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Major audio investment gap exists for marketers

Consumers spend 31% of their media time with audio, yet brands only allocate 8.8% of their media budget to audio, with 25% of brands missing from audio entirely, a new report from WARC and iHeart Media finds. 

Why it matters 

The Investment Gap: Understanding the Value of Audio highlights a striking divergence between consumption of and investment in audio. Whilst WARC Data forecasts audio advertising spend in the US to reach $13.9bn this year, a double-digit recovery (+10.9%) from the pandemic’s 2020 cuts, there remains a large audio investment gap. 

Consumers of every generation are spending more and more time with audio content across radio, streaming and podcasts, driven by audio’s ease and accessibility: the spread of wireless headphones and smart speakers are all adding to in-car, at home and at work listening. A vast opportunity exists in this mass reach and high engagement audio advertising market.

Advertiser attitudes

In addition to highlighting how audio effective is across every stage of the funnel – with the ability to increase brand awareness, create favorability and spark conversion – the study identifies four key types of advertiser attitudes towards audio: 

• Audio Avoiders: The 25% of advertisers who do not invest in audio at all.
• Broadcast Believers: They have seen the benefits of radio and are beginning to delve into more forms of audio.

• Digital Only: They have started to invest but are missing out on the full suite of audio options, particularly the 90% reach of broadcast radio.

• Cross-Platform Champions: They explore audio’s full potential and continue to test, learn from and optimize their investments across platforms.

Takeaway

Whether brands tap into broadcast radio for its mass reach or its effectiveness or dive deeper into podcasting for its highest conversion rates, ight-sizing audio investment will drive real impact and growth for brands. 

Nearly half of Australians will view ads for streaming discounts: survey

Almost half of Australians (47%) say they would be willing to view advertising on their streaming services in exchange for a 30% discount on their subscription, according to the 10^th edition of Deloitte’s Media Consumer Survey, which investigates how Australian audiences across the generations are currently consuming all types of media.

Why it matters

Demand for subscription entertainment shows no sign of slowing amid lockdowns but, as content fragments across multiple existing services, managing and consuming those services is becoming complex. The race is on to solve audience experience, with pay TV providers, telcos and the digital giants seeking potential third-party aggregation solutions.

Key insights

• 56% of millennials and 54% of Gen Z are willing to expose themselves to commercial messages, compared to only 18% of those aged 66 or older.
• But as free-to-air viewing shifts from live television to Broadcast Video on Demand on devices, “willingness to engage with advertisements may be a challenge”.
  
• The report found that respondents were not enthusiastic about engaging with advertisements on smartphones (20%) or laptops (12%).
• The younger generations are said to be more responsive, which is likely due to their being digital natives, with Gen Z most likely to engage with ads on smartphones (40%), compared to laptops (20%).
• Advertising revenue will continue to be a critical revenue stream for both individual services and entertainment ecosystems, providing a valuable supplement to subscriptions.
• However, striking the right balance in the use of personal data and targeting the right demographics on the right devices will be critical.

Quote

“Advertisers must not forget the power of ad-avoidance in driving audiences towards lucrative subscription revenue; for some particularly intolerant audiences, an ad-free alternative to an advertising-heavy offering may be the best subscription acquisition tool” – Deloitte.

Sourced from Deloitte

B2B marketers use broader range of channels than B2C

B2B companies use a broader range of marketing channels and data sources than B2C companies, according to a survey of marketers worldwide by Salesforce.

Why it matters

Overall, 19% of B2B marketing budgets go towards advertising and there are growing opportunities in new channels like digital video and audio. However, as more channels and data sources are used, B2B companies can struggle with marketing attribution and reporting.

Takeaways

• In the 11 marketing channels asked about, B2B companies report a higher usage for ten of them.
• The gap is largest for direct mail/print advertising - 64% of B2C companies use this channel but this rises to three-quarters (73%) for B2B companies.

Sourced from Salesforce, WARC Data

Brands count the cost of selling on Amazon

Brands are finding that the costs of selling through Amazon are rising sharply, as they increasingly need to take out sponsored advertising as well as paying for transaction fees and fulfillment services.

Context

Given the importance of Amazon as both a search engine for consumers looking for products and a platform to buy those products, the idea of adding sponsored search items was an obvious step for the e-commerce giant to bring in more revenue. Ads were the fastest-growing part of Amazon’s business in Q2, almost doubling to $7.9bn.

What’s happening now, says CNBC, is that the number of sponsored ads is increasing and there may be as many as six in response to a search where there were previously only two or three. 

Why it matters

With fewer organic search results on the first page, brands are having to pay to maintain visibility and as demand grows that is becoming more expensive: the cost per click for Amazon search advertising has increased almost 50% in the past year, according to the Canopy Management agency.

Background 

• Keyword-based Sponsored Product ads account for around three quarters of Amazon’s ad revenue but their share is declining as formats like Sponsored Brands advertising grow quicker.
• The growth of Amazon aggregators, which are acquiring independent sellers, is adding to the upwards pressure on advertising costs.
• Amazon says the number of ads shown will depend on search terms and the device used.

Sourced from CNBC, WARC Data

How Parle Agro keeps rural India in mind with its marketing strategy

Despite the rural market being extremely difficult to cater to effectively, beverage company Parle Agro has been leveraging technology and its superior product/price point to give the company an edge.

Key insights

• The biggest concern of marketing to a rural consumer is the high level of fragmentation, thus making an effective rural campaign an expensive affair.
• Parle Agro’s presence on platforms like IPL or other highly-penetrated platforms gives it visibility, especially with the growing penetration of mobile and digital.
• The pandemic shows rural markets are open to digitisation and digital payments, and it is only a matter of time before rural e-commerce becomes as aggressive as urban.

Key quote

“There have been many changes common to both rural and urban sectors since the pandemic but they have impacted both sectors at different times” – Nadia Chauhan, joint managing director & CMO of Parle Agro.

Festive shopping season crucial for SEA marketers: Survey

Many consumer industry marketers across three markets in Southeast Asia – Singapore, Malaysia and Thailand – say the end-of-year Christmas shopping period is going to be make or break for their businesses after a tough 2021, according to a survey by Sitecore.

Why it matters

Amid rising concerns over inflation and COVID-19 – factors that could impinge on consumer spending – most marketers expect digital brands will win the holiday season and are planning to offer in-person and online experiences, including virtual giveaways, wish lists and special festive experiences.

Key insights

• Pandemic-related fiscal challenges have resulted in a fall in revenue this year for the majority of consumer marketers.
• The report found that 69% of marketers are reporting a decline in sales so far this year.
• 40% say festive season sales represents the bulk of annual sales, especially for businesses with less than 500 employees.
• 96% of marketers are concerned about the impact of inflation on the Christmas shopping season.
• 97% are concerned that changing local health conditions could result in the need for fast marketing pivots.
• Despite the uncertainty, marketers feel better prepared than last year to deal with product availability, balancing online and offline demand, and their customer profiling programs. 

Quote

“We are seeing many consumer marketers increasingly relying on digital initiatives to capture the needed increase in sales this Christmas shopping season. Retailers and other consumer companies will need to be nimble and act swiftly in the face of a volatile economic landscape” – Steve Hawkes, COO, Sitecore Asia-Pacific and Japan, Sitecore.

Background

Sitecore conducted a survey with Advanis among 404 Southeast Asia marketers and 1,054 consumers from July 5-20, 2021 in the following sectors: retail and consumer packaged goods, manufacturing, media and entertainment, and technology B2B and B2C.

Sourced from Sitecore

The anatomy of a bad decision

The day-to-day of marketing isn’t just about trying to make good decisions, but about reducing how many bad decisions are made – as even smart people are prone to making bad decisions, understanding why is essential.

Why it matters

The main reasons for making bad decisions are usually unintentional but they are effectively many of the pressures that marketing work throws at people: focus on a narrow set of goals, rushing, working in groups with varying levels of authority or deference – are some of the main contributors. As a Farnam Street blog explains, here are some of the reasons.

Why you make bad decisions

• Situational stupidity. These are the biases that we may know about, but that doesn’t necessarily mean you can simply avoid them: “Whether we’re tired, overly focused on a goal, rushing, distracted, operating in a group, or under the influence of a group, we’re more prone to stupidity”, writes FS.
• Thinking about looking good. We tend to prefer doing what looks good to others rather than what’s good, hard, and probably won’t be praised. Praise matters to people more than outcome.
• Using wrong information. You might have oodles of data, more than you know what to do with, but if you don’t have the right information and assume you do, it’s likely to be a bad decision.
• Using the wrong mental model. Using incorrect or incomplete mental models tends to become more likely as the pace of change increases.
• Failing to learn. Not understanding how to learn tends to mean you’re going to make a mistake several times.

Antidote

Generally, FS recommends trying to avoid stupidity rather than looking for brilliance. Learn from other disciplines, understand that your information about your environment or reality is not reality itself, ask ‘what next?’  

Sourced from Farnam Street

Nearly 10% of online shopping traffic now comes from social media

Social media is becoming an increasingly important source of customers for online sellers, according to worldwide data from the Salesforce Shopping Index.

Why it matters

Social commerce has grown in importance in the past two years, with Facebook, Instagram, Pinterest, Snapchat, TikTok and YouTube all competing. Brands are also recognising this opportunity, with influencers and livestream content being popular ways to attract audiences.

However, the cost of social media and e-commerce advertising is rising quickly and this could pose a challenge.

Takeaways

• In Q2 2021, almost one-tenth (8.9%) of visits to digital commerce sites came from social media, up from 6.6% in Q3 2019.
• Social media's importance is even higher for digital commerce traffic on tablet and mobile devices, taking a double-digit share of traffic.

Sourced from Salesforce Shopping Index, WARC Data

Co-op strategic shifts illustrate dynamics of retail industry

Despite the potential threat from supply chain disruption to its core formats, the Co-op’s UK grocery business is developing channels that require frequent re-stocking, going direct to workplaces and pursuing same-day delivery.

Why it matters

Convenience matters to modern retail. For the Co-op, a leader in this space, a rise in homeworking was good news, as sales grew almost 10% in 2020 compared to pre-pandemic levels. While macro issues are hitting profitability, the Co-op continues to innovate and appears to have looked to innovations significant in Asia, viewed through the lens of proven marketing theory by selling more online and selling closer to their customers.

Chinese firms like Alibaba have really led the way in terms of powering online and back-office operations of smaller retailers as far back as 2018. But they have shown how physical presence and experience can strengthen a digital business. With other rising stars like Shopify and giants like Amazon manoeuvring into a similar platform position, established brands are joining rather than attempting to compete. The question now surrounds whether this sales driver translates into longer-term profitability.  

The moves

• Last week, the Co-op opened its first food-to-go “micro-supermarket” in the head office of Numatic (maker of Henry the Hoover), Retail Gazette reports. The store will be open 24 hours, cashless and self-service with food to go, ready meals, and hot drinks.
• The idea is to bring the shop closer to workers, allowing the Co-op “to have a Co-op presence in locations that aren’t suitable for our traditional stores”, head of new channels Martin Rogers told the Gazette.
• Along with recent news that it is continuing to push into the on-the-go format with a new store on London’s Baker Street, the Co-op clearly believes it needs to be physically present where workers are should they come back to offices in greater force.
• It’s not betting the house on a return to the office, however, as the firm is targeting a 185% increase in online sales from its current £70m to £200m through a partnership with Amazon Prime that will bring customers nationwide same-day deliveries by the end of 2021.

Key quote

“Our commercial strategy is focused on getting closer to where they are to provide what they need, however and wherever they choose to shop with us” – Jo Whitfield, Chief Executive of Co-op Food, in a statement.

Sourced from Retail Gazette, Convenience Store, BBC, Co-op. Image: Co-op

Amazon Prime Video outperforms among older audiences

Amazon Prime Video leads among older audiences compared to Netflix and Disney+, according to data from industry analysts MIDiA.

Why it matters

As video streaming competition increases and older SVOD audiences consume more content, platforms can fuel growth by targeting this demographic. However, a lack of news and sports content may limit the ability of Netflix and Disney+ to appeal to those migrating from linear TV.

Takeaways

• While 20% of all subscription video-on-demand (SVOD) users are aged 55+, this rises to 22% for Amazon Prime Video.
• In comparison, just 10% of Disney+ users and 19% of Netflix users are in this age group, both below average.

Sourced from MIDiA, WARC Data

APAC consumers don’t find enough diversity in ads: survey

Advertisements are key to building a brand's image but a new global survey by YouGov shows that advertisements are still failing to be fully effective when it comes to diverse representation, with a significant number of APAC consumers in Australia (43%), Hong Kong (38%), China (38%) and Singapore (35%) who do not feel represented in ads.  

Why it matters

Consumers worldwide are looking for diversity when it comes to adverts and given this consumer expectation to see people that look like them in ads, brands can approach advertising as a way not only to sell products and build their image, but also to shape and impact society. 

Key insights

• Globally, two in five consumers feel that they are not fully represented by the people they see in advertisements.
• European consumers are more likely to disagree with the notion they are represented by the people they see in ads. 
• This view is most pervasive in Germany and Sweden, where three in five respondents say so (60% and 59% respectively).
• More US men than women believe that they are not fully represented by the people in advertisements (42%). 
• A similar attitude also persists among respondents in urban Mexico (44%). 
• The share of adults in the UAE and urban India who feel that people like them are fully represented by the people in advertisements significantly outnumber those who say the opposite (34% vs 22% in UAE and 38% vs 21% in India).   

Background

The data is based on online interviews with adults aged 18 and over in 17 markets. Data from each market uses a nationally representative sample apart from Mexico and India, which use urban representative samples, and Indonesia and Hong Kong, which use online representative samples.

DOOH’s impact stronger than classic signs: neuroscience study

Neuroscience has quantified the impact of out-of-home advertising (OOH) for the first time and found that digital out-of-home (DOOH) signage is 63% more effective than classic signs, according to a research study by Australia’s Outdoor Media Association (OMA).

Why it matters

Scientific proof that advertising seen on DOOH signs has the power to deliver impact in just a one- or two-second glance will inform the development of a new currency that advertisers and agencies can use alongside reach and frequency reports.

Four findings

1. Advertising seen on classic signs is just as impactful as a 30-second radio commercial or 15-second television advertising spot.
2. Ads seen on digital signs average even higher by delivering 63% more impact than classic signs, proving DOOH signs have the power to deliver impact in a one- or two-second glance.  
3. By measuring the peak moments of long-term memory encoding and emotional intensity in the brain, Neuro-Insight was able to evaluate the impact of OOH signs on the audience.
4. It introduces a qualitative measure to be added in 2022 to OMA’s audience measurement system to give agencies and clients another tool to help them plan and buy OOH campaigns.

Quote

“What we have accomplished in doing this research is [to] go beyond the ‘how many’ part of the equation that comprises most mature media measurements. With the Neuro Impact Factor, we have brought in a quality dimension in a scalable way. We finally have three parts of the triangle of reach, frequency and, now, impact” – Peter Pynta, CEO, Neuro-Insight.

Background

More than 2,000 people participated in the two-year research project and their responses to over 800 classic and digital signs were recorded by Melbourne-based neuroscience research company Neuro-Insight, which used eye-tracking and brain-imaging technology to analyse the brain’s neural response when looking at advertising on OOH signs.