The digital ad industry has had a difficult start to the year following a wider brand safety scandal and concerns around fake news, viewability, verification, transparency and measurement. However, that has not stopped advertisers upping their spend on the two main players.
While WPP says it’s seen a “marked pause” in advertising on YouTube over the first half of the year, it is still “pureplay internet” that is providing nearly all the growth in the UK market. While the TV ad market is holding its market share, other traditional channels are losing out. And boss Sir Martin Sorrell said WPP will continue to up media investment in Google and Facebook.
“There is increasing scrutiny from clients around the effectiveness of digital,” he said, speaking on a call this morning (23 August) following WPP’s half-year results. “But YouTube’s travails over brand safety, fake news, value, viewability, verification, transparency and the Google and Facebook measurement questions, these issues have not stopped or pegged growth of Google and Facebook in our media investment.
“Despite the uncertainties, this hasn’t checked the growth or importance of the duopoly in digital media.”
Google remains WPP’s biggest single media investment, with Sorrell saying he expects the company to spend more than $6bn on the platform this year. And he predicts Facebook will move up from third to second position, with WPP’s spend rising to more than $2bn.
Despite the uncertainties, this hasn’t checked the growth or importance of the duopoly in digital media.
Sir Martin Sorrell, WPP
Sorrell also once again brought up the spectre of Amazon, which is having an impact on most clients’ businesses and therefore on WPP. Amazon is also going up against Snapchat and Oath in an attempt to be the “third force” in the digital ad space.
Sorrell estimates Amazon’s ad revenues are around $2.5bn annually, making it a …read more
There can be little doubt that Mumsnet is a marketing and media phenomenon. Founded only 17 years ago, the site now attracts in excess of 10 million users a year and continues to maintain a double-digit annual growth rate. Aside from its sheer scale, the Mumsnet audience is also a tasty prospect for marketers because of its demographic and behavioural uniformity.
In an age of fragmented media and markets that fail to follow the traditional demographic stereotypes, Mumsnet is that rarest of things – a site that is predominantly occupied by a single specific type of consumer: mums. While a small proportion of the visitors to the site are male, the rest of its user base is the marketing equivalent of gold dust.
Almost 80% of its users are women, mostly mothers, aged between 26 and 45. These are the target consumers often too busy to consume other media as they juggle jobs, family commitments and children. Yet this is the audience that Mumsnet has built its business around. These women use the site to share experiences, provide advice and generally behave like an old-fashioned online community.
But there is a growing problem with this community. Browse the site for barely a minute and its becomes readily apparent: the first F-bomb is usually only three or four clicks in. And the bombs keep dropping. And dropping with such frequency and vehemence that Mumsnet begins to take on an almost Tarantino-like vibe. Posts like ‘Is this totally fucked?’ and ‘Can we talk about spunk’ are commonplace.
Most users appear comfortable dropping Anglo Saxon epithets into seemingly every possible conversation. An apparently harmless debate about married life detours into: “Fuck off you stupid prick of a husband, who …read more
The option of directing spend towards traditional media is rising back up the agenda of marketers. Data suggests advertising in these channels retains high levels of consumer trust, which seems increasingly attractive to marketers in a world of fake news and intrusive online ads, not to mention frequent malware and cyber attacks.
For example, a recent survey from the CMO Council revealed that almost two-thirds (63%) of consumers would respond more positively to a social media ad if it appeared on a more traditional advertising channel. So how are brands responding to consumers’ faltering confidence in the deluge of digital media?
Max Langford, commercial director at SES Business Water, a water supply company serving more than 285,000 homes and businesses in the South East of England, believes there is a trust issue. “I know of cases where astute consumers have been duped by digital advertising and have unfortunately found that it’s not always what it seems,” he says. “Something that arrives through the post that you can touch and feel can seem more believable.”
It is a view supported by Royal Mail MarketReach’s research in May, which revealed that while 87% of people consider printed mail believable, only 48% say the same for email. It is a distrust fed, in part, by email saturation.
Co-op director of brand Helen Carroll says the group consults its members on its use of digital and traditional media, an approach that reflects changing times. “This consultation with our members has quite rightly impacted on our advertising strategy.”
She says the group’s media mix varies dramatically across its different businesses depending on route to market, target audience and objectives, but that traditional media have a key role to play.
“We are a brand with an emotive and deep story to tell and therefore trying …read more
The technology and processes involved in this effort are now evident across every department of a typical business. Digital isn’t just disrupting business models but the process of work, too.
The race is to avoid being left behind as new and nimble competitors begin life with simpler and more powerful tech architecture, in a trend that fits the classic ‘S curves’ scenario, as shown below.
In order to stay ahead of (or at least on) these curves, businesses need to properly understand new digital technology. Worryingly, an Econsultancy survey from late 2015 showed that although 71% of respondents thought it was important for leaders to be technically literate, when asked whether their leader was, 41% said ‘quite’ and 29% said ‘not very’.
HR is in the thick of it
HR is right in the middle of all these changes – changes to the concept of leadership, working processes, employee skills, the application of data, interdepartmental collaboration and tech infrastructure.
In Econsultancy’s best practice guide, ‘The Future of HR in the Digital Age’, and at its annual Digital Transformation conference, consultant Neil Perkin has highlighted some of the changes necessary within HR departments. The first is the growing role of data.
HR departments are no longer the preserve of paperwork and face-to-face meetings. Analytics has its part to play.
Laszlo Bock, former senior vice-president of people operations at Google, has written about the company’s ‘three thirds’ hiring model. That means an HR department that breaks down as one third from HR backgrounds, …read more
Magazine brands are having a tough time. Sales are falling, and you only have to look at the latest ABC figures to see how fast.
Women’s weeklies are particularly struggling. The circulation of Time Inc’s Look was down 35.4% in the first half of 2017, with sales for Woman magazine down 17.6%. Men’s titles, TV listings and home interest publications also saw sharp declines. News and current affairs titles fared a lot better, in part due to the tumultuous news agenda – thanks Donald Trump.
Simultaneously, advertisers seem to be moving away from the medium. Total ad spend was £877m in 2016, a decline of 6.8% compared to 2015 according to AA/Warc figures. It forecasts that ad spend will drop by a further 8.2% in 2017.
Douglas McCabe, media analyst at Enders, believes this shift is due to a sentiment change among advertisers across all sectors, who prefer “shinier” digital platforms. Digital ad spend grew 13.4% in 2016 to £10.3bn.
“In digital, magazines have no particular advantage like they have in print. This is also a manifestation of a very broad shift to more short-termist marketing. The point of a lot of magazine advertising is that it’s highly visual, brand marketing, whereas what’s replacing that spend is direct response advertising online,” he says.
Despite these figures, magazines still play an important role in many brands’ media mix, and advertisers and publishers are finding new ways of working together. The days of advertorials are long gone, and instead of simply placing their creative in the right titles, many brands are eager to form integrated editorial partnerships instead.
“Brands’ starting point has changed and is now all about partnerships. They are much more integrated and are better amplified than with a purely advertorial partnership,” says Sue Todd, CEO at magazine trade body Magnetic.
The rise of the partnership
Last …read more
“We’re pretty straight talking as an organisation,” says Sally Abbott, reflecting on the character of the Weetabix UK and Ireland business, five days into her role as managing director.
“We’re empowered to make decisions and we’ve got a pretty flat structure, so you genuinely get the opportunity to make things happen quickly and that’s not always the case when you’ve got those global organisations with chains of command to work your way through.”
Abbott made the move to managing director in July, nine years since joining Weetabix as marketing director following a 14-year career at Kraft Foods. Her promotion marked the latest development in a period of change for the British cereal giant.
This change started in April with the £1.4bn acquisition of Weetabix by Post Holdings, the North American leader in cereal, protein shakes and granola. The new parent company has already committed to invest £10m in TV advertising to help keep Weetabix top of mind with consumers in this its 85th anniversary year.
Post-acquisition everything is very much business as usual at Weetabix, Abbott insists. “Post Holdings have bought us because of how we operate and the results we deliver, so they have no intention of changing that.
“We will carry on being a great place to work and driving for category growth in the way we’ve been driving. We’re definitely being invited to operate independently. We’re not being integrated into the Post Holdings consumer brands business in the US,” she adds.
Finalising the Post Holdings deal is one of the highlights of Abbott’s career, who describes the acquisition as a great reflection of the strength of the Weetabix business and how attractive its brands are to investors.
My job [as MD] is to continue to make Weetabix a great place to …read more
Facebook is losing out in popularity to “more visual” competitors such as Instagram and Snapchat, a new study claims.
Although Facebook will remain by far the most popular social network in the UK in 2017, boasting an estimated 32.5 million monthly active users, it is still losing share.
Among those aged 12 to 17 and 18 to 24, Facebook’s user growth will fall by 2.8% and 3.1% respectively in 2017, according to eMarketer’s latest forecast of the UK’s social network users. In comparison, Snapchat will grow users among the important 18 to 24 year group by 19.2% – a sign it is making gains.
In total, 16.7 million people in the UK will use Instagram a month this year, an increase of 34.8% over 2016. Snapchat won’t be far behind, with 21.1% of the population—or 14 million people—logging on at least once per month; representing an increase of 20.2% year on year.
However, eMarketer has lowered its longer-term growth prospects for Snapchat, which indicates Instagram’s attempts to woo younger users with features (such as Instagram Stories) similar to those of Snapchat are proving successful.
“We see teens and tweens migrating to Snapchat and Instagram. Both platforms have found success with this demographic since they are more aligned with how they communicate—that is, using visual content. Outside of those who have already left, teens and tweens remaining on Facebook seem to be less engaged, logging in less frequently and spending less time on the platform,” says eMarketer senior forecasting analyst Oscar Orozco.
“At the same time, we now have ‘Facebook-nevers’—children aging into the tween demographic who appear to be overlooking Facebook altogether, yet still engaging with Facebook-owned Instagram.”
Twitter is not performing as robustly as its three main competitors. Its user growth has …read more
The UK’s love for the discounters shows no signs of fading, with Lidl now the nation’s seventh biggest supermarket.
Lidl reached a new market share high of 5.2% as sales rose an impressive 18.9% in the 12 weeks to 13 August, according to the latest data from Kantar Worldpanel. This means Lidl finally leapfrogged Waitrose; something larger rival Aldi achieved back in 2015.
It was also good news for Aldi. Over the same period, its sales rose 17.2%, giving it a 7% market share. According to Fraser McKevitt, head of consumer insight at Kantar Worldpanel, we’re now a nation of fully-adjusted discounter shoppers.
“Ten million households visited Lidl’s ever-expanding network of stores during the past 12 weeks, with alcohol and fresh produce performing particularly well as the retailer increased sales by 18.9% overall,” he explains.
“Lidl is growing sales 40% faster with families than with households without children. Families tend to buy more items each time they shop, so strong growth with this demographic has helped Lidl to increase its average basket size year on year.”
But despite this rapid growth for the German discounters, sales at the big four supermarkets are holding out. Tesco, Sainsbury’s Asda and Morrisons all increased sales for the fifth period in a row, marking the big four’s best performance since 2013.
However, this wasn’t enough to prevent each from losing market share to Aldi and Lidl. And McKevitt says even though the likes of Morrisons, Tesco and Asda have each reversed falling sales over recent months, they can still expect to lose market share.
“This welcome period of sustained growth hasn’t been enough to entirely offset pressure from the discounters,” he adds. “The big four now account for just 69.3% of the UK grocery market – down …read more
Stephen Fry is to share his thoughts on digital disruption and technology-fuelled innovation after being confirmed for the opening headline slot at this year’s Festival of Marketing.
The actor, author and director will be interviewed on his love for emerging technology and how it has and will alter our lives. He will also speak about his advocacy for mental health charity Mind. Fry will take to the stage at 9.15 on 4 October.
He joins headliners Jo Malone, who will close the first day and will talk about entrepreneurship and the challenge of launching two fragrance brands. Professors Mark Ritson and Byron Sharp will go head-to-head at the start of day 2 (5 October) to debate the impact of Sharp’s best-selling book ‘How Brands Grow’.
The Festival takes place at Tobacco Dock in London. Featuring more than 200 speakers across 12 stages, it’s the biggest marketing event in the UK.
In addition to the confirmed headliners, highlights include Tom Fishburne, AKA The Marketoonist, who will be offering his view on the state of marketing from 15 years observing the good, bad and ugly in marketing.
Elsewhere, Ros King from Lloyd’s Banking Group will be on a panel discussing why marketers should be paying more attention to consumers with disabilities, while John Lewis’s recently appointed marketing director Becky Brock will be offering her views on loyalty, innovation and risk-taking.
Tickets for Festival of Marketing are available now. For more information on the agenda and details on how to book visit www.festivalofmarketing.com