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WARC Talks: Three marketing trends for 2024

WARC’s David Tiltman, SVP Content, and Aditya Kishore, Insight Director unpack The Marketer’s Toolkit 2024.

• They discuss political polarisation, generative AI’s evolution into content creation, and masculinity in crisis.
• The Toolkit identifies trends that will disrupt existing global marketing practices and offers insights to help turn these disruptive areas into opportunities for growth.

Listen to the episode in full here 

Timestamps

02:15 – What is the Marketer’s Toolkit?

05:07 – Political, ideological and social divides are growing deeper.

11:03 – AI is evolving from processing to creating.

18:08 – Masculinity is in crisis.

Further reading

The Marketer's Toolkit 2024

What we know about marketing to men

Introducing The Marketer's Toolkit 2024

The Marketer’s Toolkit 2024 has now landed: the thirteenth edition of the report dives deep on five emerging trends for the coming year using a new proprietary methodology alongside an extensive global survey – here’s what you need to know. 

WARC members can read the full report right here.  

If you’re not yet a member, you can find a sample of the report here.

Why the Toolkit matters

Based on a survey of 1,400+ marketers, in-depth interviews with CMOs, and WARC’s GEISTE methodology for trendspotting, the Toolkit provides strategic support for planning and decision-making to understand the challenges and opportunities for the year ahead. 

Why it’s useful 

Not just another forward-facing trend report, the Toolkit identifies five major trends for the year ahead, exploring the quantitative and qualitative data that WARC analysts used to establish these ideas. 

We then put these in context by surfacing highly effective examples of a brand response to each trend, CMO viewpoints, and practical takeaways.

Five trends

1. Unlocking the potential of Gen AI: Nearly three-quarters (70%) of marketers plan to unlock the potential of AI in their marketing. 
2. Preparing for the age of polarisation: 13% of marketers said the best strategy is to “drop all ‘purpose’ driven strategies and political positions”.
3. Masculinity in crisis: Almost two out of three marketers (63%) agree that the way they communicate with young men needs to change. 
4. “Sportswashing” is a growing concern: 61% of marketers concur that it is “very important” for sports organisers and owners to avoid being politically divisive.
5. Sustainability should be locally relevant: Nearly two-fifths (38%) of marketers are investing in local communities.

Taking on economic uncertainty 

“Marketers globally continue to be concerned about the economic picture with 64% of survey respondents seeing it as the biggest factor in 2024 planning. But a majority (61%) of firms expect improved business performance next year, up 10% from last year,” explains Aditya Kishore, Insight Director, WARC, and principal author of the report. 

You can read Aditya’s introductory essay to the Toolkit, Capturing growth in the YOLO economy, on WARC Opinion. 

The evolution of marketing

The Marketer’s Toolkit 2024 is part of WARC Strategy’s The Evolution of Marketing program, offering a series of practical reports designed to help marketers address major industry shifts to drive marketing effectiveness in the coming year. Look out for a series of podcasts and a webinar on the Toolkit in the coming weeks.

The missed sponsorship opportunity for brands

Sponsorship accounts for a significant chunk of the marketing budgets of multinational brands, but this activity remains relatively unmanaged and unmeasured for many, according to new research from the WFA. 

The WFA Evolution of Sponsorship study, produced in partnership with Lumency, notes that global sponsorship spending is projected to grow at a CAGR of 8.7% from 2022-30 and reports that sponsorship accounts for, on average, 11% of a brand’s marketing budget. 

Why sponsorship ROI matters

That level of spending is second only to media spend for many brands, yet just 5% of brands surveyed* said they feel “very confident” that the investments in their sponsorship portfolio are addressing the right audience, with the right assets and for the right spend. 

But while most brands said measuring ROI of their sponsorship is their most significant challenge related to sponsorship activity, they are spending on average 1% or less of their sponsorship budget on post-evaluation/impact measurement (a fifth of brands spend nothing). Clearly, there is a lot of work to be done in this area.

Takeaways

• Brands need to measure outcomes (eg improved consumer awareness) rather than outputs (eg the number of attendees at an event).
• Brands need a model or framework to determine the commercial value of the rights and entitlements they secure with their sponsorships (31% say they have such a framework, 38% are developing one, 31% have no plans in this regard).
• Activation is a missed opportunity: two in five brands surveyed (43%) say they do not know what they are spending on the activation of sponsorships. Almost the same proportion (39%) are spending less on activation than on rights fees.
• Procurement teams can bring structure and add value to the organisation’s sponsorship activity, well beyond negotiation of rights and contracting. 

*The report is based on responses from 34 multinational companies, with total global advertising spend of US$51.3bn. 

Sourced from WFA

Elderly Chinese embrace short-form video

China’s senior population are spending an increasing amount of time online, embracing short-form video apps and becoming influencers themselves. 

Context

In the past, older people tended to avoid expensive gadgets, but Covid-19 lockdowns were a turning point as smartphones and social media became important new points of connection for them. 

Older people are now spending more time online, as the prices of both phones and data have fallen. Academic studies suggest that while this could help in alleviating loneliness among this age group, it could also be contributing to internet addiction. 

Why social media habits matter

Earlier this year, the Cyberspace Administration of China suggested limiting the amount of time children and teens could spend on their phones, but it might equally have questioned the habits of older people. Whatever the rights and wrongs, it’s clear that marketers can find this age group – which has significant spending power – on social media platforms; Wired notes, for example, that many elderly are shifting media consumption from TV to Douyin.

Takeaways 

• China has become a post-cash society in which a smartphone is essential for everyday living.
• Leading phone brands are targeting older people; one, for example, promotes a product as “the phone for your grandpa”. 
• Social media is a lifeline for many older people whose children have moved from towns and villages to cities. (Or they may have moved to the city with them and have limited IRL social interaction in their new environment.) 
• There’s a growing number of older Chinese influencers (eg Glamma Beijing – pictured above – advertise fashion and beauty products).

Sourced from Wired, Deutsche Welle, Taylor & Francis, Frontiers, Reuters

[Image: Glamma Beijing, Deutsche Welle]

Ozempic-maker experiments with pricing to reframe buyer value

Novo Nordisk, the maker of the popular if controversial drug Ozempic, is attempting to innovate on pharma pricing models for its Wegovy product, proposing a ‘risk-based’ pricing model that allows healthcare providers to spread the cost of the drug over a longer period with the promise of eventual savings down the line. 

These savings would come through a reduction in obesity-related problems and costs. 

Why Novo Nordisk’s pricing strategy matters

Across media, the medium is so often the message. For Novo Nordisk, it’s the pricing model that acts as the message to would-be buyers. The lesson – that the big price of a service or product will eventually deliver savings through its use – has great potential across the B2B marketing space. 

The story is deeper, however, as Novo Nordisk faces competition from rivals using a similar medical technology: will it be able to reframe its offer to the point that it can protect its first-mover advantage and the price premium that it’s established?

What’s going on

Danish pharma firm Novo Nordisk is adapting how it talks to healthcare systems as it seeks to increase the uptake of its effective but expensive weight-loss drug Wegovy. 

• The company is best known for its semaglutide drug, which is the active ingredient in the diabetes treatment Ozempic. An insulin regulator that also causes dramatic weight loss, it exploded into public consciousness when several celebrities like Elon Musk credited the product with helping the SpaceX CEO shed 13kgs. 
• In recent years, #Ozempic has blown up on TikTok to the point of causing shortages of the drug for type 2 diabetes patients to whom it is typically prescribed. Wegovy is the formulation specifically for weight loss.
  
• Very simply, it reduces people’s appetites while also slowing the rate of digestion to keep patients feeling fuller for longer.

Why now?

Such hype has boosted the profile of both the company and product but it remains expensive to buy. 

• In an interview with the Financial Times, CEO Lars Fruergaard Jørgensen explained the company’s new thinking about selling an expensive product that promises savings down the line, with recent trials suggesting that Wegovy can cut the risk of serious cardiac events by around a fifth.
  
• “How can healthcare systems justify making a large one-time payment upfront that leads to significant savings down the road? I think we need to share that risk to get going,” he tells the paper.
  
• In the US, the drug costs over $1,300 per month and many insurers don’t cover its costs. It is slightly cheaper in Europe, but healthcare systems – often taxpayer funded – have typically only prescribed the drug for patients with extremely high body mass index. 

The question, then, is whether a new pricing model can reframe the investment case away from saving individual lives and toward a system-wide investment in reducing obesity (42% of US, and 17% of EU populations). 

This goes far further

The Ozempic effect isn’t just a pharma story, but a full blown macroeconomic conundrum the likes of which we rarely see. Recently, the maker of Krispy Kreme doughnuts saw its securities downgraded on analysts’ assumption that widespread Ozempic use is going to hit demand. 

Walmart has registered some behavioural change among users of the drug who shop at the supermarket, with fewer food products sold as a result. 

Sourced from the Financial Times, Euronews, Lloyds Pharmacy, Bloomberg 

[Image: Novo Nordisk]

Cultural hybridity and the future of glocal branding

As Asian cultural influences grow and populations hybridise, people are becoming more culturally diverse and interconnected, leading to new challenges for brands operating in a glocalised world. 

Why cultural hybridity matters

Amid the rise of Asian national pride and cultural influences, there is lower tolerance for Western examples of cultural insensitivity, and global brands can resonate with local markets only by embracing cultural hybridity to ensure relevance and creativity.

Takeaways

• Create a genuine conversation between geographies, time periods and world cultures to be more inclusive and renew creativity.
• Authenticity remains the key, and brands must first draw inspiration from their own cultural identity and legacy.
• To hybridise branding in a genuine way, overcome the dichotomy of local and global while developing multicultural intelligence.

ABM picks up in APAC

Account-based marketing (ABM) is gaining momentum in the Asia Pacific region as a new study shows not only a solid base of existing practitioners but an even higher proportion of recent adopters.

The latest State of ABM in APAC from B2B marketing agency xGrowth outlines how the B2B marketing strategy is increasingly going mainstream and that’s being accelerated by recent market and technological shifts.

Why account-based marketing matters

Bringing marketing and sales teams onto the same page is the top motivation for companies to leverage ABM to target a set of accounts, as the economic downturn emphasises the need for targeted and cost-effective marketing approaches. 

While ABM can help in this regard, there are still challenges around attribution, metrics and reporting.

Takeaways 

• A majority of those surveyed (86%) have either already adopted an ABM approach (35%) or started adopting it in 2023 (51%).
• 59% of ABM practitioners surveyed plan to increase their ABM-related investments in the coming year.
• The one-to-one ABM tier is popular in APAC, with 50% of marketing and sales teams leveraging it.
• Australia, New Zealand and Singapore are the top three geographies where marketing teams direct their ABM programs.
• 60% of long-term ABM practitioners use direct mail to engage their target audience.
• Popular channels included email marketing, paid ads and outreach by sales teams.
• The majority of ABM marketing leaders (55%) say generative AI is either currently impacting their marketing decisions or will influence them in the future.

Sourced from xGrowth

How marketers can navigate Gen AI complexities

As marketers embrace the capabilities of generative AI, they must strike a balance between efficiency and the ethical use of these technologies, argues a marketing professor in a WARC exclusive.

Why Gen AI matters

Marketers might be tempted to use generative AI tools like ChatGPT to create content at scale, but they must balance saving time and resources with minimising the potential for harm to brands, people and the planet.

WARC members can read the full exclusive here.

Artificial intelligence will be significant for this industry, but the new technology won’t be an unalloyed good: risks include the inadvertent creation of harmful content, inconsistent brand tone of voice, erosion of creativity due to over-reliance on automation and the environmental costs of producing more advertisements, not to mention the energy usage of the technology itself.

Takeaways

• As the climate crisis intensifies, marketers should be looking at doing better by doing less. Reduce ad clutter to minimise environmental impact. 
• Translate the unintended consequences of AI-generated content into wider company functions so that they can be managed, looking at it through the lens of brand/reputation management, CRM, sustainability/ESG goals and regulatory compliance.
• Deploy a human-AI collaboration approach with pre-screening tools and content filters to minimise the risk associated with the use of Gen AI tools. 
• AI literacy and diversity training in Gen AI is essential for modern marketers.

Key quote

“An internal policy and a planning guide for Gen AI can help ensure marketers and business leaders are empowered to navigate the complexities of evolving Gen AI, while also minimising the risks of the unintended consequences of AI in their marketing efforts” – Kimberly Hardcastle, Assistant Professor in Marketing at Newcastle Business School (AACSB), Northumbria University.

Consumer confidence grows but Christmas outlook still complex

Following an uncomfortable year of price rises across much of the globe, the festive shopping season is set to be a huge moment for advertising as people spend whether they like it or not, but there are now signs that consumer confidence is improving.

Christmas in the bad vibes/YOLO economy

Back in October, strategist and WARC columnist Faris Yakob wrote about the strange phenomenon of the YOLO [you only live once] economy: one in which despite predicted economic downturns, people continue to spend money like there’s no tomorrow. 

GfK consumer confidence data for the UK, out on Friday, suggests that the festive period will constitute something of a rally in overall confidence. “The dramatic 10-point jump in our major purchase sub-measure, reversing some of the worrying 14-point drop we saw last month, will be good news for retailers looking to benefit from Black Friday and Christmas,” says Joe Staton, GfK’s client strategy director, in a statement.

Heading into the festive season, the fight for that spending is now heating up. WARC/AA figures for the UK alone anticipate £9.5 billion of adspend in Q4 2023. But the likes of Black Friday deals and the retailers that are set to benefit most from them, such as Amazon, will be important.

Spending through the struggle

Many people are spending money even though they are struggling. A Harris Poll in the US last week found that 81% of Gen Z and millennial shoppers plan to splurge even if 62% say they’re not set up financially to do so, Retail Brew reports. 

Overall, the picture looks tight, with some surveys indicating that consumers will aim to spend less and pursue more deals; other surveys from earlier in the year, such as the IPA’s, painted a bleaker picture of greater cutbacks.

Young shoppers are out for deals

eBay research by Censuswide, based on a survey of 2067 UK adults between 30 June and 4 July, found: 

• 22% of 16-34s do their shopping during Black Friday sales
• 49% of 16-34s plan to take advantage of sales throughout the festive season

Online shopping is key

Commerce media firm Criteo’s Q3 survey of 2,381 UK consumers found that the majority of people plan to spend more online (74%) this festive season, but the figures also sketch a less loyal audience: 

• 79% are prepared to purchase from new online stores for the festive period 
• In general, 61% report frequently trying new brands and retailers 

However, it’s not just price: Criteo also found evidence of ethical and environmental price elasticity, with people willing to pay more in certain instances: 

Ethically produced products

• 37% of respondents would pay 5% extra
• 16% would pay 10% extra
• 3% would pay 20% or more 

Carbon-neutral delivery

• 39% would pay 5% extra
• 13% would pay 10% extra
• 2% would pay 20% or more

Locally produced food

• 39% would pay 5% extra
• 22% would pay 10% extra
• 5% would pay 20% or more

Sourced from WARC, eBay, Criteo, Retail Brew, GfK

Chinese social media’s new high stakes

Major social media platforms in China are demanding that popular KOLs or influencers use their real names, raising questions about a form of celebrity and a source of advertising heft that had become hugely important to the country’s internet economy. 

Why the creator economy matters

KOLs (Key Opinion Leaders) are important channels for brands operating in China, but the risks to the people who do this work are growing – with their anonymity under threat, the diversity of voices is under threat. 

What’s going on

In late October, social networks Weibo, WeChat, Douyin (TikTok in China), Zhihu, Xiaohongshu, and Kuaishou announced that users with a high number of followers would need to make their legal names visible to the public, Rest of World, a tech news site, reports. 

• It is likely that the policy change is a response to the Chinese internet regulator’s scrutiny of anonymity in order to better control the online environment. 
• In response, some users are either leaving platforms or – in order to maintain anonymity – culling some of their followers to come in under the threshold. 
• “Many [influencers] are choosing to remain silent for now, waiting to see how the policy will be enforced,” said one influencer agency exec from Beijing, speaking to RoW anonymously. 

Given that outspoken criticisms of the government are rare, some observers believe that influencers’ greater threat is the collapsed wall between their offline and online lives, which is likely to chill online conversations once they can have more real-world impact. 

For marketers, it’s likely to mean that the wide pool of possible influencers will shrink, while the appetite for less risky technological alternatives like virtual KOLs will grow. 

Sourced from Rest of World, WARC

How an NBA team set itself up as a standalone ad business

The Utah Jazz play in the NBA but are now going it alone on TV and online as the franchise aims to build an ad business that can ensure its sustainability in the face of seismic changes to the sporting model, with many of the lessons universal. 

Why new sport broadcast formats matter

The US is the largest sport market but it is undergoing significant disruption: the viewing format and experience is evolving as tech giants like Apple move into the space or as leagues and clubs explore new markets. In Europe, many major football clubs have in-house production capabilities and paid channels – some are even producing advertising – but the opportunity to branch out and own a significant chunk of the customer relationship into match day is rarer. The opportunities beyond the broadcast, however, are expanding fast.

All that Jazz

The team is the subject of a report in Bloomberg Businessweek exploring how the company set itself up to continue broadcasting games to fans of the franchise, whether on TV or online, at a time when Regional Sport Networks (RSNs) on cable, traditionally a steady stream of revenue for teams, are struggling to survive. 

How it works

The strategy has two prongs:

• KJZZ: a local TV station first acquired in 1993 aimed at beaming to as many households as possible on a free-to-air basis. 
• Jazz+: a paid streaming service that carries both NBA games not on national broadcast channels and new content formats featuring players and technical staff.

To power this, the franchise already employs a 35-strong in-house broadcast crew, which is different from most other teams and leagues in the US. 

Utah’s relative isolation and small population meant that it sensed vulnerability in the cable market early and was able to protect itself by making some smart job hires.

Working on a long-term horizon

Jazz owner Ryan Smith cut his teeth founding the survey company Qualtrics and joins a new set of NBA owners with tech backgrounds. The adoption of a scale first, monetise later strategy is clearly present. 

• Currently, the team expects to bring in just 50%-70% of the revenues it had made from AT&T Sports Net (its previous RSN), but with a loyal fanbase, the three-year road plan to get back up to speed is to become a small but mighty advertising firm.
  
• KJZZ’s reach constitutes a 220% boost to its previous reach under an RSN. The team hopes that as word proliferates more people will put up antennas, allowing higher reach to translate into higher ad rates.
  
• Jazz+ anticipates a targeted ad capability, building on a unique practice of the franchise keeping all its ad inventory and revenue back when it had an RSN deal. 

While the project remains experimental, other teams and leagues are watching. Engagement statistics are good, with more than 65% of subscribers logging in for games, according to the Jazz.

Sourced from Bloomberg, WARC

Don’t shelve that Christmas idea too soon, studies suggest

A growing body of evidence indicates that ideas and advertisements enjoy a much longer shelf life than many have assumed, with vintage favourites like Coca-Cola’s Holidays Are Coming and Aldi’s Kevin the Carrot outperforming the market – so it may be time to rethink how to approach Christmas. 

Why wear-out matters

There is no evidence to suggest that ads become less effective as they age, but it may feel like they do, especially when as a brand or an agency professional you are watching the same piece of creative for the millionth time by mid-October. 

In short: if it ain’t broke, don’t fix it.

The myth’s presence, however, doesn’t just threaten wasted effort but a lot of wasted money at Christmas and beyond: creative is too often taken off air and replaced before viewers (even potential customers) have become familiar with the message, restricting its full impact. 

This suggests that more brands should consider sticking with a campaign idea to maximise its effectiveness and squeeze the most commercial benefit out of creative work, chiming with emerging evidence that advertising needs a sustained budgetary and creative commitment in order to be successful.

What’s going on

Data from System1, based on the research firm’s Test Your Ad platform, finds that not only recurring characters but even recurring ads retain their potential to be effective. The platform predicts long and short-term effectiveness based on consumers’ emotional responses.

System1 compared the Star Rating of ads by the time elapsed since their first airing. The analysis covered over 50,000 ads and went back up to 7,000 days, a 19-year period. 

• Retention: “The evidence shows that effective ads and characters are effective every year, with 5-Star ads retaining their effectiveness when re-used,” explains Jon Evans, System1’s chief customer officer. “Christmas ads don’t usually wear out, and festive characters actually wear in.” 
• Evidence of wear-in: System1’s top two festive ads this year – Aldi’s Kevin the Carrot redux in top position with the M&S Fairy just behind it – didn’t score 5-Stars on their first appearance. “But marketers invested in them and had a long-term plan, and now they’re getting our maximum score for long-term effectiveness,” adds Evans.

Top of the recurring elements league

1. Aldi brought Kevin the Carrot back for the eighth time and again scored a 5.9-Star maximum. Every year for the past five years, Aldi ads featuring Kevin the Carrot have been 5-Star ads. 
2. M&S Food brought back their M&S Fairy for the third year running and achieved their first maximum, 5.9-Stars. 
3. The National Lottery last year scored 5.7-Stars and it stayed in the elite 5-Star bracket with 5.1-Stars this year. 
4. Cadbury Secret Santa campaign, which first appeared in 2022, scored 5.3-Stars this year after scoring 5.2-Stars last year. 
5. Coca-Cola: Holidays Are Coming’s rerun gets the maximum score of 5.9 stars.

Tailoring for attention

Figures from CreativeX suggest that advertisers are wasting a lot of media dollars by inadequately repurposing festive ads for TV on digital platforms. This is because they fail to design for the different kinds of attention that different media attract. 

Worldwide, the tech company claims, as much as $600m of ads (based on an overall assessment of 3.9 million individual ads during Q4 ‘21-22) were not digitally suitable for the environment in which they appeared. 

“Millions are invested in ads that do not include any branding in the first 3-5 seconds (the average view length of a digital video), are formatted incorrectly, or fail to include subtitles or supers in media environments where 90%+ of videos are watched without sound, all basic creative quality criteria that’s been shown to deliver better performance on digital,” a statement from the firm reads.

Key quote

“There’s little more frustrating than seeing brilliant, 5-Star ideas and characters with huge potential being scrapped just as they’re starting to work with the public. It’s a form of short-termism that doesn’t make creative or financial sense. Often the boldest decision a marketer can make is to stick with what’s working and reject novelty for its own sake” – Jon Evans, chief customer officer, System1.

Sourced from System1, CreativeX and WARC

Diageo leverages AI to better target whiskey drinkers

Diageo has deployed AI to help it use media more efficiently in targeting drinkers of two of its whiskey brands.

Background

• When analysing zip code and neighborhood data, Diageo discovered two of its whiskey brands had very different footprints in key cities within the same state.
• Consumer heat maps for Texas Crown Royal and Bulleit showed very distinct – and different – hot spots for each. 
• These insights enabled the business to pinpoint the drinkers of each brand with far greater accuracy, using more targeted media. 
• “We actioned this across thousands of zip codes in the US, personalising messages to consumers. And we did this simultaneously, at massive scale,” Claudia Schubert, president and COO of Diageo North America, told a Capital Markets Event.
• “Without our digital capabilities, we would have had to recruit 730 people to deliver this,” she added.

The results 

“Targeting our media to the areas that matter most led to a +30% increase in effectiveness of our investment,” Schubert reported.

Sourced from Diageo

[Image: Diageo]

Search gets platform specific

Google, long a dominant force in search, is coming under mounting pressure from other platforms as consumer search behaviour changes, according to a new study. 

Rise at Seven, the “search-first” creative agency, looked into over 5,000 keywords across a variety of industries to discover where consumers are searching for specific terms and phrases across Google, YouTube and TikTok.

Why search matters

People are increasingly likely to use certain platforms for certain types of search. Google dominates in “near me” and “what’s on” searches and YouTube is preferred for video tutorials, but TikTok is becoming popular for “how to” videos and money advice. 

At the same time, the actual search terms used can reveal the intent of the users, whether it’s simply informational or more commercial in nature. Marketers need to factor these behaviours into their search marketing strategies.

Takeaways 

• Searches for cars and automotive queries are now bigger on TikTok than on Google.
• But YouTube remains a key part of the car buying journey, as hundreds of millions search on there monthly (more than TikTok and Google). 
• 73% of the higher volume keywords on TikTok are informational, which could suggest TikTok is stealing informational search from Google. 
• 21% of the keywords searched for more on TikTok than Google are commercial. 
• Of those 21%, the search volumes were found to have 10X more search volume on Tiktok than Google. 
• There are 503% more searches on TikTok than Google for fashion-related terms.
• Gaming is one of the biggest industries where search volumes are higher on TikTok than Google. 

Key quote

“We believe attention and discoverability is the most valuable digital commodity right now. As a result, marketers need to consider the full user search journey and no longer just think about Google” – Rise at Seven.

Sourced from Rise at Seven