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Future of Strategy 2021: strategy is in demand – and changing

While it was encouraging to observe the growing importance of the strategist in 2020, this year’s Future of Strategy report from WARC notes how, in 2021, that prominence has led to some introspection among the strategy community about the best place to learn and practice.

Why it matters

WARC’s annual report on strategy is based on a global survey of practitioners gives a helicopter view of what the discipline is thinking. You can read a sample here; subscribers have full access.

Takeaways

• Strategists are busier than ever as economies open up. The emphasis on strategy has continued from the first year of the pandemic, with workloads and productivity remaining high. However, mid-level strategists are increasingly looking beyond agencies for new challenges.
• Training is a problem. Few strategists have formal training and few receive the funds or opportunities to pursue such training – the report identifies this as a potential weakness for agencies looking to retain strategic talent.
• Strategists are increasingly looking upstream – to client-side, consultancy, or freelance opportunities – as the day-to-day business of project-based downstream planning is frustrating to many.
• On diversity, equity, and inclusion, the industry continues to talk a good game but tangible action is less apparent.

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. 

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.

JPMorgan enters UK fintech with Chase digital retail bank

JPMorgan Chase is launching a digital-only retail bank in the UK in the coming week, part of a series of measures that together illuminate how the 222-year-old financial firm sees the future of consumer finance.

Why it matters

‘How do you do, fellow kids?’ Traditional banks getting among the UK fintech game with a digital banking offer don’t tend to do very well. It’s a tale littered with weirdly vowel-less new brands, big firm hubris, and confusion about how the new offer differs from the old.

The venerable US bank is hoping to avoid any of these pitfalls, with extensive research, big tech budgets, and rewards programmes – now we’ll see if this formula can work in a vibrant financial market.

The plan

Announced with an interview in the Financial Times, the launch is a major strategic commitment and a jumping-off point for a larger international retail banking expansion, explains Sanoke Viswanathan, the firm’s international consumer division chief. Its initial product will be a current account with rewards, before expanding out to personal lending and eventually mortgages. 

Unlike other established banks that have chased profitability too soon, JPM expects to invest heavily in order to build out its full proposition within three to four years. A business account is expected soon, too – a feature that separated the fintech winners from the losers in the first year of the pandemic.

The space it seeks to occupy is squarely between that of the unblinking spender among the upstart fintechs like Monzo and Revolut but with more wealth management, and the established, steady major brand with deep pockets but with better tech.

The move adds detail to recent news that JPMorgan was acquiring restaurant reviews service The Infatuation, which was assumed to feed into the rewards offers that (ought to) differentiate its products from the competition. More compelling was the news in June that it was acquiring the online wealth manager Nutmeg.

Deep roots

• News of the formal launch follows on from an initial announcement in January.
• “The UK has a vibrant and highly competitive consumer banking marketplace, which is why we’ve designed the bank from scratch to specifically meet the needs of customers here”, the bank’s consumer chief, Gordon Smith, said at the time.
• Notably, the company already has a major office centre in London’s Canary Wharf, from where it has built a vantage point into the dynamics of the UK’s banking market – a place where digital capability is almost as prized as the brand’s trustworthiness and stability.
  

Sourced from JPMorgan, Financial Times, WARC

Targeted advertising: looking beyond the data

Targeted digital advertising is not only vital to the European economy but has a larger social and cultural value that is often overlooked and not accounted for in conventional statistics, says IAB Europe’s Daniel Knapp.

What has targeted advertising ever done for us? 

In a new paper, Knapp, the organisation’s chief economist, warns against a blanket ban on targeted advertising, as suggested by the European Data Protection Supervisor earlier this year, and highlights its role in three areas:

• enabling the proliferation of small- and medium-sized businesses, including sectors which have special cultural value and wider positive effects on regional social structures;
• as an instrument in helping Europe find its place in a new digital world, spurred by large industrial policies and European Champions; 
• supporting a strong, pluralistic and independent media ecosystem.

Point to ponder

Knapp notes that Italy is particular in its reliance on SMEs that have strong roots in their local communities while also exporting abroad. As these small producers are cast on the digital stage, targeted advertising does more than just support business growth: by enabling these companies to compete for customers online, it helps preserve the uniqueness of local clusters of SMEs, the culturally significant goods they produce and the social structures that have grown around them.

Key quote

“We need a constructive debate on how the benefits of targeted advertising that uses data can be best combined with social values and cultural norms that allow Europe to foster long term prosperity” – Daniel Knapp, chief economist, IAB Europe.

Sourced from IAB Europe