Marketers up traditional media budgets amid increased competition

Marketers are increasing their budgets for ‘main media advertising’, even as overall marketing budget growth stalls, as companies look to build brand recognition and expand customer bases despite political and economic uncertainty.

Following a surprise return to growth in the opening quarter of the year, the IPA Bellwether report for the second quarter shows overall growth has stalled, with the net balance of marketers increasing spend falling from 8.7% to 0.0%.

While 20% of panel members reported greater marketing spend, this was offset by those cutting expenditure. The remaining 60% made no change at all.

Growing economic uncertainty, continued ambiguity over Brexit and the additional risk of a change of political leadership in the UK were mentioned by firms as factors expected to challenge the business environment over the coming year. This has created hesitancy among clients and delayed decision making.

Panel members raised concerns that difficult conditions domestically are damaging consumer confidence and impacting consumption. Businesses are also wary of headwinds from external sources, particularly spillover effects into UK markets from global trade disputes and weaker growth at key export destinations such as Europe and Asia.

“Between Boris, Jeremy and Brexit, coupled with a dip in consumer confidence, it is perhaps no wonder that this quarter’s Bellwether shows zero growth to overall UK marketing budgets,” says Paul Bainsfair, IPA director general.

“Until a clearer political and economic path is outlined, the vast majority of companies are in stasis.”

Rising traditional marketing budgets

While overall budget growth flatlined, main media budgets (which includes channels such as TV, radio, outdoor and cinema) saw growth as some firms used big ticket marketing campaigns to build brand recognition and expand customer bases. There were also suggestions that marketing was being deployed as a defensive strategy due to increased competitive pressures.

Overall, a net balance of 5.6% of companies reported greater main media marketing budgets, up from 5.2% in Q1 and 4.9% in the same quarter a year ago. This is the highest level reporting budget growth in two years.

“It is reassuring to see that some companies are revising up their investment in main media advertising; this is where they will build the longer-term growth of their brands, which is crucial to weathering these tougher times,” adds Bainsfair.

At the same time, growth in internet advertising budgets slowed, with a net balance of 11.5% of firms reporting budget growth in Q2, compared with 17.2% in Q1. Marketers ring-fenced technological improvements and social media channels as key drivers of growth.

The only other sector to register growth in the second quarter was events, with the net balance of marketers increasing spend rising to 4.8%, from 3.4% in the previous quarter, its highest level since the first quarter of 2018.

However, available spend for market research fell for the 16th consecutive quarter, while PR budgets were also cut. Sales promotion budgets recorded their second successive quarter of cuts, while direct marketing budget spend fell to its lowest level in more than 10 years at a net balance of -9% expecting to cut investment.

Marketers remain downbeat

Marketers remain negative towards financial prospects and have cast more downbeat assessments towards both industry-wide and company-own finances than seen during the opening quarter of 2019.

With 34% of marketing executives reporting a pessimistic outlook towards finances in their industry, compared to approximately 8% that were optimistic, the resulting net balance (-25.6%) signalled the second-most negative assessment since the fourth quarter of 2011 (surpassed only by the Q4 2018 reading of -28.6%). Furthermore, this was down from a net balance of -22.6% in Q1.

The latest data also points to deeper negativity towards own-company financial prospects. The net balance fell to -9.8% from -2.7% in the first quarter. This is the highest degree of pessimism since Q4 2011.

The post Marketers up traditional media budgets amid increased competition appeared first on Marketing Week.

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‘It’s much easier when you win’: How NatWest rode the rollercoaster of England’s Cricket World Cup triumph

NatWest Cricket World CupOne of the benefits of being CMO of the principle sponsor of the England and Wales Cricket Board (ECB) is that when the team reaches the final of the World Cup you get to be at Lord’s watching on.

“It was a complete rollercoaster ride that went down to the absolute wire. Astonishing stuff,” exclaims NatWest CMO David Wheldon, speaking to Marketing Week.

“What we have just seen is a bunch of people who, in a generation’s time, will be known for winning the World Cup. We like that because it completely chimes with our brand values of ‘don’t listen to what we say, watch what we do’ because [our marketing strapline is] ‘we are what we do’.

“It was a nice moment for the country, the England cricket team, for diversity and inclusion, and nice that all of that is good for NatWest too.”

NatWest has had an association with English cricket for 38 years, making it one of the longest partnerships in sport. Then, in 2017, it came on board as the principle sponsor, launching the #NoBoundaries campaign at the same time. That campaign aims to promote a message of diversity and inclusion, prescient given the make-up of the England team that won the World Cup.

NatWest says ‘pride’ is returning to the brand as it launches diversity push

“This [partnership] is a real meeting of the minds. When we spoke to the ECB about doing this [sponsorship] in the first place, we talked about the platform we wanted to do it from, they talked about where they were, and it was one of those things that entirely matches,” explains Wheldon.

Preparing for success, and failure

NatWest could not have foreseen the success the ECB would go on to have. In 2017, not long after the deal was signed, England’s women won the World Cup. On Sunday, the men matched their success, winning what has been described as one of the best games of one-day cricket ever played.

“The year we restarted on the shirts, the England women won the World Cup. There couldn’t have been a better way to start. And here we are with the England men winning the World Cup. Hopefully we will win the disabled cricket World Cup and get the hat trick,” says Wheldon.

“In sport you can’t depend on results but when the results go your way it makes the strategy much easier.”

As with most sport sponsorship campaigns, NatWest had to ready content for every eventuality. So for every tweet or Facebook post congratulating the team, there was an option B they would have used had the team lost.

That was the case for the print ads NatWest ran yesterday (15 July) across national newspapers. They featured the line ‘Never in doubt’, which Wheldon admits was written before the drama concluded on Sunday but actually ended up playing well among fans.

“Ironically, those headlines were written before the game played out the way it did. And I was looking at the options thinking, it was in doubt quite a lot. But I quite like the irony of it now that we’ve won.”

In sport you can’t depend on results but when the results go your way it makes the strategy much easier.

David Wheldon, NatWest

NatWest has looked to instil its brand values across the sponsorship. While the #NoBoundaries message chimes with NatWest’s broader brand positioning, it has looked to bring to life other aspects of its customer experience in activations around the event.

For example, it has been using a machine that can replicate the balls of any over ever played and asking people on social media to vote for the over they would like former all-round Freddie Flintoff to face again. That was then re-created with Flintoff “facing himself” for a video on social media.

Then at King’s Cross yesterday and today people can go down and try to play against the last overs exactly as they were bowled by New Zealand and England.

The plan was not to do much above-the-line, but when Sky made the final free to watch on Channel 4, NatWest and its agency M&C Saatchi pulled together a 60-second edit of the video to run during the match.

Measuring sponsorship impact

Wheldon says the sponsorship generally, and the win in particular, have “done a lot” for the brand. One of the most important measures is “internal pride” as NatWest looks to make its staff proud to work for the bank once again as it continues its recovery from the banking crisis in 2008.

“For us [internal pride] is really important because we signed this deal when we were still in the grief of recovery. Therefore building colleague pride and engagement is an important part,” explains Wheldon. “These days we are making a profit again, we are paying dividends, the pride is coming from within. This sort of thing has a massive impact.”

Cricket also resonates well with its customer base, which it can see in its brand metrics. NatWest is using artificial intelligence to measure sentiment around press coverage of its campaign, which Wheldon says was positive even before the win.

Social metrics such as clicks and views have also been “good”, despite Wheldon saying he remains “deeply cynical” about them, and NatWest can track people visiting the NatWest site after seeing something on social media.

We are not the best bank yet in customers’ eyes and we aren’t interested in being number five or six, we’re interested in being number one.

David Wheldon, NatWest

“We don’t do this for cricket alone, we do this to help build the NatWest brand so [we are interested in] brand metrics of every nature,” he says.

“But the simple ones are: it’s good for internal pride, it’s good for brand engagement and it’s good for people feeling good about NatWest.”

Despite improvements in these brand metrics, Wheldon admits NatWest “isn’t where we want to be”. The Competition and Markets Authority (CMA) is due to publish the next ranking of banks’ customer service on 15 August and NatWest doesn’t expect to be near the top despite its trust scores and NPS “building”.

“We are not the best bank yet in customers’ eyes and we aren’t interested in being number five or six, we’re interested in being number one,” he says. “We are on the way and we have some green shoots and positivity. [There is] quite a long way to go but compared to where we were four years ago we’ve been on a remarkable journey,” he says.

“I would bill all of this as a work in progress and pretty good, but good is never good enough. It won’t be [good enough] until we are up the CMA tables and that will take a while yet. Next time we win the World Cup we’ll be number one definitely.”

The post ‘It’s much easier when you win’: How NatWest rode the rollercoaster of England’s Cricket World Cup triumph appeared first on Marketing Week.

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Digital TV must overcome its contradictions if it wants to attract more ad dollars

smart tv connected tvIf you talk to a young person about linear TV, they may snigger at the idea of checking listings in a print newspaper, writing out a schedule or remembering to tune in at exactly the right time. They might think it baffling that revellers used to get home from the pub and ‘see what’s on’.

These are the same youngsters who post on social media about spending half an hour finding something to watch on Netflix and then ignoring the show to stare at their phones. Don’t worry, this isn’t going to be a wistful article about the value of serendipity, but it is about contradictions; namely those in over-the-top (OTT) and video-on-demand (VoD) advertising.

Ad growth lags user growth

OTT services (which viewers access over the internet, sometimes via their TV sets) have seen rapid growth.

It’s almost a year since Ofcom revealed there were more UK subscriptions to Netflix, Amazon and Now TV than to ‘traditional’ pay TV services such as Sky, and that pay TV revenues were in decline for the first time. In 2018, the Video Advertising Bureau said 71% of internet users in the US use an OTT service at least once a month.

There’s obviously still some inertia, though, from advertisers. In an oft-quoted Magna Global stat (which I regrettably couldn’t find a source for), OTT apparently accounts for 29% of TV viewing but only 3% of TV ad budgets.

Netflix isn’t ad supported, so that partly explains this disparity, but it’s still a striking stat. Other estimates have OTT ad spend in the US at roughly 4% of linear TV ad spend. The Winterberry Group predicts that growth in US OTT ad spend will drop from 42.2% in 2018 to 20% in 2019.

What’s the reason for this inertia, given OTT seems to be maturing?

Measurement is one difficulty often cited, with no consistent set of metrics across OTT services (which play across a range of devices that can’t all be cookied), contrasting with linear TV and its well-established Nielsen ratings. That’s a puzzling one though: isn’t digital meant to bring with it accurate targeting and tracking?

Recent developments in the market certainly seem to be all about targeting in OTT, as a counterpoint to the sheer scale of linear TV. Adobe now allows customers using its Audience Manager and Advertising Cloud products to target first-party audience segments on Roku, the OTT platform.

Channel 4 is also set to allow advertisers to do the same on its All4 VoD platform.

And Amazon is pitching its data and OTT video inventory (chiefly across Fire TV), with Business Insider revealing a pitch deck that references a beta ad programme called ‘ad-attributed search’ that measures if an ad results in more searches on the Amazon website.

Soon enough, the silos of digital and TV that exist among clients and agencies will break down, and hopefully the so-called golden age of TV will also see a golden age of advertising, both creative and relevant.

Is this a tantalising glimpse of OTT platforms soon offering the best of all worlds?

I can certainly admit to binge-watching The Shield on All4 recently and getting a little curious about just why I was being shown ads for over-the-counter Viagra and robotic lawnmowers.

The familiar feeling of being personally targeted on a computer may well become much more common on your TV set, though it’s worth adding that however much OTT trumpets its ability to deliver one-to-one advertising, internet TV is still TV, and therefore most often a one-to-household device.

Sick of the same ads?

Frequency caps seem to be another contentious issue in OTT which, as a consumer not an ad man, I find fairly surprising. Though I’m sure there’s research out there on this subject, frequency capping seems to me to be less sagacious now than in previous decades.

Speaking from personal experience again (always dangerous, I know), I have been shown a particular Strongbow ad hundreds of times when bingeing on All4 (The Shield, worth another mention) and it has become a bit of an in-joke between me and my wife.

We’ve got an advertising form of Stockholm syndrome; we enjoy the ad more with every view and drink cider with every meal (I’m half serious). In a world of ever more adverts and ever quicker product turnover, I see frequency as effective, if expensive.

Pricing is another issue in OTT. Frequency caps are said to be one of the reasons that lots of OTT inventory is unsold, but it has presumably also got something to do with price, with OTT being fairly punchy (to prevent broadcasters’ linear TV advertisers decamping to digital).

Though there are lots of issues that seem to make OTT advertising complex (this is digital advertising, after all), the power of advertising on the TV set in the heart of the home should surely be all that advertisers require to be convinced. This is the only advertising, in my opinion, that people will willingly engage with.

With OTT exploding, both advertising and branded content are worth exploring now, before the stakes get even higher.

Tellingly, YouTube sees the writing on the wall. Digiday reported in March that the company has made TV a central part of its ad pitch – telling advertisers that people spend more than 200 million hours watching YouTube on TV sets, and also separating out TV inventory.

Soon enough, the silos of digital and TV that exist among clients and in agencies will break down, and hopefully the so-called golden age of TV will also see a golden age of advertising, both creative and relevant.

The post Digital TV must overcome its contradictions if it wants to attract more ad dollars appeared first on Marketing Week.

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Vauxhall boss admits brand positioning was ‘unsustainable’ as he drives turnaround strategy

VauxhallWhen Stephen Norman took over the top job at Vauxhall, he was well aware he had a Herculean task before him as the car brand battled declining sales and a loss of identity.

The brand had positioned itself solely on price but this was “unsustainable” and parent company Groupe PSA – where Norman had been senior vice-president of sales and marketing – flew him in to turn the positioning around.

Norman, who waves his hands when animated and peers over his rounded spectacles to emphasis a point, is unafraid to admit Vauxhall had “lost its way”.

“Our issue isn’t the loyalty of our customers, our issue is getting additional customers from other brands. That’s the job I’ve been sent here to do.” And he admits it is a “massive” task that sits before him.

Despite his candour he is careful not to criticise his predecessors. He says there’s nothing wrong with Vauxhall selling cars positioned on price, because the strategy had been working, “which is not easy to do, even in today’s car market”. But Vauxhall now needs to focus on more than price to reverse the slump in sales and futureproof the brand.

When Norman arrived in February 2018, Vauxhall’s market share was 7.4% and declining. He has pledged to increase this to 9% by 2021, with marketing key to this turnaround.

“Marketing can’t make a good car out of a car that’s average, but there’s nothing wrong with Vauxhall cars. What marketing can do is draw attention to them and make sure the value proposition is sufficiently intriguing to say ‘I’ll take a look’,” he explains.

Norman likens the changes he’s made to the business structure to reorganising the drawers in his desk. “I didn’t have to take any drawer out and turn it upside down, but I did have to rearrange everything in each one. Retail, network development and communications – all of them needed a little bit of adjustment.”

There are some areas of communication that, no matter how much you may personally like them, will offend people, and there is no benefit in offending people.

Stephen Norman, Vauxhall

He started the process by doing a deep-dive into all Vauxhall’s data.

“It can only start by taking a look at the brand fundamentals, whether that is the content of images, or the main KPIs, awareness, image, price, positioning,” he explains.

His conclusion was Vauxhall’s marketing was “transparent”. “I don’t think it was bad, I wouldn’t say it was invisible – that would be really cutting as there was huge amount of money being spent on football sponsorship, etc – but it was transparent, so you could see through it.

“From that I mean if you asked someone for their image of Vauxhall they would say ‘Is it good? Yes. Is it bad? Possibly. Does it bother me? No, it doesn’t. Does it interest me? Not a lot.’“

In defence of marketing

Prior to Vauxhall, Norman spent nearly four years heading up marketing at Groupe PSA, during which time he concluded corporate and brand marketing are like “chalk and cheese”.

He explains: “The need to oscillate between one or the other is absolutely essential. If you do [brand jobs] for too long you forget how to do [corporate] and if you do [corporate] for too long you die of boredom, so you need both.”

Is there one he prefers? “Well, I was bloody glad to come here and get into operations,” he laughs. “I am old now so this will probably be my last mission, but if I were a younger man there would be a point where I would say, ‘OK, I’ve done that now and I’d like to go back and do something cerebral and strategic’. The two have their charms. I get bored easily so I need both.”

Norman is unequivocal in his passion for the science of marketing and is quick to defend the industry unprompted: “The marketing industry has been considered a bit of a joke industry before; there is a science to it and it requires an incredible amount of application.”

This opinion also extends to leadership: “There is almost no limit to the demanding nature of a successful marketing manager. Transferring that to a managing director’s role is but a short step. But I don’t think I’ve ever seen a successful managing director in my career – and I have been in five different corporations in various different places – who was lackadaisical or just intuitive. It requires an incredible amount of application.”

Under pressure to deliver

This demanding nature is not without its drawbacks, something which Norman reflects on. “I am least proud of the hurt I could have caused to people through the fact that I am very seldom satisfied with anything.”

Has he softened in old age? “Possibly. When you are a perfectionist it is difficult not to be one, but you’re not always right so you have to moderate it, don’t you? As you get older it gets a bit better, but I wouldn’t say I am easy to work for in any shape or form.”

This inability to be satisfied also takes its toll on Norman who admits that “bad sales results” keep him up at night. “I was up this morning from two o’clock to three o’clock walking round the house thinking how are we going to do the second quarter?”

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For a self-diagnosed perfectionist Norman is not shy about admitting his failures: “I’ve made many, many, many mistakes, one or two of which have cost me my job. And when that’s happened to you a couple of times you’re bloody careful you don’t make those same mistakes again.”

While he didn’t lose his job over it, there is one mistake that sticks in his mind in particular – the 1998 French launch of the Volkwagen’s Golf 4, which depicted The Last Supper.

“Jesus Christ extended his arms and a bubble came out of his mouth, which said ‘Rejoice, the new Golf has arrived’,” he says. There was also an iteration featuring St John the Baptist taking out the rubbish.

Unsurprisingly, the ads were met with criticism from religious groups and Norman saw “the whole world collapsed around our ears”. He even received Bibles with messages like, ‘as you’re going to hell there may be some redemption if you start reading this’. “I got a lot of that sort of stuff it was really heavy,” he recalls.

If you do [brand jobs] for too long you forget how to do [corporate] and if you do [corporate] for too long you die of boredom, so you need both.

Stephen Norman, Vauxhall

It also had repercussions for his career. Norman was called to the head office in Germany and given a written warning. The painful memory, and the lessons he learned, are clearly still on his mind 20 years later.

“Firstly, you learn there are some areas of communication that, no matter how much you may personally like them, will offend people, and there is no benefit at all in offending people. Secondly, there’s no gratitude in offence. You don’t have to offend people to make good adverts”.

Lastly, he learnt the importance of loyalty – and how quickly it can be lost. “Some of the people around me who approved the advertisement, when the going got hot, very rapidly forgot they had ever actually seen it or approved it. The advertising agency concerned [DDB] were solid as a rock throughout and I still have very fond memories; I’ll never forgot their loyalty.”

However, he is clear he only had himself to blame: “There is no point getting angry at other people, but you can get angry at yourself. You can say, ‘why did I do that? Is it some sort of exaggerated narcissism? What made you think that could work?’”

Why you should never say ‘yes’ to agencies

Aware of the gigantic turnaround task ahead of him when he arrived at Vauxhall last year, he wasted no time in meeting with the brand’s dedicated agency Velocity, which is part of McCann.

“I distinctly remember Velocity saying, ‘how long are you giving us to come back with [our proposition]?’ I think they were expecting me to say six months or maybe a year, but I said I’d like a first draft in two weeks and to have it approved in four.”

Velocity came back with ‘A British Brand Since 1903’, and Norman had it approved by the board less than two months since setting the original brief.

However, he is clear that focusing on nationality alone is enough to increase market share. “It is important to remember that in spite of repeated efforts by many manufacturers in various countries, nationality doesn’t sell cars. It is not a reason for purchase, it used to be but you have to go back half a century [to find that].”

A year after launch, Norman says he is tentatively pleased with the results. “I’m not going to say to you we’ve cracked it, but we’ve stopped [sales] going down. Now the job is to make it go up.”

VauxhallHe is also clear the focus on Britishness won’t be Vauxhall’s long-term positioning. “This is what we will do for the time it takes to turnaround the brand’s fortunes in the UK. Then it will be time to look again and say that’s what we did in the turnaround phrase, now what do we do in the power-up phrase?”

It’s no secret that brands are streamlining the number of agencies they work with, with Volkswagen last year culling its roster by 90%.

He explains: “If the notion of a roster agency means you have to put up with crap then it’s a bad idea. I would never be loyal to a roster agreement if the work coming through wasn’t good.”

However, he says he would never rule out having an agency roster – so long as it performs for the company.

He adds: “One of the methods I have always adopted, whether it is media agencies or creative agencies, is that the agency will stop working the moment the client says yes. I still apply that. You never say ‘yes’, you just say ‘it’s not bad please keep working’ and then eventually the deadline traps you.”

“We will be loyal to McCann as long as McCann are on the button. The day their not we’ll be off.”

‘The car industry marks you’

Norman clearly knows a lot about cars having worked in marketing for brands including Volkswagen, Fiat and Renault over the past four decades. Without pausing he reels off specific makes, models and campaigns. However, this is more from necessity rather than sheer passion.

“If I am honest I have tried to move about, but the motor industry marks you. It marks you in terms of making you want to stay but it also marks you as unmarketable, principally because of the life cycle of the product.”

He last tried to move out of the industry in the 1990s in the hopes to transfer to the “snappy marketing” he’d seen his father do at Unilever for more than 40 years.

“If you are in marketing in the motor industry and you’re dealing with a life cycle of seven years and you go to L’Oréal or into pharmaceuticals people will say, ‘OK, but how does your skill set transfer to mine?’ You can say you’ll give it a bash, but they will say, ‘we don’t want people to give it a bash, we want people who know how to do it’,” he explains.

“People who’ve been in FMCG are not always successful in the motor industry for the same reason.”

Knowing all this would he still go into motor industry now? “I wouldn’t be quite so certain as I was 43 years ago,” he says, adding: “I’m not sure I would recommend to one of my children to go into motor industry marketing if they want to have a decent work-life balance”.

The post Vauxhall boss admits brand positioning was ‘unsustainable’ as he drives turnaround strategy appeared first on Marketing Week.

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How one company has built its brand reputation on a single product

Going from a single sewing machine in California in 1974 to being stocked in hundreds of retailers across the globe, founder-led rucksack specialist Osprey is carving its own niche in the outdoor sector having built its reputation on a single product.

Osprey’s new marketing director, Gary Burnand, says specialising in backpacks alone ensures the brand “doesn’t get distracted” by the industry, maintains its core focus, and sticks to what its good at.

“What it means is, we can bring all that past experience to bear in our innovation. It means we don’t get distracted into other areas, so we’re very clear about what our core focus is and how we optimise that versus the competition,” he tells Marketing Week.

“We’re always working closer with the design and production team to find innovative ways to meet the needs of consumers.”

Osprey’s founder Mike Pfotenhauer is still heavily involved in the design process. In fact, every product design passes through Pfotenhauer, who still has the role of chief designer.

While there are known challenges of working with founder-led companies, Burnand says Pfotenhauer continued involvement enhances consistency and means Osprey doesn’t have to answer to shareholders.

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“He’s just got such amazing passion and vision to continue to evolve and find superior solutions to problems. Having someone who has that consistency and thread right the way through the brand is an incredible resource that we’ve had,” he says.

“Our ownership means we can take long-term view points on things as well, we’re not having to be dependent on the markets and work to short-term shareholder demands. We’re able to take a longer-term [view] in terms of our design, production and innovation funnels.”

Balancing brand story and design innovation

Having only joined Osprey in April, Burnand still has plenty to uncover about the business but brings a wealth of knowledge to the role. He has previously worked at Kraft Food, Levi’s and Barbour, and until recently ran his own consultancy.

At Osprey, the marketing strategy is focused on two things: telling the story of the brand in order to build its status and pushing the quality of its design technology through its ability to innovate. To do that, it has a focus on not just content marketing but digital and influencer marketing, working closely with athletes and ambassadors.

“We’re continually evolving [the marketing strategy], it feels like on a weekly basis, especially in terms of how we are working particularly with influencers in one area while pushing out into related categories such as travel and lifestyle,” explains Burnand.

We don’t get distracted into other areas, so we’re very clear about what our core focus is and how we optimise that versus the competition.

Gary Burnand, Osprey

One of the biggest challenges Osprey faces is stealing market share and attention from established competition. And given the company is branching out into travel and lifestyle, rather than just being for outdoor enthusiasts, it has to work hard to differentiate itself and disrupt the sector.

“The marketing challenge we face is around competition. We’re very clear about where we want to go but inevitably different markets have historically different bag and luggage brands that have already been established, so market by market we face different challenges,” he says,

The company is also focused on keeping up with evolving consumer demands, an ever-changing communications environment as well as finding suitable retailers that will help sell and tell the Osprey story.

“Consumers are being more demanding all the time but we consider we are well positioned to respond to those demands,” Burnand says.

“Being able to, and continuing to, deliver a relevant and exciting experience in retail is an interesting challenge and one that is going through a huge amount of change at the moment. But it will always be important for us to find powerful ways to tell those stories with retail partners because they help authenticate our brand.”

For Burnand, overcoming any challenges and nailing its marketing brief comes down to two key factors: great creative and sharing the brand’s story through the most appropriate channels.

“It’s about two areas: how we powerfully tell the story of our brand and how we activate that through creative, but also how we use the right cutting-edge channels to speak to people and direct those messages,” he says.

“[We have the] ability to really target consumers in a way we’ve never been able to do, in terms of the specificity it is incredible, and this is really done through powerful storytelling.”

Osprey is also a strong believer in having a positive impact on the planet, which feeds into the idea of essentialism that Burnand says is a current trend in the outdoor space.

“It is about having a focus on things that are really important. What do you need? What do you not need? I believe in the vision of the company and the sustainability of the company and the business model,” he concludes.

“It’s not about consuming for consuming’s sake, we’re at a stage where we have to consider every purchase and whether it’s necessary, how does that product affect the planet that we live on and how will that product be with us across the journey.”

The post How one company has built its brand reputation on a single product appeared first on Marketing Week.

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Watch: Ritson on how Snickers perfectly balanced differentiation and distinctiveness

In 2009, Mars’ Snickers brand was in decline – losing sales and share. Its campaigns had no clear messaging to differentiate the brand from rivals, while it was under-using the distinctive assets it had established over decades.

Fewer customers were recognising the brand behind its campaigns and those that were were struggling to understand how it was different from anything else in the market.

In this video, Marketing Week columnist Mark Ritson explains how the Mars-owned brand tackled the problem by communicating its point of difference through new positioning and making better use of its brand codes.

Its 2010 Super Bowl ad introduced the new strategy. Featuring actor and comedian Betty White coming off worse in a football game until eating a Snickers bar and transferring into an athletic young man, it had a clear message – when you’re hungry, you are not yourself, and Snickers can help.

Ritson explains how the positioning was transferable to other countries and media channels. At the same time, the brand began to make better use of its distinctive assets – logo, pantone, the red parallelogram and ‘rip and chew’ product shot – in a series of executions.

The new strategy of clear differentiation and clever use of distinctive assets was an immediate success with the sales decline first arrested and then reversed. Sales increased by 15% globally between 2009 and 2011, and in 56 and its 58 markets sales were on the up again.

This video is the latest in a series where Ritson will reveal the stories behind some of the most effective campaigns ever based upon case studies from 50 years of the Effies, including Apple, Gillette and Lidl, as we examine what makes marketing more effective.

You’ll be able to see more in the series on our dedicated marketing effectiveness page.

Mark Ritson teaches the Mini MBA in Marketing. For more information go to https://mba.marketingweek.com/

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Monzo sees ‘insane’ growth after running first TV ad campaign

Monzo is reaping the benefits of its first major TV ad campaign, seeing spikes in both brand awareness and app downloads that suggest more “traditional” advertising can pay off for the fintech challenger.

The campaign, which launched on TV towards the end of May, aimed to articulate Monzo’s brand voice and promise for the first time.

It included four TV spots – one 60-second and three 30-second versions – that promoted the brand while also highlighting features such as money management and tackling perceived barriers to opening a digital bank account.

The impact on sign-ups was immediate. June was “by far” Monzo’s biggest month for sign-ups, attracting more than 250,000 new customers, up from 150,000 a couple of months before. And prompted brand awareness increased 13 points from 35% to 48%.

Speaking exclusively to Marketing Week, Tristan Thomas, head of marketing and community at Monzo, explains: “Clearly we went into this looking to see a significant uplift in downloads and people creating Monzo accounts. It was pretty insane actually. We saw in June by far our biggest month of sign-ups… and we are still seeing those impacts today.”

Thomas says Monzo is still seeing a run-rate that would work out at 200,000 new customers in July, meaning the campaign has already brought in more than 150,000 new customers. And these new customers are sticking around, using the app “relatively similarly” to current users.

“It shows us the power of traditional advertising,” he says. “It definitely opens the door to a whole new world beyond the organic marketing we have been doing up until now.”

Monzo preps first major ad campaign as it looks to ‘supercharge’ growth

Monzo didn’t give itself a lot of time to create the campaign. Its brand lead Vicki Reeve only joined in January and was given little more than three months to go from creating the brand strategy to launching the campaign.

That doesn’t mean, she says, that Monzo skipped any steps, but it tried to speed the process up by making faster decisions and being really transparent with its agency Engine, which it brought on board as creative consultants. For example, the Monzo marketing team was shown three creative ideas for the ad campaign in the morning and had made the decision on which to go for by the afternoon.

“It was manic. But that is how all the best ideas come to life, because you don’t really have time to second guess yourself,” explains Reeve. “We just had to work quickly with the research we had but also follow our gut instinct in terms of how we wanted to express the brand.”

Talking on a more emotional level

This brand expression sees Monzo try to come across as a bank with more personality and humour than traditional banks, while setting itself apart from other challenger banks by focusing on the brand rather than talking too much about functionality.

“When we were looking at how to tackle this, we looked at what competitors were doing and we felt like there was this really great category job being done, especially in out-of-home through an education piece around functionality and how digital banking works,” says Reeve.

“We really felt like that had already been done so that gave us an opportunity to speak on more of an emotional level, to bring our brand personality out a bit. We humanised Monzo with the voiceover actor Hugh Skinner, we really felt like that gave us an advantage with our customer proposition.”

It was manic. But that is how all the best ideas come to life because you don’t really have time to second guess yourself.

Vicki Reeve, Monzo

While TV was the main bulk of the spend, the campaign also ran in outdoor – mostly in transport hubs – and was implemented across its own media, including on its social channels and website. Monzo also looked to engage its community in the ad, asking them for ideas on what a Monzo TV should look like and inviting them to a screening the night before the campaign went live.

The final results of the campaign are still coming in, with Monzo keen to do a deeper dive into the type of user it attracted and their value, as well as awareness and buzz. Then the marketing team will look at how to sustain that growth without having to be on TV all the time.

Reeve says the numbers look “really promising” and the campaign will help decide if TV is a “viable media” for Monzo. But going forward she believes Monzo might need to do on TV to show off the app and its functionality.

“The hardest thing in this campaign was the balance of building an emotional brand connection versus direct response. We got a good blend but moving forwards I would love to see more ads around the functionality of Monzo and show the app a bit more,” she concludes.

“It’s difficult in 30 seconds to show a card plus an app. The TV ad has to do one thing and that is get people in. That is something we want to weigh up in the future.”

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Retail footfall, FMCG profitability, empathy in marketing: 5 killer stats to start your week

Profitability of the top 50 FMGC giants reaches highest level in 17 years

The profitability of the top 50 global FMCG companies reached 18.2% in 2018, the highest level since the study began in 2002.

Organic growth climbed by 3.2% year on year, up from a growth rate of 2.6% in 2017. The majority of that is now coming from volume growth, which accounted for 1.8 percentage points of growth, with price/mix coming in at 1.4 points.

Deal activity was driven by a desire to shift towards fast growth areas and strengthen existing positions. But with lack of mega-deals, merger and acquisition deal value fell 48% from 2017, to $75bn (£60bn). However, deal volumes remained high at 55 compared, although this was below 60 in 2017.

Chinese spirits producer Kweichow Moutai entered the global 50 for the first time, knocking out Brazil Foods Nestlé; while Procter & Gamble and PepsiCo retained their positions at the top of the list.

Source: OC&C Strategy Consultants

Marketers fail the empathy test

Those who work in the marketing and advertising industry are no better than the average person at understanding other people’s emotions and perspectives, despite this being a key skill for marketers.

Using an empathy scale developed by academic psychologists, a study found that only 30% of people working in the advertising and marketing industry displayed high levels of perspective taking and affective empathy. This is compared to 29% for the ‘modern mainstream’ – the middle 50% of the UK population in terms of household income.

In one scenario, respondents were told they had £50 and could choose to share as much or as little as they want with an unknown partner. Only 69% of marketers would share the money equally, compared to 77% of the mainstream.

Advertising and marketing people are also more politically motivated when deciding how much to share. When Remain voters in the industry were told their partner is a Leave voter, willingness to share dropped to 43%.

Source: Reach Solutions

Half of US consumers buying director-to-consumer brands

Almost half (48%) of US consumers are opting to buy from direct-to-consumer brands, but the audience tends to be younger and have higher household income than for the average brand.

Among D2C shoppers, 84% are under 54 years old (compared to 72% of the overall population), while 31% have a household income in excess of $75,000 (£60,000)(compared to 25% of the overall population).

They are also more likely to use their favourite brands as vehicles for self-promotion, with 53% agreeing with the statement that “when I purchase a new brand I am expressing who I am”, compared to 28% among incumbent brand shoppers.

D2C shoppers are 36% more likely to research a brand pre-purchase, with 33% saying they would go to a store (compared to 18% of incumbent shoppers), 35% saying they turn to influencers (compared to 15%), and 44% saying they check social media posts or YouTube videos posted by customers (compared to 24% and 28% respectively).

And 71% of disruptor brand consumers say they usually share information on companies or brands online, compared to 31% of incumbent shoppers.

Source: IAB

High streets and shopping centres suffer in June

The high street has been the worst hit by the relatively poor summer weather, with a drop in footfall leading to a fall in sales figures for the month of June.

Footfall declined by 2.9% in June, compared to a 0.9% drop in the same month last year. For the three months to 29 June, footfall declined by 2.4%, well above the six- and 12–month averages of 1.3% and 1.7% respectively.

High street footfall plunged by 4.5%, following a 0.1% rise in June last year, while retail park footfall climbed by 0.1%, compared to growth of 0.4% year on year.

Shopping centre footfall was the only metric to see an improvement. While it was down by 2.4%, this was better than the 3.4% drop in June last year.

Source: British Retail Consortium

Marketers ‘ignoring’ the value of referrals and word of mouth

Less than a quarter (23%) of organisations currently have referral programmes in place for customer acquisition despite 41% of marketers believing word-of-mouth recommendations are one of the best ways to build trust.

Some 37% of consumers discover new products and services via recommendations from family and friends, but only 21% of marketers think this aspect is important to consumers.

Another 20% of marketers believe reviews add a level of trust to purchasing, but only 12% of consumers agree. And 9% of marketers cite influencers as adding trust compared to just 3% of consumers.

Source: Data & Marketing Association

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Being a ‘me-too’ brand is more desirable than it sounds

peas in a pod

If brands had feelings, the unkindest epithet you could deploy about any one of them would be ‘me too’. That would hurt – like commenting on your fashion-conscious friend’s ‘sensible shoes’.

Brands, as any sentient member of the species would guardedly attest, are supposed to be differentiated, disruptive, revolutionary: always actively shaking things up. In that context the snippet ‘me-too brand’, heard from a member of the marketer or agency team, would come over less like a description than a diagnosis.

That’s not how it looks from the consumer’s point of view, though. The ‘levelling up’ of brands within a category is a sign of competition at work. If brand A makes a meaningful improvement, brands B and C have little option but to follow suit. With the three once more on a par, the only way for any one to steal the consumer’s affections is to innovate again – ensuring the continuous improvement that marketplace competition brings.

So brands B and C should not be dissed. They are performing a societal good, just in the uncelebrated process of edging to me-too status. If they declined, then brand A would run away with the market. The consumer would get what the consumer always gets in a monopoly: shafted.

Still, ‘How can we best play our role as a good-citizen me-too brand?’ will not set the pulse racing as the theme of that next innovation away-day. Not nearly exciting or challenging or disrupting enough. Or selfish enough, come to that: you’re looking for advantage here, not the crumbs of commercial catch-up.

Terms can be deceptive, though, and ‘me too’ is one of them. I promise you, there are exercises you can do at that workshop that will be revelatory, with those two little words at their core. Here are three to think about. In each case, the trick is to look at ‘me too’ through an unexpected lens.

The new rules of innovation

Me two

This isn’t about bringing any new features to the category. It’s about inventing a new combination. You start by itemising two important category virtues that are never seen within the same brand. Often, low price will be one of them – the trade-off that precludes some other quality that consumers would love but can’t afford.

The team then has to devise a way that its brand, uniquely, will offer both. What makes this task interesting is that it is basically impossible; if it weren’t, someone would have already worked out how to do it.

But ‘impossible’ turns out to be a relative term. With ingenuity and determination, the fusion can sometimes be achieved. The classic case is Accor Hotels, which looked at the ‘impossible’ combination that consumers craved at the budget end of the French hotel market: a good night’s sleep at a very low price.

At that time the choice was between cheap but noisy and uncomfortable – with thin walls and poor bedding part of the trade-off – or a better night for a higher price. With its Formule1 concept, Accor offered big, beautiful beds and proper soundproofing for the lowest-tier room rates.

How did it achieve it? By sacrificing things customers liked but valued less: reception staff, breakfast facilities, even cupboards – there was just a pole in the corner for hanging clothes.

Any team interested in ‘me-two’ innovation could do worse than look at the ‘value curve’ tool that is a key component of this case (see ‘Three ways to do me-too’ innovation’ below for more).

Me too, but moved

This starts by looking outside the sector – at business models, pricing structures, service approaches or technologies that are applied in other contexts, but not yours. The next step is to probe how it might feel if any one or more of them were transferred to your category and brand. The unlikelier the migration seems, the more interesting the possibilities get.

Those digitally native vertical brands (DNVBs) – also known as direct-to-consumer brands – that seem to be fizzing up everywhere are an example.

The hype makes them feel like a disruptive business breakthrough. The reality is that every one of them – from Harry’s to Glossier – is a replica of a business model that was around a century back: the lemonade stand.

Think about all the ones you’ve seen in cartoons – a couple of kids, a makeshift stand, a big jug, a heap of lemons and a hand-scrawled sign. The essential features of the model are single-product focus and indivisibility of production, retail and service elements.

DNVBs are basically lemonade stands shifted to the digital domain. Eve is just mattresses. Away is just luggage. Ohne is just tampons. Product offers don’t get much more focused than that. And the close integration of retail service, production and product offer is what Bonobos founder Andy Dunn, who coined the term DNVB, claims is the secret of the sector’s characteristic ‘consumer intimacy’.

Not that you have to reach up to the level of business model to pull off ‘me-too, but moved’ innovation: even something as routine as a delivery mechanism could unlock advantage. I am always struck by how Hexoral’s super-long spray nozzle – which would not look out of place in a garage but is novel in a healthcare pack – brings distinction and ‘smart-thinking’ credentials to this sore-throat brand.

Me too, but better

This is the approach championed by Professor Patrick Barwise and Sean Meehan in their book Simply Better. Differentiation, they argue, is overrated, compared with the discipline of raising standards across the accepted category dimensions.

So the team imagines that its brand will conform to the norms and must-haves of the sector, but, for each one, will determine a credible plan to outperform: faster, friendlier, more accurate, more responsive.

First Direct is an example. Since it pioneered non-branch banking in the 1990s, numerous competitors have joined the fray. The brand routinely sees them off by doing the same things better – with the highest NPS scores in the sector and more awards for service than any other bank.

It doesn’t sound as sexy, though, does it? And maybe that’s the problem with the racking up of the semantic register when our industry puts innovation on the agenda. If brands had feelings, you couldn’t blame some of them for feeling inadequate around all the ‘groundbreaking’, ‘audacious’ hype.

And that counts double at these innovation workshops. Have you ever attended one where the guru at the front didn’t bang on about ‘the next big thing’? Or where ‘breakthrough’ and ‘disruptive’ weren’t bandied about in a definition-free orgy of superlatives? Or where continuous, incremental improvement wasn’t seen as somehow meek and defeatist?

No, me neither.

Three ways to do ‘me-too’ innovation

1. Me two

Approach: Find a novel combination of two category benefits and focus your brand obsessively on them.

Example: The Nintendo Wii had no hard disk, no DVD player, poor connectivity and low processing speed, but it over-delivered on two features: its motion controller and surprisingly low price.

How to do it: Use the ‘value curve’, devised by Insead professors Renée Mauborgne and W Chan Kim: a simple tool for mapping out a brand and its competitors against the defining features of a category. Opportunities to raise certain features, and lower others, can then be identified.

2. Me too, but moved

Approach: Take a successful technique or feature from outside your category and bring it in.

Example: The Guardian recently returned to profitability after moving away from the category’s conventional paywall subscription model and instead asking people to make donations, in an approach borrowed from political groups and charities.

How to do it: Use a brainstorming exercise called ‘What would Elon Musk do?’. Identify a list of distinctive brands, figures or institutions — Elon Musk, Greenpeace, Dyson — and think through what techniques or features they might bring to the category.

3. Me too, but better

Approach: Follow the conventional category dimensions but raise the bar for them.

Example: JetBlue didn’t pioneer the low-cost airline model. But the latecomer managed to win significant market share by having friendlier staff, newer planes and a smoother booking process.

How to do it: Follow the six rules outlined by Professor Patrick Barwise and Sean Meehan in their book ‘Simply Better: Winning and Keeping Customers by Delivering What Matters Most.’

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