The Feed

From temporary adjustment to permanent transformation: the 2022 challenge for marketers

As brands shift their marketing strategies from pandemic-induced temporary adjustment to permanent transformation, WARC’s Marketer’s Toolkit 2022: Global Trends Report, the first in a series of Toolkit reports, aims at helping brands identify, adapt and successfully meet the challenges of the year ahead and turn them into opportunities for growth. 

Key findings from the WARC Marketer’s Toolkit 2022 include:

• Changes in consumer behaviour will impact 2022 marketing strategies
  Fully 97% of marketers responding to a survey for the WARC Marketer’s Toolkit 2022 said they believe changes to consumer behaviour seen during the pandemic will impact strategies in 2022

• The ‘double bottom line’ – valuing profit and the planet – is now a reality
  Forty-six percent of survey respondents said they afford the environment and financial growth equal importance. 

• Market penetration/customer gain is the most important barometer of marketing effectiveness
  More than half (54%) of respondents now view market penetration/customer gain as the most important barometer of marketing effectiveness, up from 44% last year.

• Spending on social commerce will increase
  Three quarters of brands in the WARC survey plan to increase spending, leveraging the power of creators to sell via livestreams and shoppable media.

• Spending on e-commerce will also grow
  Just over three quarters (78%) of respondents expect to spend more on e-commerce and 25% are adopting an integrated approach by merging e-commerce and digital branding teams.

One-third of consumers prefer to shop for groceries online

A third (35%) of consumers say they prefer to shop for groceries remotely, for example via an online order, according to a survey from YouGov.

However, despite e-commerce's growth since the COVID-19 pandemic began, there is still greater preference for going to a physical venue for groceries, reported by 43% of adults.

Why it matters

As a result, it is vital that brands and retailers design online and offline customer experiences suitable for a variety of consumer segments. This will only grow in importance as hybrid buying becomes a more established habit in the grocery market.

Takeaways

• A third (35%) of consumers say they prefer to shop for groceries online, with 43% preferring to go to a physical venue.
• Online groceries are most popular in China (70%) and India (65%) but less popular in Europe and the United States.

Sourced from YouGov, WARC Data

ESG: A growing focus on sustainability demands a response from marketers

The way companies are managed is changing in response to myriad external pressures – climate change, social justice demands, COVID-19, continued tech disruption – and those have implications for marketers.

Environmental, social, and governance (ESG) criteria are a set of standards for a company’s operations used by many investors in the investment decision-making process. 

Context 

For half a century, Anglo-American capitalism has been predicated on the notion, first espoused by Milton Friedman, that the primary, indeed the sole responsibility of a business is to make profits for its shareholders. 

But just over two years ago, the Business Roundtable, a group of chief executive officers of nearly 200 major US corporations, said that investing in employees, delivering value to customers, dealing ethically with suppliers and supporting outside communities are now at the forefront of American business goals.

What it means for marketers

Marketers are having to look beyond just promoting a product or service to customers to embrace goals that affect wider society, and making sure both the public and the investor community are made aware of that. And as diverse board members are incentivised to meet ESG targets, marketing will be critical to telling that story. 

What’s changing?

• The profile of board members is changing in response to the need for strategic guidance on “non-market crises that arguably carry the most enterprise risk for firms today”, says Wharton management professor Mary-Hunter McDonnell.
• There is now a greater focus on ESG goals, which can be promoted by linking progress on these to executive pay.
• A rise in ESG investments may push companies to become greener in order to increase their share price, suggests Luke Taylor, finance professor at Wharton. 
• Taylor also proposes maximising shareholder welfare rather than shareholder value. “There’s a difference there because shareholders may care about more than just profits.”

Sourced from Knowledge@Wharton

E-commerce trends fuel store openings

E-commerce charged ahead in 2020 and 2021, and yet for the first time since 2017 there are more stores opening in the US than are closing, which reflects a shift in how executives understand online retail: less like the Amazon machine, and more like distributed models common across Asia and Latin America.

Why it matters

The US tends to look inwards, but in the trajectory of e-commerce across chain businesses it can learn a lot from other parts of the world such as Magazine Luiza in Brazil, while at a broader level it is the combination of stores with online engagement options that are likely to drive the biggest chunk of growth in the next half decade for retailers.

The trend

Reporting in the Wall Street Journal links the result of researcher IHL Group’s report into 900 US chains – in which mass merchants, food, medicine and convenience retailers are all growing their physical footprint – with changing views about the role of the store.

Not only do they serve a crucial logistical purpose with collection and returns but they also fulfil a marketing purpose.

Effectively, the internet doesn’t work as the evangelists would have you believe; it’s no customer-finding panacea. Standing out has become harder and more expensive as the pandemic pushed most competitors online. And so traditional methods are not only continuing to show effectiveness – signalling your business’s seriousness with a well-fitted, well-designed store in a prominent location still engenders trust – but more flexible landlords mean retailers aren’t tied into potentially ruinous long-term deals. Rents are also around an eighth cheaper.

Key quote

“We get a bump online within a 10-mile radius of each store we open. Stores are like an inexpensive billboard” – Chris Riccobono, founder of online shirt brand Untuckit (which now has 88 stores and has plans for a further 62 in the next three years).

Sourced from the Wall Street Journal, WARC

How APAC brands can unlock the potential of social commerce: Report

Brands have a significant opportunity in social commerce, with three out of four people saying they are likely or highly likely to buy through social media in the future, according to a report by global data and measurement-driven agency Essence that investigates the rapidly growing trend of consumers buying products and services directly on social platforms.

Why it matters

While social media platforms have always provided an environment for buyers and sellers to interact, there is a shift towards organised commerce on platforms, enabling discovery, browsing and purchasing to take place on one platform without the need to interact with any external websites or applications, thus creating a seamless experience with fewer clicks, as well as higher potential revenue and conversion rates.

Key insights

Some useful statistics highlighted in the report include:

• China is the leader in social commerce, forecast to account for 13% of total e-commerce sales in 2021.
• 80% of consumers in China bought items on social media, followed by Singapore (50%), India (49%), and Indonesia (48%). 
• 90% of Chinese who participated in live shopping and conversational commerce enjoyed the shopping experience.
• 88% of Indian respondents (the highest after China) say they are likely to buy via social media.
• In Indonesia, apparel (49%), food delivery and takeaway (33%), and beauty (32%) were the most purchased categories.
• In Singapore, 37% still use credit/debit cards for social media transactions; 25% for both digital wallet and mobile payment.
• 50% of Australians participated in live shopping, conversational commerce; but 80% enjoyed the shopping experience.

Quote

“E-commerce is maturing as a field, with social media giving brands and retailers new ways to reach audiences and new growth opportunities. In this environment, social commerce serves as a key future-proofing method for the next five years and beyond.” – Aniket Basu, senior director, technology and e-commerce, Essence.

Brand in action: How Tailor and Circus makes underwear inclusive

Tailor and Circus is a young Indian underwear brand that makes undergarments for every body type and the brand’s communication conveys the message with regular people modelling their products and not creating false portrayals of the perfect body. 

Abishek Elango, co-founder of Tailor and Circus, speaks to WARC about the idea of not just inclusive advertising but being an inclusive brand.

Key insights

• It is not easy to love your body because of the years of conditioning, stereotyping, self-loathing, unhealthy eating habits and disorders.
• In India, the sari is inherently an inclusive and body positive outfit but when it comes to progressive advertising, there is a gap between modern representation and fashion.
• A brand has to first take an honest and critical look at itself and know that it is inclusive as a company before it can begin advertising in an inclusive way.

Large brands posting twice as many Instagram Stories this year

Brands with more than 100,000 followers post almost 50 Instagram Stories each month, more than twice as many as they did last year, according to an analysis of Instagram business accounts by social analytics company Socialinsider.

Why it matters

While Instagram Stories can offer brands a quick and easy way of engaging with audiences, marketers need to be careful to not neglect the main Instagram Feed – on average Story posts reach only half the people that Feed posts do. This gap has also widened over time, suggesting the Feed has become more important in terms of reaching a broad audience.

Takeaways

• Brands with more than 100,000 followers post almost 50 Instagram Stories each month, more than twice as many as last year.
• Instagram Stories have become more popular for brands of all sizes, though the biggest increase between 2020 and 2021 is among the largest profiles.

Sourced from Socialinsider, WARC Data

Do consumers really care about privacy?

Apple’s anti-tracking update saw a vast majority of users choose privacy; spooked by a vague new policy ultimatum from WhatsApp many customers downloaded encrypted messenger platforms Signal and Telegram, while internet browser DuckDuckGo is fast expanding – given the tools, it appears that privacy is front and centre of the consumer mind.

Why it matters

Or is it? Together, these stories provide a compelling narrative that fits a broader tide towards Web3, a vague term for a blockchain-based internet of “value” that imagines advertising as a kind of irredeemable blight on people’s lives with no purpose other than to slow down browsing experiences.

What these stories have shown, however, is the fundamental power of defaults. Apple made it easy to block tracking, in a similar way to how personal data processing services made it easy to connect to a powerful platform seemingly for free.

The broader view

As venture capital firm Sequoia Capital puts it in a recent essay, consumer interest may be shifting towards privacy, it encourages new entrants to plumb the opportunities offered up by this new idea. New business models can be thought up but they will rest on:

- Distrust of big tech

- Incumbent inertia

Where it is very useful, however, is in a framework for understanding levels of private applications and, more importantly, for understanding the privacy tolerance of certain individuals. Worth a read if this is a conversation in your organisation.

Sourced from Sequoia Capital

Ad mail has a growing role in prompting digital activity

For the first time, the amount of mobile device usage prompted by mail exposure has outstripped the amount used to call advertisers directly, according to new data from JICMAIL, the Joint Industry Committee for Mail.

Why it matters

“The trend towards mail prompting usage of mobile devices is a lead indicator of the deepening relationships between physical and digital channel opportunities with mail priming activity elsewhere,” says Mark Cross, engagement director at JICMAIL.

Key findings 

Diary-based data captured from a panel of 1,000 households every month reveals that, in Q3 2021, ad mail was increasingly effective at driving consumers to digital actions. 

• The effectiveness of mail at driving consumers to use their tablets or smartphones increased by 11% year on year in Q3 2021; the two-year growth trend revealed an increase of 41%.
• Nine percent of mail drives consumers to advertiser websites, 6% to seek out new information about a brand online, while 5% prompts consumers to look up their account details.
• Eleven percent of direct mail containing appointment-related information drives mobile usage; mail containing product notifications and reminders drives a similar level of mobile effectiveness.
  
  

What next? 

JICMAIL has launched a number of new initiatives to help advertisers measure the effectiveness of mail campaigns, including a Test and Learn Toolkit, an experimental methodology that allows advertisers to directly seed the JICMAIL panel with their campaigns, an integration into data consultancy Kantar’s brand measurement and shopper panel measurement solutions, and an integration with research company RAM (Research and Analysis of Media).

Sourced from JICMAIL

New trends in luxury travel in China

As the travel market opens up again, luxury hotels in China are seeing occupancy rates recover, and the Ritz-Carlton hotel chain has noticed some new trends – such as more leisure travellers and a younger demographic – that will be important in the years ahead.

In its Next-Gen Luxury Travel Preferences Insight Report, the hotel brand identifies six areas, as reported in Retail In Asia, where luxury hotels will need to review their offer to meet expectations.

Six trends for luxury hotels 

• Experiences are crucial 

Younger luxury travellers are looking for an appreciation of a destination that goes beyond sightseeing and comes from a connection with local people and culture. 

• Think food 

High quality cuisine can be a good way of injecting local culture into a guest’s experience. 

• Combine high tech with a human touch 

Technology enables greater convenience and personalised experiences, but next-gen luxury travellers place a high value on personal encounters. Luxury hotels have to find the correct balance.

• ‘Bleisure’ is a thing

Working from home during the pandemic has accelerated the trend to ‘bleisure’ – the notion that it’s possible to combine business and leisure as long as there’s internet connectivity. Hotels need to adapt to cater to the needs of this market.

• Social spaces are increasingly important

Luxury hotels can develop as venues in themselves, attracting guests with unique offerings – things like art exhibitions or brand crossover launches.

• Sustainability is an imperative

An eco-friendly offering is no longer a nice-to-have option – a new generation of luxury travellers is actively seeking out wellbeing and sustainable options.

Sourced from Retail In Asia [Image: The Ritz-Carlton, Shanghai]

European Parliament body supports new limits on global giants' ad targeting

Tough new restrictions on combining user data for ad targeting and a total ban on processing the data of minors have become a lot more likely after a key parliamentary committee added important new clauses to the draft Digital Markets Act (DMA).

The European Parliament Committee on Internal Market and Consumer Protection (IMCO) has backed the addition of two important aspects to draft legislation that will affect giants like Meta and Google, TechCrunch reports.

Why it matters

Should a ban on targeting children enter European law, the problems of working out who is and isn’t a child could become too difficult to bear, therefore accelerating the shift from identity-based targeting to contextual advertising, which can theoretically work without any user data.

Gatekeepers

In a press release, the IMCO explains that the DMA regulation will apply to companies that offer “core platform services” but crucially such a company must turnover more than €8 billion annually in the European Economic Area and must be worth more than €80 billion on the stock market. It has also expanded its definition beyond what we think of as traditional platforms to browsers, virtual assistants, and connected TV – all areas in which Google, for instance, has major interests.

The proposed rules

• Additional consent: a gatekeeper shall, “for its own commercial purposes, and the placement of third-party advertising in its own services, refrain from combining personal data for the purpose of delivering targeted or micro-targeted advertising”, except if there is a “clear, explicit, renewed, informed consent”, the IMCO says, “in line with the General Data Protection Regulation”.
• Enhanced protections for minors: “personal data of minors shall not be processed for commercial purposes, such as direct marketing, profiling and behaviourally targeted advertising”.

Perspective

As ever, this is draft European law, which as TechCrunch’s senior reporter Natasha Lomas does a great job of outlining, must pass through a process of almost Kafkaesque complexity and will likely undergo many changes in the many months of negotiation that are yet to come.

However, this isn’t GDPR v.2. An important part of this new law is the shift of enforcement from a national process to a centralised body, which means that once it comes into effect, expect a much more activist stance.

Sourced from TechCrunch, EU.

Brands navigate the new US political divide

While business and politics have never been as separate as some like to claim, for brands and those that speak for them, determining when to stay silent and when to speak is now a major headache.

Why it matters

Images of Nike shoes burning and Keurig coffee makers plummeting from windows were angry responses to marketing creative and media decisions, respectively – one for showing support to the activist and former NFL star Colin Kaepernick in a wildly successful campaign; the other for pulling its ads from the Sean Hannity show.

But the issues under discussion now are more fundamental: voting rights and new efforts across the country to limit who can vote. The public expects a stance, and increasingly so do employees.

What’s happening

Speaking to the New York Times, Tim Ryan, US chairman and senior partner of professional services firm PwC, notes that a key problem for companies is about getting an accurate read on what to do: “They’re trying to figure that out. What’s important to my employees, customers and investors?”

But for many people, issues like voting rights aren’t merely questions of politics but of hard-won fundamentals of citizenship, whose understanding of their absence persists in living memory. Some executives believe that as businesses become more diverse, from the board through the rank and file, more robust stances from companies are likely.

Sourced from the New York Times, WARC

UK digital marketers not fazed by end of cookies

Most UK digital marketing campaigns are now run without the use of third-party cookies, according to a survey by advertising company Criteo which also finds that marketers will be leaning heavily on their partners to navigate the future of addressability. 

Why it matters

When Google announced in June that it was pushing back to late 2023 the date for phasing out third-party cookies, the news will have been a relief to some digital marketers. But the evidence from Criteo’s survey (of 114 UK marketers with spending authority over digital marketing) indicates that most are already well-advanced in developing alternatives and reducing dependence on third-party data.

Key findings 

• Two thirds of marketers report more than half of their digital marketing already runs without any dependence on third-party cookies.
• Three-quarters (75%) say that partners – tech and agency partners as well as publishers – will be key to helping them manage data deprecation. 
• Close to two thirds of respondents (64%) rely on partners at least partly to test alternatives to third-party cookies.
• Top of the list of alternatives is getting the best out of first-party datasets by enriching them using external partners (43%), followed by contextual targeting (40%) and aggregate panel data (39%).
• There’s widespread expectation (79%) that access to first-party data will be crucial to success in digital marketing in the years to come.

Sourced from Criteo

Farfetch marketing spend reaches a new high

Marketing spend by the online retail platform for luxury fashion Farfetch has reached a new high of $74.1m in the third quarter of 2021, according to the latest company reports.

Key quote

José Neves, Farfetch Founder, Chairman and CEO, said: “We are seeing strong industry traction behind our platform strategy. Over 1,400 brands and retailers are not only listing more luxury products than ever, but also driving record media solutions revenue in recognition of our highly valuable customers. And with accelerating interest in our Luxury New Retail vision, Farfetch Platform Solutions is shaping up to revolutionize the digitization of the luxury experience and unlock significant potential for Farfetch."

Takeaways

• Marketing spend by the online retail platform for luxury fashion reached a new high of $74.1m in Q3 2021.
• Farfetch's marketing spend has increased by 60.4% from the previous year and more than doubled from two years before.

Sourced from Farfetch, WARC Data

Beijing gets tough with celebs and fans

New rules from the Cyberspace Administration of China (CAC) are designed to place limits on celebrity culture and associated online activity.

What’s happening 

• Online platforms are now required to monitor celebrity accounts and create a watchlist of those promoting ‘undesirable values’.
• Each star agency should only have one account on each social media platform, and fan club accounts need to be authorised by the agency.
• Celebrities should not hype their own work, while celebrity endorsements and advertisements should be clearly marked by platforms. 

Why it matters

While it’s not clear how easy it will be to monitor the output of every celebrity (or even what the definition of a celebrity is), additional regulation of their advertising and endorsements will certainly complicate how they are currently used by brands. Advertisers may have to rethink their approach; one option might be to look beyond the numbers in the fan base and bring celebrities in more as creative partners. 

CAC says

“Some online publicity about celebrities is undisciplined. Gossip and private information have occupied the front page and trending topics of some websites, taking up a lot of public resources.”

Sourced from South China Morning Post, Reuters, WARC