The Marketer’s Toolkit: what marketers need to know to succeed in 2023 

Ninety-five percent of marketers globally expect to be affected by economic recession, according to a survey for WARC’s Marketer’s Toolkit 2023, an annual report that identifies the most important market trends that marketers should focus on to help drive their business in the year ahead. 

Context 

End-of-pandemic optimism at the start of 2022 faded quickly as the war in Ukraine turned the world on its head. The invasion has had a transformative impact on energy prices, inflation and the cost of living around the world. The IMF is forecasting the weakest growth in twenty years, except for the global financial crisis and the worst phase of the COVID-19 pandemic. 

Five themes for 2023

The following key themes emerged from WARC’s survey of 1,700 marketers worldwide for The Marketer’s Toolkit: Global Trends Report:

1. Marketing in a cost of living crisis: While almost all marketers are concerned about the impact of the economic crisis, more respondents are planning to increase spend than last year, across both brand and performance. However, 36% are planning to cut marketing investment, despite evidence from prior downturns suggesting they should maintain spending levels.
2. Price vs. planet: a false dichotomy: 37% of represented companies expect to continue with their sustainability objectives despite the economic situation, while 35% foresee only “some small compromises.” Brands are also challenging the idea that eco-credentials necessarily result in price increases, with examples of local sourcing and use of the circular economy potentially lowering costs.
3. A reckoning for Big Tech: The majority of advertisers (62%) agree that a range of changing market dynamics are forcing strategic shifts from the tech giants, and respondents concerned about the dominance of the ‘duopoly’ have halved over the past two years. More respondents plan to decrease investment in Facebook than increase it for the first time in six years, which suggests that brands are resetting their relationships with Big Tech.
4. The clash of demand, delivery and disruption: Supply chain disruptions are expected to hit brands in 2023, but not evenly. Sixty percent of marketers anticipate non-trivial supply chain disruptions, but just 26% expect they will be significant or severe. This rises to one in three amongst European respondents. And 52% felt challenger brands would be the hardest hit, as they struggle for profitability. Marketers have an important role to play in managing and minimizing supply chain disruption
5. The era of ‘bubble up’ culture: Media and audience fragmentation was the second biggest concern in our survey, with 34% of respondents picking it. Among North American respondents, it was the highest ranked. Two-thirds of marketers expect to focus more on platforms that allow them to stitch together interest-based communities to create reach in a fragmented media world. Other channels with deeply embedded communities such as gaming and influencers/social media content are also set to attract more investment from advertisers next year.

A sample version of the global report featuring the first chapter, is available to read here.

The full series, available to WARC subscribers, will include the following reports:

• The Future of Digital Commerce (launching December 2022)

• The Future of Media Report (launching January 2023)

• The China Toolkit (launching January 2023)

The reports will be complemented by a series of podcasts. 

Most Americans believe social media is corrosive to democracy

Around the world, most people believe social media has generally been a good thing for democracy in their countries, while the United States tends to perceive it as more of a danger to democracy – a gap that could be explained by generational differences.

Why it matters

Social media is used by huge proportions of the 19 countries Pew surveyed – that’s not surprising – but the medium’s adoption by older generations might be a key to understanding why it's viewed differently in the US than in other countries.

Across the world, older users (50+) have been the sharpest growing segment of the population to start using social media, but the US is interesting – along with Japan – for its high proportion (60%) of older users. This contrasts with most European countries in which fewer than 50% of people aged 50 or older use social. Could this division explain the gap?

The numbers: US is markedly different

• An average of 57% of all countries polled say social media has been good for democracy, with 35% saying it has been bad.
• In the US, however, this dips to 34% who say it has been good, and 64% saying it is bad.
• On other metrics such as perceptions of division and civility, 79% of American respondents said it had contributed to more political divisions and 69% felt it had made people less civil, versus global medians of 65% and 46%, respectively.

Around the world, however, an average of 84% of people agree that social media (and the internet more broadly) have made manipulation through misinformation or rumours easier. And 70% of the same sample believe the spread of false information online to be a major threat, second only to climate change.

Anxiety of influence

The core takeaway, then, is that people do see social media as deeply influential, with global majorities agreeing that it is an effective way of influencing politics and policy.

• Most (77%) agree that it is an effective way to raise awareness.
• 65% say it is an effective way to change minds.
• 64% say it is a useful way to get elected officials to pay attention to an issue.
• 61% say it is an influence on policy decisions in their country.

Sourced from Pew Research

[Image: Pew Research Center]

Amazon is Inspire-d by TikTok

E-commerce giant Amazon is launching a feature called Inspire within its app that will allow customers to scroll through a continuous feed of photos and videos featuring products they can click on and purchase.

How it works

Customers access Inspire via a lightbulb-shaped icon at the bottom of Amazon’s app, the Wall Street Journal explains. On their first use they can select their interests and the portal will then curate content accordingly.

Why it matters

The set-up will be familiar to anyone who uses TikTok, whose algorithms deliver content to users’ feed based on what it understands they will like. This has also been a major factor in TikTok making significant advances in social shopping, or what it prefers to call “community commerce”.

Amazon’s move into this area follows a path already trodden by other US tech giants as they look for ways to replicate the innovations around short-form video coming out of China – and from TikTok in particular – and to combine social media features with online shopping. 

What next? 

• Inspire is currently shopping-focused but it could expand into options to share content and trending content. 
• Amazon believes Inspire can attract influencers and help them grow their business, earning money when followers make purchases through customized links.

Key quote

“Video-based content really helps [customers] to understand the product more” – Oliver Messenger, Amazon’s director of shopping.

Sourced from Wall Street Journal

[Image: Wall Street Journal]

Brands should look beyond livestreaming sales figures

The success of livestreaming e-commerce in China is understandably attracting the attention of brands but their channel strategy needs to be more sophisticated than simply looking at sales figures.

Context 

Livestreaming grabs a lot of media attention and billions of yuan in sales, but traditional e-commerce platforms still account for the lion’s share (86%) of online retail in China. As China Skinny notes, “Most Chinese shoppers aren’t sitting through broadcasts and making impulsive purchases for the majority of their shopping.”

Why it matters

Brands need to be clear on the limitations of livestreaming e-commerce. Consumers do not have an endless appetite for such shows and, in any case, the format can restrict the number of items that sell well. Then there’s the fact that platforms such as Douyin and Kuaishou weren’t designed as sales channels and are still building out fulfilment operations. 

Takeaways

• Marketers should appreciate that short-form video and livestreaming platforms needn’t just be about encouraging trial and driving sales: they can be used to build brand awareness and preference as well. 
• Consumers respond to different drivers at different stages of the customer journey on different platforms.
• Douyin found that user retention and time spent fell if there was more than 10% of traffic dedicated to e-commerce content in a video feed.

Sourced from China Skinny, Rest Of World

Sourced from Ormax Media

India's OTT usage grows 20% year on year

New research from media consultancy Ormax Media suggests that India’s OTT – online video services – continue to grow, with the audience swelling by a fifth in the past year and much of that coming from rural areas.

The research

Ormax Media’s study surveyed 13,500 people across both rural and urban India, indicating that the country’s OTT penetration now stands at 30% – roughly 420 million people.

“India’s OTT audience universe has grown rapidly since 2018, with a boost during the pandemic years of 2020 and 2021,” Shailesh Kapoor, founder and CEO of Ormax Media, said in a statement.

Rural growth

At a penetration level of 79%, large cities are approaching saturation. Therefore, most of the 20% growth comes from rural and small-town audiences, which are key for the next phase of growth.

A focus on subscriptions

While the six largest cities contribute just 10% of the total OTT audience, they account for a third of its paid subscription viewership.

The average number of subscriptions, however, has remained static at 2.4 per paying user, reflecting the need for SVOD (subscription video on demand) services to grow by acquiring more paying users, rather than selling more to existing subscribers or those most likely to sign up.

Sourced from Ormax Media

Have a Word wins DMA Grand Prix

Mayor of London and Ogilvy UK have taken home the Grand Prix at the DMA Awards 2022 with their ‘Have a Word’ campaign that sets out to tackle misogynistic behaviour across the city. 

The big idea

The ‘Have a Word’ campaign aimed to make London a safer space for women by changing the attitudes – and actions – of men. It was clear that too many men were standing by and watching misogynistic behaviour happening, and research has shown that low-level misogyny is often a precursor to violence. 

Mayor of London needed men to end this bystander attitude. ‘Have a word with yourself, then your mates’ is a powerful call to action to start changing men’s behaviour – so much so that the video is now being used in schools and by the United Nations.

The DMA says… 

“The ‘Have a Word’ campaign is the perfect example of how data-driven marketing can be a force for good across society,” said Rachel Aldighieri, MD of the DMA. “Due to its direct and engaging creative approach, alongside an effective strategy on how to make it resonate with men, it will have a positive impact on millions of people’s lives for years to come.”

Further details about the winning campaign and the full list of DMA Award Winners can be found here.

Political pressure on ESG masks sustainability mandate

Major investment and asset funds are under pressure because of their climate-focused positions, pressure that could have implications for companies’ climate strategies globally and adds to the debate about greenwashing.

Why it matters

Ultimately, investors matter. Major companies don’t act in the interests of their customers and employees but rather to the extent that those factors will yield value to investors. Pressure on big institutional investors is likely to spark some skittishness, which in turn could affect company strategies and messaging around climate.

The most vocal criticism accuses some of these funds of abandoning their fiduciary responsibilities and favouring activism. However, critics from the other side argue that such initiatives don’t go far enough and can even qualify as a case of greenwashing.

ESG

Environmental, Social, and Governance (ESG) principles have become part of the financial mainstream over the last few years. They are a set of standards that consider a broader set of company behaviours than the bottom line.

On the more abstract end, they are understood to be values-investing, attaching an additional layer of morality to finance. Some argue that ESG factors help reduce risks from investments in areas such as fossil fuels, weapons, or addictive substances that could cause reputational damage for firms, and therefore for the fund and its investors.

Political posturing

Most of the pressure comes from the US. Republican states such as Texas, with its major fossil fuel industry, and Florida are piling pressure on investment funds. It comes at a time when senior figures begin manoeuvring ahead of the 2024 presidential election – and a primary process in which the “war on woke” is likely to play a major part.

• Florida, which is governed by potential Trump challenger Ron DeSantis, said it would pull $2 billion from BlackRock, the world’s biggest asset manager, because “they have openly stated they’ve got other goals than producing returns”, in the words of Florida CFO Jimmy Patronis.
• But BlackRock faces criticism from one of its own investors – and a call for CEO Larry Fink to resign – for ESG hypocrisy, citing an inconsistency between its well-publicised ESG strategy while still attached to fossil fuels.
• Vanguard, the second-largest asset manager, announced this week that it would resign from the Net Zero Asset Managers initiative, in an attempt to make clear that it “speaks independently” in its investors’ interest. NZAM lamented the company’s response to the pressure, adding that these political moves impede effective risk management.

What it all means for marketing

Climate becomes more complicated. While it is unequivocal that human influence has warmed the atmosphere, ocean and land, it puts companies in certain regions – not least in the US – in a tricky position as they try to prove they are delivering for shareholders. The best outcome, however, is that ESG funds would no longer be needed, because eventually the only viable companies will be sustainable companies.

While the US does have more climate deniers than the global average, according to IPSOS, it’s vital to remember that the majority of the US and global population is concerned, and that levels of concern across the world are climbing fast. The mandate for sustainability is undeniable.

But action has to be evidenced, because trust remains low. Reputational risk is huge for companies dragging their feet on action while talking about the environment, as several major brands have found.

Sourced from the FT, Guardian, WARC, IPSOS, BBC

Microsoft ponders super-app option

Microsoft is reported to be considering the introduction of a new “super app” that would give the tech giant an opportunity to challenge its rivals in several categories, including video comms and search, whilst also boosting its advertising business. 

Context 

Apple and Google have long dominated the mobile search world, putting Microsoft at a disadvantage. And, unlike its rivals, Microsoft doesn’t manage a mobile app store. Apple additionally has Google as the default search engine on Apple products, making it difficult for Microsoft to promote its own search engine, Bing. 

Microsoft’s ambitions

• The company is said to be looking at an app that incorporates shopping, messaging, web search news feeds and other offerings. 
• Microsoft’s plan is thought to have been inspired by the strategy of Chinese tech giant Tencent, whose multi-function WeChat app has become an essential for everyday life.
• By implementing an app, Microsoft hopes that more customers will use other Microsoft-based services such as Teams messaging and the Bing search engine. 
• Microsoft also hopes to strengthen its presence in the mobile gaming industry.

Sourced from The Information, 9to5Mac

Shiseido innovates in consumer engagement

With the consumer journey constantly facing disruption, Shiseido is always testing and expanding the use of new channels in order to keep up – an example that other brands can emulate to transform consumer relationships. 

Why it matters

To build loyalty among younger and increasingly sophisticated next-generation customers, brands must continually innovate their consumer engagement efforts to connect with and unify them.

Takeaways

• The use of virtual humans is a revenue generator, with such virtual influences garnering more engagement than actual humans.
• As engagement pivots to connect with consumers, the shift must move alongside emerging technologies transforming commerce.
• Social commerce is key to innovation, building efficacy and community on social media to drive commerce.

Key quote

“We innovate not just in product development, research and development but also in the way that we engage with our consumers” – Juliana Chu, Vice President of Digital and E-commerce for Asia Pacific at Shiseido.

Brands can tap the Robux spending trend

Younger consumers under the age of 13 are strengthening their financial literacy through gaming app Roblox by using its virtual currency Robux, a development that opens up new possibilities for brands looking to reach the pre-teen demographic.

Why it matters

While the established method for reaching a younger audience was through advertising, the current emphasis on establishing a strong presence on this 3-D online platform signals a shift in marketing strategy. 

Anecdotal evidence suggests children are happy to receive pocket money in the form of Robux. Brands can tap into this spending by developing effective games and creative items that users can pay for using virtual currency. 

Context

A 2021 Forrester Research study reported that children aged 12 to 17 spent around $92 monthly online. Most of that money was allocated to video games, virtual goods, clothing and accessories.

Brands such as Tommy Hilfiger, Nike, Spotify, Gucci and Chipotle have already demonstrated success on Roblox. Gucci’s Gucci Town, for example, received roughly 33 million visits, and Chipotle’s Burrito Builder has received over 17 million visits. 

Using Robux

• Kids have the option to spend a virtual currency called Robux on products featured in Roblox games. 
• It’s evident that kids are not new to spending money online, and brands can leverage this shopping habit to their advantage on Roblox. 
• Brands have tailored their messaging to younger consumers in creative ways on Roblox. Walmart, for example, allows kids to obtain virtual coins for accessorizing their avatars, while Nike allows users to pay for virtual sneakers using coins.

Final thought

“We have just scratched the surface of what it means to be a thriving and monetizing economy in these 3-D immersive experiences” – Manuel Bronstein, Roblox’s chief product officer at Roblox, speaking to the Wall Street Journal.

ONDC and the opportunity for marketers

The Indian government’s Open Network for Digital Commerce (ONDC), part of its ongoing reforms of the digital economy in the country, is set to transform online retail and offer more value to consumers.

Why it matters

There is huge scope here: online sales in India currently account for less than 8% of total retail sales, compared to around 46% in China and 36% in the UK. 

A new report from Publicis Groupe India and Digital India Foundation (DIF) – Decoding ONDC - Perspective For Marketers – highlights how businesses of all sizes, from small shopkeepers to brand leaders, can “re-imagine the e-commerce landscape and pivot to new opportunities”.

What ONDC offers

ONDC envisages a revolution in digital commerce in India by involving stakeholders in the digital ecosystem through various gateways, including a long-tail local neighbourhood supply for categories ranging from grocery to insurance.

Ultimately, more than 2 million retailers will have access to e-commerce and more than 250 million buyers will be able to purchase goods and services.

Benefits of ONDC as seen by brand leaders

• increased customer reach (82%) 
• increased brand discoverability (64%)
• reduced dependency on large marketplace providers (64%)
• reduction in average cost per sale (45%) 
• richer insights into customer behaviour (45%)

Sourced from Afaqs!, Publicis

Holiday shoppers stiffen their wallets amidst financial concerns

Consumers are shopping this holiday with cost savings at the forefront of their minds, according to research from Kroger Precision Marketing, which shows where consumers are planning to stretch their dollars to get into the holiday spirit versus where they are cutting back.

Why it matters

As inflation and financial concerns rise, and shoppers across income groups cut back on impulse purchases, buy items on sale versus full price and switch to less expensive items, brands need to demonstrate their support of budgetary challenges to diminish shopper stress.

Holiday grocery shopping 

• Price (55%), quality (39%), quantity or size (34%), convenience (26%) and then brand (17%) were the top product attributes that have increased in importance during holiday grocery shopping versus normal grocery shopping.
• On the other hand, 31% of shoppers claim they make the same considerations as usual when holiday shopping, so attribute importance doesn’t change.
• Four percent of shoppers have completed their holiday grocery shopping as of November 4, but 60% have not yet started holiday grocery shopping.

Getting into the holiday season

• For marketers looking to drive retention and protect against trade down this season, consider more personalized offers to loyal brand buyers.
• Thirty-five percent of consumers are planning to eat more healthily, so marketers should consider messaging that communicates these benefits where applicable.

Self-imposed lockdowns are a new challenge for brands

After government-imposed lockdowns during the pandemic, the immediate future is looking like one of self-imposed lockdowns during the recession as people pare down all unnecessary spending and retreat into their own homes. 

Context

Wavemaker’s Growth Trends 2023 report notes a precipitous fall in consumer confidence over the summer period and says “it’s clear the abruptness of the crisis is causing turmoil as people struggle to get on top of costs in such a short amount of time”. Out-of-home spending is the first to be cut back, affecting numerous categories, hospitality and tourism being the most obvious.

Why it matters

Brands have an opportunity to help people replicate some of those out-of-home experiences in their own homes, the report suggests. Companies need to think about how to maximise products and services for the in-home market (in the same way that Marks & Spencer’s ‘dine-in’ meal offers did during the 2008 financial crisis).

Takeaways

• Wavemaker’s research shows that 81% of people are trying to cut back on non-essential spending.
• On average, people have implemented eight new actions in the last two months to save money.
• People are open to advice and help on these matters; brands could consider partnering with ‘fin-fluencers’ to provide discoverable content on social media platforms like TikTok. 

Sourced from Wavemaker