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COVID-19 One Year On: brands focus on agility, innovation and effectiveness
COVID-19 One Year On: brands focus on agility, innovation and effectiveness
COVID-19 has led to a 30% increase in digital consumption and the formation of new and lasting consumer habits, according to the latest Global Advertising Trends report from WARC Data.
COVID-19 One Year On outlines the shifts that have taken place across e-commerce, social media, online video and gaming for brands and consumers.
E-commerce: $900bn more was spent at online retailers last year
The move to online retail has ingrained long-term habits. Brands are investing more in e-commerce advertising, which grew far ahead of the wider online ad market last year – a trend set to continue even as high street footfall increases in 2021.
Meanwhile, the growing popularity of ‘buy online for pickup in store’, being used more by between a quarter and a third of adults in the US, Mexico and India, indicates flexibility and convenience will be a key consumer strategy in the future.
Social media: TikTok was the social winner of 2020
TikTok is now the social app with the highest level of user activity, having overtaken Facebook for the top spot in Canada (TikTok users spend 17 hours a month on the app), France (17 hours), the UK (20 hours) and the United States (22 hours).
A survey for WARC’s Marketer’s Toolkit 2021 found 44% of brands expect to increase spend on TikTok this year, ahead of Facebook’s 39%.
Online video: YouTube, social video and brand integrations lure ad budgets
Online video is eroding linear TV advertising and now accounts for a quarter (26%) of the global video ad market. More than a quarter (27%) of YouTube consumption is via connected TV devices, which now poses a direct challenge to linear TV activity.
Audiences, however, care more about quality content than the delivery platform – one in five (20%) consumers globally sees no difference between YouTube and linear TV consumption; the figure is even higher in the US (36%) and the UK (27%).
Gaming and e-sports: Brands tap sponsorships, mobile creative and celebrity collaborations
Gaming and e-sports audiences grew rapidly last year, with streaming platform Twitch approaching three million monthly viewers worldwide. Audiences are also more receptive to advertising in exchange for in-game benefits, and gamers are 7% more likely to buy from brands they have seen advertised (the figure is higher in Asia).
E-sports sponsorship, meanwhile, is expected to grow 11.6% this year and top $600m for the first time, but creative opportunities for brands extend beyond this, including celebrity collaborations and partnerships.
Key quote
“The main takeaway for brands has been a greater focus on agility, innovation and effectiveness, a trend that is likely to perpetuate digital media’s rapid growth in 2021 and beyond” – Rob Clapp, Senior Analyst, WARC Data.
Download a sample report here. WARC Data subscribers can read the report in full.
How brands can earn the most important currency in wellness: authenticity
With brand authenticity in health and wellness all about picking the “right lane”, Carat’s Linda Fagerlund outlines how the stakes are now higher for brands that want to establish a meaningful presence in the wellness space.
Why it matters
Authenticity has become the hardest currency to achieve in health and wellness, more so than any other category. Brands that are serious about staking a claim in the space need to ensure they do so in the most authentic way possible.
Takeaways
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From furniture to steak houses, trains to lettuce – category-busting Japanese style
From furniture to steak houses, trains to lettuce – category-busting Japanese style
Japan’s Nitori furniture chain plans to bring its cost-slashing business model to the restaurant category with the launch of a chain of low-cost steak houses; meanwhile, Japan rail operator JR East is planning to launch itself into the hi-tech indoor farming business.
Why it matters
These are just two of the latest examples of product-category busting. And Nitori isn’t stopping at restaurants: Nitori Holdings plans to bring greater control to its supply chain by also getting into ranching in order to supply its low-cost eateries.
The details
- To cut costs, Nitori will house its restaurants in some 450 of its furniture stores around the country, each fitted out with Nitori furniture and tableware.
- JR East, which runs trains in the Tokyo area, has already established indoor farms within its Kinokuniya supermarket subsidiary and now plans on expanding the process to shops inside its stations, where vegetables will be grown at optimum efficiency, based on thousands of data points around humidity, heat, light and fertilizer, all controlled remotely by AI.
- The process, developed by Germany company Infarm, in which JR East is an investor, claims two square metres of space can yield the equivalent of 250 square metres of traditional farmland and use 95% less water.
Key takeaway
The global agtech market was worth around $9 billion last year, according to the UK analysts Juniper Research, and it is forecast to grow to $22.5 billion in 2025. The market for vertical farms, along with other indoor farming methods, is expected to grow to $6.7 billion from $2.7 billion in 2020.
Sourced from Nikkei Asia, Juniper Research
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Roku ad revenue doubles as video streaming heats up
Roku ad revenue doubles as video streaming heats up
Video streaming company Roku saw its advertising revenue double to reach $467m in the first three months of 2021, according to the latest company reports.
Why it matters
Digital video is becoming more popular, with two-fifths of online consumers now having an internet-connected TV, and this is eroding linear video activity. WARC Data's latest figures suggest linear TV advertising has fallen $47bn globally over the last five years, while online video has grown $39bn.
Takeaways
- Advertising revenue grew 101% year on year in Q1 2021, the quickest rate of growth in three years for Roku.
- Connected TV now accounts for two fifths of all online video impressions, driven by telecom, auto and CPG advertisers.
WARC Data clients can access the latest data on Roku's performance here.
Sourced from Roku, WARC Data
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Google follows Apple with new rules on data collection transparency
Google follows Apple with new rules on data collection transparency
Google is to introduce a new section in its Play app store that lets users see what personal information about them developers collect and share, as well as security settings and practices.
Why it matters
With early indicators suggesting that just one in 10 iOS 14.5 users have opted in to tracking under Apple’s new privacy requirements, the idea that Google could do something similar could have hugely significant consequences for the mobile advertising ecosystem, given that Google’s Android OS is by far the most used mobile operating system globally.
What's going on
Google says it wants developers to explain why the data is collected and how it’s used. The new requirement, due to be introduced next year, follows similar changes brought in by Apple, whose latest iOS update allows users to opt out of tracking by apps.
Back in February, Apple CEO Tim Cook warned that smartphone apps contain too many trackers and that developers would have to ask users’ permission to track them across apps in order to create targeted ads. It’s a development that has implications for ad-funded platforms like Facebook.
The details
- Just as Apple’s policy applies both to its own apps and those of third parties, so Google will require all apps in Google Play to reveal what information an app has access to, such as location of a user and contact details. It will also show if apps encrypt data.
- Users will see the new safety section in Google Play in the early part of next year and app developers will have to start sharing the information before the second quarter.
- Google says any apps that don’t comply could ultimately have their updates blocked or be removed from the Play Store.
What Google says
“If we find that a developer has misrepresented the data they’ve provided and is in violation of the policy, we will require the developer to fix it. Apps that don’t become compliant will be subject to policy enforcement” – Google’s Android Developers’ Blog.
Sourced from The Verge, Google, WARC Data
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Moldy Whopper: How Burger King broke the internet
To break out of category tropes and truly catch consumer attention, brands must embrace creativity and not be afraid to take risks. For Burger King, that campaign was Moldy Whopper.
The work was the realisation of many years spent improving the brand’s food quality, according to Fernando Machado, Burger King’s Chief Marketing Officer.
The idea
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Behind Tesco’s turnaround triumph
In 2015, Tesco – the UK’s biggest supermarket chain – was a brand in fundamental decline. The turnaround strategy required encompassed many areas of the Tesco business from improving product quality, to customer service, to repairing brand trust.
Why it matters
As a household name brand with a huge market share, it can be difficult to turn around a decline. But Tesco proves that with decisive leadership, patience and creativity, reinventing a huge brand is possible.
Lessons
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Reaching audiences without the aid of commercial media
A nightmare scenario for any marketer is having to effect behaviour change and drive sales among an audience with no access to commercial media, yet this was the challenge facing Procter & Gamble in Israel, as detailed in a WARC Rankings report: Media strategy through volatility.
Insight generation
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Adidas, Nike feel financial effects of taking stance on Chinese internal affairs
Adidas, Nike feel financial effects of taking stance on Chinese internal affairs
Adidas and Nike are the latest western brands to feel the effects of China’s attacks on companies that criticize reported human rights abuses against Uyghurs in the country’s Xinjiang region.
The two sportswear giants’ online sales have plunged following attacks on their criticism by state-controlled media, celebrities and social media. There have been widespread calls for a boycott of Nike and Adidas, along with H&M and Burberry. The reaction highlights the tension foreign brands face between speaking out, on the one hand, as their domestic customers increasingly demand, and, on the other, risking commercial damage by offending Beijing.
The details
- Morningstar analysts calculate that sales in the Adidas store on Alibaba’s Tmall, which is China’s largest business-to-consumer platform – plummeted 78% last month compared to a year ago, while Nike’s sales were down 59%. Sales of Fast Retailing’s brand Uniqlo, which was also the hit by the boycott, were down 20%.
- Consumers switched instead to domestic brands, with China Lining, being the biggest beneficiary. It saw sales on Tmall shoot up more than 800% last month, Morningstar said.
- Overall, however, sportswear sales on Tmall fell 11% per cent in April compared to the same month last year. That’s compared to over 30% growth in Q4 of 2020, Morningstar said, adding that this might indicate some consumers are sitting out the boycott rather than dropping brands all together.
Key quote
“As there aren’t renewed attacks from state media, consumer boycotts against Nike and Adidas should most likely fade over the next months.” Morningstar equity analyst Ivan Su.
Sourced from SCMP, Morning Star
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Just 11% of iOS 14.5 users have allowed ad tracking
Just 11% of iOS 14.5 users have allowed ad tracking
Only one in ten (11%) mobile users with iOS 14.5 have allowed app tracking and this drops to just 4% in the US, according to data from mobile analytics company Flurry Analytics.
Why it matters
This is a clear challenge to the more than $200bn spent on mobile advertising, which is reliant on targeting, personalisation and attribution.
The true impact on investment is yet to emerge, though, as less than 10% of users have upgraded to iOS 14.5. Flurry Analytics adds that it expects adoption to accelerate rapidly around a month after launch, which would be in the week of May 24.
Takeaways
- This is likely to make first-party data more important and will give publishers more influence in the advertising exchange.
- Brands can try use this new approach to data-driven marketing by innovating with their creative.
Sourced from Flurry Analytics, WARC Data
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App makers pursue walled gardens in reaction to Apple’s new privacy rules
App makers pursue walled gardens in reaction to Apple’s new privacy rules
Zynga, the maker of hundreds of iOS apps, is to buy the adtech platform Chartboost, in a move being widely seen as partly a reaction to Apple’s new privacy requirements.
In a change that has sent shockwaves through the ad industry, Apple now demands that every personal-data-tracking app explicitly asks users whether they want to opt out – a change that threatens to reduce ad personalisation, and so the revenue that app makers such as Zynga make from it.
The details
- The $250 million acquisition of Chartboost, reported by the Financial Times, will allow Zynga to bring the tech needed to personalise ads in-house, removing the need for it to share its data with third-party ad platforms.
- Chartboost says it reaches over 700 million monthly users and takes part in 90 billion ad auctions a month.
- Zynga rival Applovin has taken a similar route, paying $1 billion for the adtech group Adjust earlier this year. And Zynga boss Fran Gibeau predicts other companies will also create so-called “walled gardens”, gathering data from their own user base and so allowing them to cut links with external ad platforms.
Key quote
“Never let a good crisis go to waste. Through vertical integration and owning more of the ad network, [we] realised we’d get full data sets coming in” on users, creating the right environment for tailoring ads. Zynga chief executive Frank Gibeau to the FT.
Sourced from the FT
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Cost-effective tracking of reputation in the digital age
Reputation tracking is important, especially in a digital world, and fortunately there are a few easy ways to incorporate digital into a company’s existing reputation tracker, according to Meltwater’s Mimrah Mahmood.
Why it matters
Digital has accelerated how small things can have big consequences for reputation. It is therefore crucial to correctly track digital reputation to prevent any negative impact and there are a few ways to do so without too much time, effort and investment.
Top tips
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How a global pandemic will change gaming in the 2020s
The year 2020 was a breakthrough year for gaming and a report by media agency Essence explores the huge increase in exposure to and exploration of gaming, as well as the opportunities for brands and marketers.
Why it matters
Marketers have to appreciate that gaming is not a “channel” but a form of entertainment, around which a unique set of consumer behaviours has been built. The key to navigating the space for brands is understanding this considerable variation in behaviours and motivations behind them.
Takeaways
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Volvo differentiates on product safety
Volvo successfully leveraged thousands of datapoints to create a campaign that championed gender equality in automotive testing cars – and further demonstrated its brand values in making this research available to the entire industry.
Why it matters
Safety is a fundamental requirement in the automotive industry. But the auto industry’s testing is traditionally based on a male crash test dummies, meaning that the needs of women can often be overlooked.
The campaign
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Too many ads is the most damaging factor for brands
Too many ads is the most damaging factor for brands
Brand safety concerns often focus on adjacency to inappropriate content, but it is an excessive number of ads that is most damaging for brands.
This is according to research from target audience company GWI and is just one of the findings from WARC Data's latest analysis report, Global Ad Trends: COVID-19 One Year On.
Why it matters
This can be difficult for marketers to manage, though, as the growing number of channels used by consumers has made cross-media measurement more important but far from straightforward.
Takeaways
- Half of online consumers say too many ads damage their view of a brand.
- This is followed by ads that block content (39%), are not relevant (37%) or are next to inappropriate content (31%).
TV and takeaways get UK consumers through lockdown
TV and takeaways get UK consumers through lockdown
People turned to TV and takeaways to a greater extent in lockdown 2021 than they did during the first lockdown in 2020, IPA TouchPoints 2021 data reveals.
Key findings
- Compared to pre-lockdown 2020, time spent watching any form of TV rose 14% in the first lockdown in 2020 and 17% in lockdown 2021 (to an average 4hrs 29 minutes per day).
- Compared against pre-lockdown 2020, the number of people ordering takeaways or food deliveries during the first lockdown in 2020 rose 5.5%, but leapt by 45% in lockdown 2021.
- Two thirds (66%) of TV and video viewing during lockdown 2021 was live or recorded; this rises to 89% for over 55s but just 27% amongst 15-34s.
- Other video (shorter and longer online video) took a 19% share of all TV and video viewing for 15-34s compared to 7% for all adults and just 1% for over 55s.
- Paid-for on-demand video was up to a 40% share for 15-34s compared to 5% for over 55s (19% for all adults).
- The popularity of TikTok soared for 15-24 year-olds, reaching 43% of them, up significantly from 13% in pre-lockdown 2020 and 30% in the first 2020 lockdown.
Final thought
“These latest figures … reveal interesting insights into how some good intentions from the first lockdown perhaps slipped into bad habits in lockdown 2021, as we grew increasingly weary and less communicative” – Belinda Beeftink, Research Director at IPA.
Sourced from IPA
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Redefining the romantic ballad… with beer
Redefining the romantic ballad… with beer
DB Breweries broke out of category norms with ‘I’m Drinking It For You’, a smash-hit R&B ballad which shoppers couldn’t help but notice.
The details
DB Breweries’ new extra low-carb beer needed to make a splash with beer-loving Kiwis, and in a category where there were already several competing products. To make it more permissible to the mainstream, DB Breweries wanted to lead with an emotional benefit rather than functionality, which defined the marketing of competing products.
Why it matters
New product launches in crowded categories require creative, attention-grabbing ideas, especially outside the peak launch season. Done well, these campaigns can pay off in the long term.
Key takeaways
- Don’t skimp on the detail - ensure every part of the campaign, from casting to channel selection is well thought out.
- By launching an ‘off peak’ for beer-drinking season, DB Breweries was able to take advantage of a quieter advertising period for the category and build brand awareness through the year.
- Embrace big attention-grabbing creative ideas and follow them through.
The Souled Store bets on an omnichannel strategy
The Souled Store bets on an omnichannel strategy
In just eight years, online apparel brand The Souled Store has carved out an enviable niche for itself among a young, pop-culture-crazy audience looking for authentic, quality clothing; founder Harsh Lal talks to WARC about how the brand has seized opportunities during the pandemic and why it is adopting an omnichannel focus going forward.
Key insights
- The decision to begin as an online-only operation was because offline was more expensive and online could reach the whole country.
- For the company, online will always expand significantly faster than offline as it cuts across geographies, but offline stores are a great branding opportunity.
- The pandemic gave rise to working from home, a development that boosted The Souled Store because of the casual-wear products it sells.
Final thought
“We have managed to ensure that every offline store of ours is profitable including pre-lockdown and post-lockdown, which is not something a lot of brands have managed to do” – Harsh Lal, co-founder and director of The Souled Store.View more
24% of young Australians say social media gives them anxiety
24% of young Australians say social media gives them anxiety
One-quarter (24%) of Australians aged between 16 and 24 say that social media gives them anxiety, while only 7% of those aged between 55 and 64 say the same. This is according to survey data from target audience company GWI.
Why it matters
In the wellness economy, there is a growing need for healthcare solutions to prevent poor mental health and this is providing new opportunities for brands to connect emotionally with consumers. However, marketers need to consider if they have permission to operate in the wellness space before incorporating health and wellness into their strategy.
Takeaways
- Half (53%) of respondents aged between 55 and 64 feel comfortable talking about mental health.
- The latest WARC Spotlight Australia contributors provide some key considerations for marketers before incorporating health and wellness into their strategy.
Sourced from GWI, WARC Data
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