Key quote
“People want to congregate outside in parks and restaurants. That’s an experience where brands are looking to see how they can help and play a role in even those in-between spaces. It’s really a pretty broad spectrum in terms of how brands are looking to come back” – Gaston Tourn, Appear Here chief marketing officer.
Sourced from CityAM
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Haulage issues could presage brand shortages
Haulage issues could presage brand shortages
A perfect storm of Brexit, COVID and tax changes is breaking over the UK haulage industry, with a shortage of drivers likely to affect FMCG brands to varying extents later in the year.
What’s happening
- Brexit and COVID have meant many European-origin lorry drivers have returned home, according to the Financial Times.
- New IR35 tax rules on self-employment have exacerbated that trend.
- COVID has led to some 28,000 domestic HGV driving tests being cancelled.
- The Government ended a relaxation to driver hours at the end of March.
Why it matters
Mental and physical availability remain crucial to the marketing of FMCG brands, but the latter is becoming an issue. The Grocer has warned that driver shortages could mean convenience stores face empty shelves as wholesalers put caps on the amount of products retailers can order.
In the short term, rising transport costs could be reflected in increased product prices. As the UK emerges from lockdown, with most rules due to be lifted by June 21 and with people anticipating a greater sense of normality, they could be in for a rude shock.
Key quote
“To the public as opposed to the industry this is something of a quiet storm but it could soon turn into a hurricane with shortages evident, escalating stress and tension among suppliers and hauliers” – Rod McKenzie, managing director of policy and public affairs at the Road Haulage Association.
Sourced from Financial Times, The Grocer
Marketing to a new breed of Gen Z beauty consumers
Social media platforms like Instagram, TikTok and YouTube have become a hotbed for beauty conversations between fellow consumers, but also between brands and consumers, according to Natasha Hulme, Global Strategy Director at SEEN Group.
Why it matters
With social media and influencers now ruling beauty marketing, and consumer motivations drastically changing, brands must embrace future-forward marketing approaches to stay relevant: 80% of Gen Z beauty shoppers globally now say that beauty is about confidence and not appearance.
Key Takeaways
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Where publishers look beyond the cookie
Where publishers look beyond the cookie
Publishers are exploring solutions to ad targeting as the widely-used, if deeply flawed, cookie is phased out of web browsers’ plans – there is an important opportunity to right some long-standing imbalances.
Why it matters
The decline of cookie-based advertising presents an opportunity for serious change to publishers’ relationship with an advertising ecosystem that has drawn power and money away from them, but they will need to balance whether to partner with data integration partners that will help take their direct relationships to market or to go it alone like the largest publishers.
Takeaways
- While Google’s FLoCs are an early and influential leader in the post-cookie conversation, they are by no means a done deal and some publishers see an opportunity to disrupt the hegemony.
- Publishers hold the most valuable elements of advertising: the content users want to look at and a first-party relationship with them. The question is whether they can avoid creating walled gardens that will impede investment.
- Individual-level targeting is far from perfect, and has in some cases been shown to be less accurate than random guessing; other sources of information can inform smart buys and foment better advertising. Now is a time of change.
Loyalty crisis: Japan, Singapore have APAC’s most disloyal customers
APAC brands wanting to create lasting relationships with consumers will find their job hardest in Japan and Singapore, which have the most disloyal customers in the region, according to a report from R/GA.
Why it matters
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India’s e-commerce surge: Fulfilling consumer needs with human experiences
As e-commerce features and functionalities continue to open up more opportunities for marketers, Oindrila Roy of Essence says brands should not lose sight of the human connection.
Why it matters
Shopping has always been more about the experience than the transaction. Brands that can intelligently leverage technology to create and deliver more human experiences to consumers will emerge the winners in this competitive landscape.
Takeaways
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Are subscription services the holy grail of e-commerce?
A subscription option should be considered a pillar of any customer retention strategy in the e-commerce space, but is the new ‘holy grail’ of e-commerce all its cracked up to be?
Why it matters
With e-commerce penetration booming in the COVID-era, platforms such as Amazon offer new opportunities for brands to boost customer retention with subscription models.
Takeaways
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How brands can earn the most important currency in wellness: authenticity
With brand authenticity in health and wellness all about picking the “right lane”, Carat’s Linda Fagerlund outlines how the stakes are now higher for brands that want to establish a meaningful presence in the wellness space.
Why it matters
Authenticity has become the hardest currency to achieve in health and wellness, more so than any other category. Brands that are serious about staking a claim in the space need to ensure they do so in the most authentic way possible.
Takeaways
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From furniture to steak houses, trains to lettuce – category-busting Japanese style
From furniture to steak houses, trains to lettuce – category-busting Japanese style
Japan’s Nitori furniture chain plans to bring its cost-slashing business model to the restaurant category with the launch of a chain of low-cost steak houses; meanwhile, Japan rail operator JR East is planning to launch itself into the hi-tech indoor farming business.
Why it matters
These are just two of the latest examples of product-category busting. And Nitori isn’t stopping at restaurants: Nitori Holdings plans to bring greater control to its supply chain by also getting into ranching in order to supply its low-cost eateries.
The details
- To cut costs, Nitori will house its restaurants in some 450 of its furniture stores around the country, each fitted out with Nitori furniture and tableware.
- JR East, which runs trains in the Tokyo area, has already established indoor farms within its Kinokuniya supermarket subsidiary and now plans on expanding the process to shops inside its stations, where vegetables will be grown at optimum efficiency, based on thousands of data points around humidity, heat, light and fertilizer, all controlled remotely by AI.
- The process, developed by Germany company Infarm, in which JR East is an investor, claims two square metres of space can yield the equivalent of 250 square metres of traditional farmland and use 95% less water.
Key takeaway
The global agtech market was worth around $9 billion last year, according to the UK analysts Juniper Research, and it is forecast to grow to $22.5 billion in 2025. The market for vertical farms, along with other indoor farming methods, is expected to grow to $6.7 billion from $2.7 billion in 2020.
Sourced from Nikkei Asia, Juniper Research
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Roku ad revenue doubles as video streaming heats up
Roku ad revenue doubles as video streaming heats up
Video streaming company Roku saw its advertising revenue double to reach $467m in the first three months of 2021, according to the latest company reports.
Why it matters
Digital video is becoming more popular, with two-fifths of online consumers now having an internet-connected TV, and this is eroding linear video activity. WARC Data's latest figures suggest linear TV advertising has fallen $47bn globally over the last five years, while online video has grown $39bn.
Takeaways
- Advertising revenue grew 101% year on year in Q1 2021, the quickest rate of growth in three years for Roku.
- Connected TV now accounts for two fifths of all online video impressions, driven by telecom, auto and CPG advertisers.
WARC Data clients can access the latest data on Roku's performance here.
Sourced from Roku, WARC Data
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Google follows Apple with new rules on data collection transparency
Google follows Apple with new rules on data collection transparency
Google is to introduce a new section in its Play app store that lets users see what personal information about them developers collect and share, as well as security settings and practices.
Why it matters
With early indicators suggesting that just one in 10 iOS 14.5 users have opted in to tracking under Apple’s new privacy requirements, the idea that Google could do something similar could have hugely significant consequences for the mobile advertising ecosystem, given that Google’s Android OS is by far the most used mobile operating system globally.
What's going on
Google says it wants developers to explain why the data is collected and how it’s used. The new requirement, due to be introduced next year, follows similar changes brought in by Apple, whose latest iOS update allows users to opt out of tracking by apps.
Back in February, Apple CEO Tim Cook warned that smartphone apps contain too many trackers and that developers would have to ask users’ permission to track them across apps in order to create targeted ads. It’s a development that has implications for ad-funded platforms like Facebook.
The details
- Just as Apple’s policy applies both to its own apps and those of third parties, so Google will require all apps in Google Play to reveal what information an app has access to, such as location of a user and contact details. It will also show if apps encrypt data.
- Users will see the new safety section in Google Play in the early part of next year and app developers will have to start sharing the information before the second quarter.
- Google says any apps that don’t comply could ultimately have their updates blocked or be removed from the Play Store.
What Google says
“If we find that a developer has misrepresented the data they’ve provided and is in violation of the policy, we will require the developer to fix it. Apps that don’t become compliant will be subject to policy enforcement” – Google’s Android Developers’ Blog.
Sourced from The Verge, Google, WARC Data
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Moldy Whopper: How Burger King broke the internet
To break out of category tropes and truly catch consumer attention, brands must embrace creativity and not be afraid to take risks. For Burger King, that campaign was Moldy Whopper.
The work was the realisation of many years spent improving the brand’s food quality, according to Fernando Machado, Burger King’s Chief Marketing Officer.
The idea
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Behind Tesco’s turnaround triumph
In 2015, Tesco – the UK’s biggest supermarket chain – was a brand in fundamental decline. The turnaround strategy required encompassed many areas of the Tesco business from improving product quality, to customer service, to repairing brand trust.
Why it matters
As a household name brand with a huge market share, it can be difficult to turn around a decline. But Tesco proves that with decisive leadership, patience and creativity, reinventing a huge brand is possible.
Lessons
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