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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.

The Souled Store bets on an omnichannel strategy

In just eight years, online apparel brand The Souled Store has carved out an enviable niche for itself among a young, pop-culture-crazy audience looking for authentic, quality clothing; founder Harsh Lal talks to WARC about how the brand has seized opportunities during the pandemic and why it is adopting an omnichannel focus going forward.

Key insights

• The decision to begin as an online-only operation was because offline was more expensive and online could reach the whole country.  
  
• For the company, online will always expand significantly faster than offline as it cuts across geographies, but offline stores are a great branding opportunity.
• The pandemic gave rise to working from home, a development that boosted The Souled Store because of the casual-wear products it sells.

Final thought  

“We have managed to ensure that every offline store of ours is profitable including pre-lockdown and post-lockdown, which is not something a lot of brands have managed to do” – Harsh Lal, co-founder and director of The Souled Store.
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24% of young Australians say social media gives them anxiety

One-quarter (24%) of Australians aged between 16 and 24 say that social media gives them anxiety, while only 7% of those aged between 55 and 64 say the same. This is according to survey data from target audience company GWI.

Why it matters

In the wellness economy, there is a growing need for healthcare solutions to prevent poor mental health and this is providing new opportunities for brands to connect emotionally with consumers. However, marketers need to consider if they have permission to operate in the wellness space before incorporating health and wellness into their strategy.

Takeaways

• Half (53%) of respondents aged between 55 and 64 feel comfortable talking about mental health.
• The latest WARC Spotlight Australia contributors provide some key considerations for marketers before incorporating health and wellness into their strategy.

Sourced from GWI, WARC Data

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Kao engages influencer strategy as tourist numbers plummet

Japanese cosmetics maker Kao is fighting back against loss of sales from tourists, in particular from China, by turning to influencers there to open a new revenue stream.

Kao, which traditionally specialised in department-store sales, has not focused heavily on online sales previously, is teaming up with Chinese social media influencers who buy the Japanese company’s cosmetics in bulk and resell them. Such resellers now make up a significant part of e-commerce sales of cosmetics in China.

The details

• Tourist demand for cosmetics, which stopped when the pandemic began, is not expected to recover in the near-term; but private sellers offer a sales route that doesn’t rely on tourists.
• Kao is signing up resellers and influencers via Tokyo company TrendExpress, which provides logistical support for e-commerce operations in China. Private resellers will be free to set their own prices, but because orders will be sold to them and fulfilled via TrendExpress, who will take a cut, this gives Kao some control over pricing and avoids deep discounting, thus preventing their “high-end image”.
• Kao’s model is being watched closely. Japanese business has been something of a laggard in adopting the influencer model to drive sales, certainly compared to the US and China. And it’s thought the Kao method could soon be adopted by Japanese brands outside the cosmetics sector.

Key facts

The online market for cosmetics in China is now worth around $43.8 billion, according to Kao. And a third of that is reported to be made up of sales via influencers and private sellers who buy in bulk and resell – such a significant volume that major brands can no longer ignore it.

Sourced from Nikkei Asia

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Bauer Media targets ‘superfans’ with ad-free subscription offer

Bauer Media, owner of Scala, Jazz FM, Planet Rock and Kerrang! Radio in the UK has announced a subscription service catering, it says, for music “super fans”, allowing them to listen without ads.

Listeners will also be able to skip songs on live streams. Once a user skips, they will be offered an alternative piece tailored to their tastes, effectively turning listeners into DJs. 

The details

• Bauer’s research identified a group of listeners it calls “super fans” who are especially enthusiastic about their favourite radio brands and music genres. The ad-free service, which, in addition to the song-skipping feature, will give subscribers access to premium material, will cost £3.99 a month.
• The premium plan, which will be available to the four stations’ 2 million listeners, is aimed at helping radio compete with services such as Spotify, increasingly the go-to place for younger music listeners – although older listeners have stayed loyal to traditional radio, keeping its reach fairly constant over the last decade. 
• The move into the subscription model is the first at scale by a traditional radio station operator in Europe. Bauer reaches 55 million listeners in seven countries, with stations including Kiss, Absolute Radio and Magic in the UK.

Key quote

“We are embarking on this to explore how significant of a revenue stream this can be … I think [rival groups] will be fascinated to see how this plays out.” Paul Keenan, Bauer audio president.

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2020’s best campaigns promoting social & environmental responsibility

The Big Issue and Monzo Bank ran the most successful campaign (Pay it forward) promoting good during 2020, according to The Good Report; Anomaly London was the top agency promoting good and FCB the top network, while Sea Shepherd Conservation Society was the number one brand doing so.

Why it matters

Good causes need good campaigns to create awareness of their existence. The Good Report, produced by ACT Responsible in association with WARC, celebrates the work and dedication that thousands of agencies are making to support such causes, in order to further motivate and inspire creativity as well as the continued production of new campaigns.

The details 

• Of the top 40 campaigns featured in The Good Report 2020, 27 are for non-profits, 11 for commercial brands (including three produced in collaboration with non-profits) and two for public sectors.
• The top ten brands include seven non-profits, one for-profit and two are collaborations.
• Forty agencies (28 of which are from 19 networks and 14 are independent agencies) across 21 markets are represented. 
• The top 25 agencies are made up of six independent and 19 networked agencies covering a total of 13 markets. Of the top 20 networks, three are independent and 17 are owned by holding companies. 

The methodology

A total of 1,266 campaigns produced by 748 agencies for 1,012 brands (non-profit, public sector, and commercial brands) across 78 markets were evaluated for this latest Good Report. The Good Report ranking combines a campaign’s presence and performance in shows tracked for the WARC Creative 100 throughout 2020, and in ACT Responsible initiatives.

The quote

“We truly believe advertising has a major role in educating and promoting good to help make the world a better place” – Hervé de Clerck, ACT Responsible Dream Leader.

See the 2020 rankings in full here

Twitter boosts subscription play with Scroll acquisition

Twitter has bought Scroll, a subscription product that removes visual and computing ad clutter from news sites while sending on a slice of the subscription price ($5) to the participating website. The service is expected to form part of Twitter’s eventual strategy to create enough value for a full subscription layer.

Why it matters

Twitter has been key to building online influence for a long time, especially for writers and journalists, but in recent years it has watched as services like Substack and Clubhouse have built services that have beaten the microblogging site at its own game. Now it has made its second acquisition of the year to ward off that challenge.

Twitter’s advantage in building a paid offer here is its penetration among writers and the potential to offer a one-stop-shop on both sides of this relatively small but important marketplace.

Details

• Announced on a blog post on Twitter’s corporate site in which the firm explains that it aims to solve “one of the most frustrating parts about reading content online”: cumbersome display ads that slow down the experience for readers.
• But it also notes that publishers are also seeking something better: a business model that can make them more financially sustainable and less beholden to digital ads.
• Scroll works by using third-party cookies and browser extensions that instruct sites not to serve ads, sending instead a message to sites (including The Atlantic, The Verge and USA Today).

Twitter’s subscription plans

Though deeply influential, Twitter has never gained the mass adoption of Facebook or Google. As a result, it has lagged financially while remaining particularly vulnerable to charges of too much or not enough content moderation while subsisting on its advertising business.

Scroll joins Revue, a newsletter service and now rival to Substack, which will allow writers and journalists – who are likely to use Twitter anyway – to link both outputs while monetising their writing.

The news follows the platform’s rollout of its Clubhouse copycat, Spaces, to anyone with more than 600 followers on Monday. In the near future, the company is expected to announce several key features like ticketing, scheduling, and co-hosting. As an industry particularly keen on events, expect an advertising-themed Space coming to you very soon.

Next steps will be for that subscription offer to start putting meat on theoretical bones, namely how it will make itself both simple enough to understand and attractive enough to retain the talent on its platform and articulate to it how it will add value beyond the biggest names.  

Key quote

“As a Twitter subscriber, picture getting access to premium features where you can easily read articles from your favorite news outlet or a writer’s newsletter from Revue, with a portion of your subscription going to the publishers and writers creating the content” – Mike Park, VP Product, Twitter.

Sourced from Twitter, The Verge, TechCrunch

_{[Image: Twitter]}

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Match.com takes Grand Prix at YouTube Works

Match.com, the US-based online dating service, working with agencies Maximum Effort, Dotted Line Communications, and Better Half, has won the Grand Prix at YouTube Works, a partnership between the streaming service and Kantar Global to champion the most innovative and effective campaigns that ran on YouTube.

The winning campaign

During a difficult year, Match.com was able to increase brand consideration using a series of funny videos about the difficulties of dating in a pandemic, by depicting Satan finding love with 2020. It played on the resilience of singles during a difficult year while encouraging optimism in 2021.

“It's perfect from a creative standpoint”, said judge Raig Adolfo, Chief Strategy Officer, 360i. “The craft, tone of voice, perfect for the channel. The perfect way to use YouTube.” 

A diverse set of awards

Alongside the overall winner, the Awards also pull out winners of distinct disciplines.

• Breaking Barriers, for campaigns that authentically represent diversity, went to GoDaddy’s Made in America.
• Big screen, big results, for campaigns that take advantage of YouTube’s growing presence on TV screens went to Comedy Central for Awkwafina is Nora from Queens.
• Media Innovation, for campaigns that show excellent media planning, went to M&Ms for M&Ms Messages.
• The Underdog, for smaller brands that show large business results, went to the Oklahoma Tourism and Recreation Department: RoadTripOK.
• Action Driver, for campaigns shown to help nudge customer decisions in their favour, went to Jude: The Game Theory $1,000,000 Challenge for St. Jude!
• Brands as creators, which demonstrate an adroit understanding of the platform, went to Adobe for Stock Film Festival.

Read the case studies on WARC

India’s online gaming industry tops $1 billion during pandemic

The popularity of gaming, including e-sports, has surged in India over the last year, growing in terms of both the number of players and viewers and the value of the market.

Why it matters

The pandemic has boosted gaming as an activity for millions of people. Some observers forecast the gaming industry will be 10 times bigger than all India’s other entertainment sectors combined over the next five to seven years.

The details

• The online gaming sector was worth RS7,700 crore or $1.042bn in 2020, an 18% increase on 2019 according to a study by the Federation of Indian Chambers of Commerce and Industry (FICCI) and Ernst & Young (EY).
• The number of gamers grew 20% to 360 million in 2020 and is expected to reach 440 million by 2022 – this despite a ban on PUBG (Player Unknown Battleground) games due to security fears.
• The number of viewers of went up to 17 million across 14 platforms.

Astonishing stat

The best Indian e-sport competitors can make up to Rs 60,000 ($812) per match playing e-cricket. That compares to a top state-level Indian Premier League player who can expect to make around Rs 15,000 ($203) a game.

Sourced from Economic Times

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Amazon and Fox encroach on each other’s territories

Tech giant Amazon is buying up National Football League (NFL) rights to games that had been expected to go to Fox. At the same time Tubi, the Fox-owned streaming service, is planning “data-driven original programming” that will pit it against Amazon Prime.

Why it matters

Amazon buying broadcasting rights and Fox using its customers’ preferences to power a slate of original content highlights how media companies are increasingly undifferentiated. The would-be disruptors come to resemble the old guard and vice versa.

The details

• Amazon will take over the exclusive rights to Thursday Night Football in the US from 2023, when the terms of the deal will let it exclusively air 15 games a season on Amazon Prime. It marks a further push by the tech giant for primary rights to America’s most popular sport.
• Fox’s ad-supported streaming service, Tubi, is to begin original programming content across a number of genres this autumn.
• Data analysis will be at the heart of the push into original programming, says Fox. Tubi original documentaries will offer content on areas such as crime, the UK’s royal family, the paranormal and others, tailored to an individual’s personal viewing habits.

Interesting stat

Some 68% of viewers say Tubi is the only ad-supported service they watch; 39% describe themselves as multicultural.

Sourced from Hollywood Reporter, Deadline

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Automation could solve ‘content crush’

The past year’s dash to digital has fuelled increasing demand for content as marketers seek to cut through on crowded online channels – and keeping up is proving a concern.

Why it matters

Marketers appear to be increasingly open to the use of technology and automation as tools to scale content creation, according to the State of Branding report by digital asset management company Bynder. Its survey of 1,600 marketing and creative respondents across major European markets highlights a sharp shift in marketer sentiment.

What the survey found

• Most (89%) respondents believe technology will help creativity at their organisations, while also allowing them to maintain output. 
• Only 1% of respondents reported that branding cannot be automated – a steep decline from 23% in 2020. 
• More than half (58%) plan on implementing digital experience technologies. 

Key quote

“While marketers were more reserved about automation’s potential impact on branding in the past, the acceleration of digital transformation wiped away any lingering doubts about the need to apply automation to creative processes. Marketers are now ready to tap its potential to meet the demand for growing volumes of content and achieve the agility required for digital marketing” – Andrew Hally, CMO at Bynder.

Sourced from Bynder

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Big Bazaar's digital journey towards e-commerce 2.0

Big Bazaar,  a retailer whose one-stop stores are heavily reliant on footfall, has successfully leveraged its digital initiatives to navigate the pandemic; its head of digital, marketing and e-commerce explains how and looks at where e-commerce 2.0 is going.

Key insights

• A brand must be where its customers are; if customers are not coming to you, you have to reach out to them.
• Big Bazaar does not work on a yearly but weekly plan; and the pandemic has made the chain even more agile.
• Digital creates awareness, consideration, conversion and retention far better than traditional marketing.
• Whether online or offline, a brand must continue innovating its marketing plans to surprise the customer.

Key quote

“Consumers are ever evolving. They continuously change and what really changes is the dynamics, influenced by what happens in our society, our life, our country. One thing that has definitely changed is that with all that has happened, decisions are made now and today” – Pavan Sarda, group head, digital, marketing and e-commerce, Big Bazaar.

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Australia’s Gen Z have low tolerance for browsing online stores: report

The digital shopping habits of Generation Z in Australia have evolved since the pandemic, as this generation now demonstrates a low tolerance for browsing online stores – most give up after no more than ten pages of browsing, with the average being five pages of browsing. 

Why it matters

A survey of Gen Z’s internet shopping habits by martech/content and commerce company Sitecore indicates that the COVID-19 pandemic has tested the loyalty of Gen Z shoppers in Australia and turned them into digital converts who are now less supportive of their pre-pandemic “go-to” brands. These zoomers are also opting to shop more via mobile and direct from brands.

Key findings

• Gen Z has significantly increased online shopping but is more intolerant of poor digital experiences; retailers risk being abandoned.
• They have honed their search skills, becoming savvier shoppers who are very engaged with brands via social media.
• They are more likely to say that an app/website that works well on mobile is critical to their shopping experience (60% vs 49% for older generations).
• Two thirds (63%) of Gen Z are more likely to say they are digital converts and want to keep buying almost everything online, versus 47% among older generations.
• Two in three Gen Z consumers find online shopping more enjoyable than in-person shopping, compared to 49% among older generations.
• For Gen Z, the top physical retail stores are still attractive post-pandemic for exploring (shopping local, socialising) but online is convenient (product availability, lower cost, time saving).

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CMO tenure drops to shortest in over ten years

The time chief marketing officers in the US spend in one job has dropped to 40 months, the shortest in more than a decade, according to research from executive search consultants Spencer Stuart.

This is in contrast to CEOs, whose average time in office is double that. Stuart Spencer puts CMOs’ shortened tenures down to the pandemic. And, of course, not all CMOs who leave their jobs lost them last year or any year – many move to other companies.

Key findings

• The average time in post for a CMO at 100 of the leading advertising spenders in the US was 40 months in 2020, one month less than the previous year. The median was 25.5 months, down from 30 months in 2019.
• The proportion of female CMOs rose to 47% last year, up from 43% in 2019 and 36% in 2018. Women accounted for over half (52%) of the incoming class of CMOs, again, an increase on 2019.
• Diversity lagged behind, however, with ethnic minorities accounting for just 13% of CMOs, down from 14% the previous year; and 12% of incoming CMOs were from minorities last year, a significant decline from the 19% in 2019.

Final thought

“There used to be a time that I believe marketing was thought of as pretty pictures and storytelling. Now the role is better viewed as ‘an orchestrator for the business’” – Suzy Deering, chief marketing officer, Ford Motor Co.

Sourced from The Wall Street Journal

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Calls for UK TV industry to end ‘legacy’ trading practices

Broadcasters must reform decades-old media trading practices if TV media is to halt its ongoing “decline”, warns a new report by Enders Analysis, commissioned by UK advertiser trade body ISBA.

What does the report say?

• According to Campaign, Enders recommends the UK’s leading commercial TV broadcasters – ITV, Channel 4 and Sky – unite to form a joint sales house selling both linear TV and BVOD inventory, with a greater focus on engaging directly with clients.
• Enders calls for greater transparency in trading arrangements, and end to contract rights renewals – introduced in 2003 to prevent ITV from becoming too dominant in the market.
• Instead, it suggests that broadcasters split inventory between ‘premium’ and ‘standard’ airtime, with advertisers able to buy either audience-led or contextually-relevant packages.
• Enders also calls for a unified measurement system across both linear TV (currently measured in TVRs) and BVOD (measured in CPMs).

Why it matters

Advertisers are becoming fed up with the way that TV media is sold. In the US, Procter & Gamble signalled its intention to bypass the traditional upfronts by doing direct deals with broadcasters. Demands are growing for TV to be traded with the same flexibility as marketers are afforded with digital media.

Key quote

“The general idea that TV should become more like online, particularly with the demise of third-party cookies and ads needing to be led by content and other forms of data, makes a lot of sense” – Nick Manning, founder, Encyclomedia.

Sourced from ISBA, Campaign

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