Why emotional reactions are a better indicator of behaviour

As traditional methods of market research go into decline, what are the strengths and weaknesses of newer techniques that track real-time emotional responses and get behind the psychology of the consumer decision-making process?

The value of the data analytics market has grown by more than 350% over the past four years and has been a major contributor to the size and effectiveness of the UK research sector, according to a recent study commissioned by the Market Research Society and carried out by PwC.

The importance of qualitative research has also risen dramatically, as the report states that brands are increasingly looking to clarify the ‘why’ behind raw data and numbers.

The growth of these markets, along with new technologies such as neuroscience and behavioural economics, has come at the cost of the more traditional research methods, the report suggests, with the use of traditional surveys and particularly telephone surveys “declining at a rapid rate”.

But what do these emerging technologies, which track consumers’ emotions and reveal their involuntary reactions, offer brands and what challenges come with the benefits?

“The drive for understanding [motivations of behaviour] has been critical to the growth of qualitative research in the past two to three years,” says Jane Frost, CEO at the Market Research Society (MRS)

She explains that for a long time “research has recognised emotion as a key driver of behaviours”, but that the challenge has always been from the side of marketing that “quite rightly” needs the numbers. Frost adds: “Numbers need context and they only tell you what people do and not why they are doing it.”

“Numbers need context and they only tell you what people do and not why they are doing it.”

Jane Frost, CEO, MRS

Understanding what brand creative works was a contributing factor in Apple acquiring facial recognition company Emotient earlier this year, as the technology allows brands to measure at scale how emotionally engaged customers are with ads and develop marketing accordingly.

READ MORE: How emotion tracking can help brands create marketing that resonates

Fuelling growth

Chilled ready meals brand Rustlers, owned by Kepak Convenience Foods, sells more than four packs per second in the UK but enlisted the help of research startup TransgressiveX – one of Marketing Week’s 100 Disruptive Brands – to fuel its growth strategy.

Rustlers used TransgressiveX’s research survey, which measures the effect of a brand at each point in the purchase process, scientifically based on psychological responses of consumers, to reveal new marketing potential in the early stages of the consumer journey. The survey employs ‘System 1’ data – looking at automatic, fast and often unconscious responses – alongside algorithms to uncover competitive advantage.

According to Adrian Lawlor, marketing and business development director at Kepak Convenience Foods, an initial brand health survey allowed the company to identify a perception problem among new customers in the early stage of the customer journey.

“The clarity of the insight that comes from that is the defining factor that has helped us get under the skin of our brand,” he says. “When we look at the early stages of the journey, there are issues of perceived product performance – but now we can look at the kind of messaging we need to create to convert those that haven’t come into the brand.”

Rustlers has since used the research method to develop new advertising, packaging and spur product development, resulting in a new TV campaign, which is due to air in November followed by new packaging and products in spring 2017. “The model again is quite efficient and we have been using [these techniques] to test and optimise creative development on each of [these areas],” adds Lawlor.

“[Brand equity is a concept that exists] in a very complex environment, shareholder integrity, supply chain transparency and social media interactions, and above the line advertising and pricing,” says CEO of TransgressiveX and consumer psychologist Nadim Sadek, a former global CEO of Millward Brown’s qualitative network. “All of these add up to an exchange with consumers; a brand has to manage all that and it’s incredibly hard to get your head around.”

He adds: “Insight and research serves no purpose other than to help marketing be better.”

Lawlor agrees and says: “Presenting what is complex stuff in a clear way is important for getting the wider business engaged with it.”

Measuring brain responses

Channel 4 Superhumans
Scenes of competition delivered strong emotional intensity for Channel 4’s ‘Superhumans’ campaign

Emotion tracking can also be used for post-analysis research, which is what a study by Neuro-Insight looking at Paralympics ads from Paralympics GB, Channel 4 and Samsung aimed to do.

The study analysed second-by-second electrical responses of the brain to understand how viewers responded to ads. Key measures included: how engaged a person was by an ad, or how personally relevant it was to them; what aspects of the ad were being stored into their long-term memory; and the extent to which they were emotionally energised by an ad.

The results show that in Channel 4’s ‘Superhumans’ campaign, the mix of athletes competing, interspersed with footage of disabled musicians and people doing daily things in their own way, made the ad relatable.

In Samsung’s ‘School of Rio’, there was a stronger engagement with scenes of the athletes either taking part in sporting activity or exchanging jokes with comedian and brand ambassador Jack Whitehall, than there was with scenes where they give factual information.

In ‘Supercharge’ from Paralympics GB, scenes of competition delivered a strong emotional intensity throughout, which was bolstered by the sound of cheering from the crowd during the ad.

The key driver of a positive response in all three ads comes when there is a clear indication that Paralympic athletes are in a position of strength.

Analysing adverts after they air is, in this example, key to understanding how to portray disability and diversity in a way that drives a positive, or desired, emotional response.

Trust in data use

Concern over the use of data by companies is already an issue for brands looking to analyse that data to improve marketing and it can be argued that gathering emotional data would create a bigger concern.

“There is an issue of transparency and trust,” says Frost. “We already know that consumers are much less trusting than they used to be and data is increasingly an area that worries them – [emotion tracking] would go further than written data in concern.

“Emotional stimulation and behaviour change has to be one of those things where any ethical marketer or researcher needs to be very careful,” she warns. These concerns are centred on applications that could manipulate emotion. The worry is over how companies can ensure they are not making an angry person angrier or a depressed person even more depressed.

Frost would like the “greatest range of possibility available to market researchers and marketers” but also wants to be clear that if marketers do it well from the outset, they will get permission to go on doing it. “If you don’t take a considered approach, then someone will come and ban [it],” she warns.

Why emotion is linked to brand loyalty

Brand loyalty is the holy grail for many companies but instead of looking at the numbers, such as traffic driven by an email or social media post or the number of people redeeming a voucher, loyalty can be linked to simply asking how a customer feels.

Organisations need to understand the intuitions that drive customers’ behaviour at an emotional, subconscious and psychological level, according to Colin Shaw, co-author of ‘The Intuitive Customer: 7 imperatives for moving your customer experience to the next level’.

“Customers are human beings and therefore understanding how a human being works is important from a brand perspective, where most organisations tend to focus on the rational side of an experience,” says Shaw.

He adds: “Clearly, humans are more complicated and we know that over 50% of experience is based on how a customer feels. It’s surprising how many brands don’t do research on how customers feel about them. That’s not just feeling good or bad but [as a consumer] am I feeling trust, am I feeling cared for and valued?”

Shaw believes the biggest and “most profound area” of work in this sector is by Professor Daniel Kahneman, who won a Nobel prize for behavioural economics, and says loyalty is a function of memory. So if consumers did not remember, they would not be able to be loyal because every experience of a brand would be new.

“Understanding how [loyalty] is formed becomes critical in designing experience. Kahneman argues that what people remember in an experience is the peak emotion they felt and the end emotion and those form a memory.”

Understanding how memories are formed when customers have contact with a brand is therefore key. Shaw advises brands to track the peak emotion and the end emotion “because people don’t choose between experience, they choose between the memory of an experience”. Therefore knowing what emotions get a response can build on perception and loyalty.

Consumers’ emotional reactions to brands, advertising and experiences may sound like an esoteric topic, but tracking these could ultimately be a more reliable method for understanding the motivators of behaviour than asking people to explain them.

Sponsored viewpoint

Gawain Morrison, CEO and co-founder of emotional marketing and tech consultancy, Sensum

Brands and agencies have instinctively known for some time that if you can appeal to a person’s emotions, you have a better chance of not only being able to sell a product or create great experiences, but also shaping brand loyalty. But now science is helping to prove and make more of this.

Instead of relying exclusively on traditional market research methods based on conscious questioning and surveys, which only provide a singular point of view, new research tools that weave in biometric responses allow us to build a 360-degree real-time view of the consumer’s emotional journey.

By using wearable devices we can measure evidence streams from sensors recording the way stimuli affect our non-conscious physiological reactions, such as pupil dilation, eye-tracking, facial expressions, skin-sweat and heart rate levels, all of which are indicators of an emotional response.

There is a much richer palette and deeper insight to be gleaned from this data, giving those using it a better understanding of what drives people to make decisions in context and therefore a deeper storytelling capability. And as any psychologist or neuroscientist will tell you, context is the key to gauging emotions accurately.

As with all research, there’s no one-size-fits all approach. There are circumstances where facial coding tools or heart rate and skin conduction aren’t going to be useful but in other ways they will. Success comes down to good experimental design and considering the use of these insights throughout the creative process, rather than as a tick-box exercise at the end. When used correctly, emotional research can actually aid and focus the creative process.

This year has marked a step-change in how this way of working is viewed. We’re starting to see more forward-thinking brands and agencies embrace it within their everyday methods. Some are using it to identify “white space” on which to build campaigns, while others are using it to pinpoint finer details – like whether an image provokes a more positive response on the left- or right-hand side of the page.

However, there’s still a lot of education that needs to happen before the entire industry feels comfortable with this. But given we’re in a commercial world where the ability to build a truly personalised relationship with consumers is the marker of survival, time isn’t on anyone’s side.

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Malibu wants to banish British queuing tradition with internet-connected cup

Malibu is using the Internet of Things to “alleviate customer experiences” in bars and clubs by banishing queues and delivering customers’ drinks directly to them.

The ‘Coco-nect’ cups send signals to bar staff every time a fresh drink is required. To place their order, customers need to twist the base of the coconut-shaped cup. They can then carry on talking, drinking or dancing while their drink is prepared and delivered straight to them.

Twisting the cup’s base sends an order to the bar at the same time as pinpointing the user’s location. Once the order has been accepted a light on the bottom of the vessel changes colour to let the partygoer know their drink will soon be delivered to them, while a special app helps bar staff find the customer. Once near, the vessel light starts flashing to identify the right recipient.

Making use of existing WiFi and RFID technology, Malibu claims the cup is a drinks industry first. The brand is looking to roll out the technology next summer at a small event, before potentially it rolling out “on a mass scale” at certain festivals and events.

The cup was developed in just 12 weeks by the Malibu brand team at The Absolut Company, working with internet-of-things agency SharpEnd.

Deborah Nuñez, global brand manager at The Absolut Company, told Marketing Week that the Internet of Things is playing an increasingly important role in consumers’ lives, and that brands can be present in this space.

She explained: “[The technology] is something we need to start playing with in the right way, with the consumer benefit at its core. It’s still in the early stages, and some of our innovations will resonate more than others.”

“It’s exciting, and we can be at leading edge of these technologies as that’s where our consumers are.”

Deborah Nuñez, global brand manager at The Absolut Company

Rooting innovation in customer needs

This is not the first time Malibu has tested the Internet of Things. In August this year the alcohol brand used the technology to turn its bottles into “digital touchpoints”.

READ MORE: Malibu brings the Internet of Things to FMCG as it turns bottles into digital touchpoints

The brand implemented the same technology used for contactless payments to create 40,000 ‘connected’ bottles, allowing users with Android phones and the latest iPhone 6/6s to access exclusive content, including prize draws, drinks recipes and playlists, as well as a bar locator.

Nunez said the connected bottle trial is ongoing, but that initial results show that customers are “really receptive” to the technology. She also admitted, however, that consumers aren’t fully accustomed to the behaviour that sits alongside its connected bottles.

“It’s an interaction that isn’t natural yet; it’s not part of natural behaviour of how people explore our products, but there’s definitely big potential,” she explained.

“We need to make sure that any innovation is rooted in consumer need and has to be focused around the consumer experience. Once you have that, you can quite confidently introduce new norms to consumer and see how it goes.”

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A third of brands expect to be hiring marketers over the next 3 months

Marketers are feeling confident about employment opportunities despite concerns over economic growth following the vote to leave the European Union.

For the first time this quarter, the IPA’s Bellwether Report asked respondents how they feel about employment in the industry. And in responses shared only with Marketing Week it found that almost a third (29.5%) of marketers expect overall employment to be higher in three months’ time compared to now.

This was more than double the percentage that predicted a fall (13%), and means a net balance score of +16.4%. Some 57.5% expect employment to stay the same.

While this is the first time this question has been posed to marketers as part of the report, the results show business are planning to invest in staff despite the uncertain economic and political climate. Paul Smith, senior economist at IHS Markit, which compiles the report for the IPA, says many brands are looking to take advantage of new opportunities and markets thrown up by Brexit.

“While the surprising vote result has to a degree undermined financial prospects both at the company and industry levels, the immediate economic impact has perhaps not been as severe as some envisaged in the immediate aftermath of the vote,” he explains. “Indeed, companies are seeing both threats and opportunities following the Brexit vote.”

“There is a sense among some companies of a return to ‘business-as-usual’, with Brexit also offering new markets and opportunities to seek out.”

Paul Smith, senior economist, IHS Markit

In fact, Smith suggests that the bigger challenge for marketers may not be in convincing bosses to let them hire but in recruiting and retaining high calibre staff. And this could be exacerbated if the UK chooses to pursue a ‘hard’ Brexit, as Prime Minister Theresa May seemed to suggest was on the agenda at the recent Conservative Party Conference.

“This could significantly reduce the ability of businesses to recruit from the EU labour pool,” says Smith.

And Paul Troy, CMO at Confused.com, thinks the positive outlook is unlikely to last through next year. He suggests there could be employment freezes next year, particularly over the summer as consumers increasingly concerned at what Brexit means for them put a halt to big purchases.

“If you look at the numbers on Brexit, 48% didn’t think it was a good idea and a lot of those people were in London and the South East, where people tend to be well off. If they stop spending, and I think they will, it will be tough,” he says.

Elsewhere, the Bellwether Report told a similarly optimistic story of Q3, with the proportion of marketers upping their marketing spend at the highest level for more than two years. Some 26.2% of panellists recorded growth in budgets, compared to 12.9% that registered a fall, meaning a net balance of +13.4%.

Read more: Brexit set to be a rollercoaster for marketing budgets and jobs

“Efforts to alleviate competitive pressures, and in some instances a desire to respond positively to the EU referendum result to maintain brand exposure both in domestic and international markets, meant that overall budgets were raised to the greatest degree recorded by the survey since the second quarter of 2014,” says Smith.

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Morrisons: ‘Customer cynicism will drive advertising standards’

Morrisons chairman Andrew Higginson says that customers’ cynicism towards brands will ultimately drive advertising standards.

Speaking at the IAB’s Engage conference today (12 October), Higginson said he has learnt over the years that customers are “the smartest people on the planet”.

As consumers have more knowledge and “power through choice than ever before”, he believes they will reward businesses that are efficient, responsible and trusted.

“It’s customers, their cynicism and choices, that will drive your standards in advertising. You’ll either embrace that fact or it will smother or suffocate you,” he said.
 “As an industry, you still have a massive role to play in helping customers find and understand the power of those brands.”

“You need to bring facts to the table and not just opinions, and ultimately customers will decide whether your advertising is working or not.”

Andrew Higginson, chairman, Morrisons

Higginson has a long history of working at consumer-facing brands. He was previously the chairman of Poundland, senior independent director of BSkyB and an executive director at Tesco for 15 years. He joined Morrisons as deputy chairman and chairman elect in October 2014 and became chairman in January 2015.

He added that when he first went into grocery when he started working for Tesco in the 90’s, customers generally were poorly informed on price, choice and different ranges and that it was “a comfortable world for business to operate in”. Higginson admits, however, that “customer choice” kept the grocer on its toes.

“What kept us improving was the knowledge that customers chose to shop with us. We had no given right [to their custom]. We even said to the Competition Commission at the time that if customers don’t like it, they’d go five minutes down the road and find somewhere else.

“And we were right – they did. Given choice, the customer is the best regulator. They chose to go to other retailers like Poundland. It put a prick in the bubble of arrogance of supermarkets from 2010 onwards.”

READ MORE: Morrisons’ sales recovery piles more pressure on the discounters

Yesterday (11 October) it was revealed that Morrisons has overtaken Sainsbury’s to become the second-biggest listed supermarkets group by market value. In September Morrisons also reported that its half-year profits increased for the first time in four years.

At the time, however, the brand’s CEO David Potts said that recovery is “still in the foothills”.

He said: “We have returned the business to core customers and sped up the business. We are pleased with progress so far and there is a lot more we can do and will do for customers and colleagues, but so far so good.”

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Jo Malone on ending ‘lazy’ shopkeeping and refreshing the retail experience

Stepping into the Jo Loves store on Elizabeth Street in London’s Belgravia is like walking into a high-end cocktail bar. Behind the silver fragrance ‘brasserie’ bar the shop assistant warms bath cologne in a small tagine, releasing a cloud of scented steam. Next she pours cleanser over ice and strains it into a martini glass, before gently painting a light foam of body lotion onto the customer’s skin. This is fragrance tapas, the latest innovation from entrepreneur Jo Malone.

“I didn’t set out to be different: it makes your creativity slightly fake if you do,” says Malone, sitting in the studio at the rear of the store where customers create bespoke candles.

“I love things that have that quirkiness, that storytelling element to it. The tapas experience is a bit like when you have your first kiss. Everyone remembers their first kiss and so for our brand that’s our first kiss. People look at the product with fresh eyes, which is what every brand in the world is trying to do.”

A restless, creative mind, Malone describes herself as always looking for the next innovation to delight the consumer. That was the idea behind the launch of her second fragrance business Jo Loves in 2011, a concept she ensured was distinct from the eponymous brand she established 25 years ago, which made her a worldwide name.

The Jo Malone brand launched in 1991, followed in 1994 by the opening of her first store in what would prove to be a fragrance empire with the commercial allure to attract beauty industry heavyweight Estée Lauder, which bought the business in 1999.

READ MORE: Jo Malone – ‘Great brands make consumers the creative heartbeat’

Malone stayed on as creative director until 2006, during which time she was diagnosed with breast cancer and took a year out to have chemotherapy. In her newly-launched autobiography ‘Jo Malone: My Story’, she describes how she returned to the business and realised she could no longer “feel her character” there.

The decision to step away from the Jo Malone business in 2006 was a difficult one. The Estée Lauder deal stipulated that Malone take a five-year hiatus from the beauty industry, during which time she was not even allowed to purchase items from a beauty counter in case it appeared to be an endorsement. Malone struggled without a creative outlet and divorced from the industry she loved.

Jo Malone Jo Loves
Fragrance tapas is the latest innovation from entrepreneur Jo Malone

“I had a brand that was so synonymous with who I was and I was no longer part of that. I was miserable not being a shopkeeper and not creating fragrances. I was utterly frustrated and I didn’t know who I was,” she recalls.

“If someone had offered me a job, I would have bitten their hand off but nobody did so I decided to go out there and give it another go.”

And so Jo Loves was born. Malone’s teenage son Josh hit upon the name while they were throwing ideas around at the kitchen table, feeling it best summed up the brand as an expression of the scents she loves.

Creating a point of difference

As a passionate champion of retail Malone wanted to create a brand that gave the customer a reason to come back to the high street. “Did the world need another brand? Of course it didn’t, but it does need a brand with a difference.

“It’s not about a marketing campaign or doing the in-thing, it’s about the ingredients I love and the things that happened to me in my life that I translate back into fragrance,” she adds.

“Shopkeepers became lazy – that’s the reality I’m afraid. We became lazy and it was all about the product.”

Jo Malone, founder, Jo Loves

For Malone, the role of the retailer is to find the magical storytelling elements of a brand, which is key to repeat purchase and creating a language with the consumer. She argues that retailers need to raise their game or risk alienating customers.

“Shopkeepers became lazy – that’s the reality I’m afraid. We became lazy and it was all about the product,” says Malone emphatically.

“It’s about the language and the landscape your product lives in; the packaging, the entertainment, circus, the education – all those things encompassed. You look at all the great brands that succeed today – they have storytelling elements. They draw the consumer in to be the creative heartbeat, as well as the consumer of their product.”

She looks around the candle studio as an exemplification of her retail philosophy. Here customers create their own bespoke candle, selecting a base fragrance and a shot fragrance by first sweeping scent across a blank canvas with a paintbrush. The selected shot and base fragrances are then fused together by blowtorch in-store to form the candle.

Second-time startup

Building a brand from scratch was far scarier the second time around, Malone admits. When she started Jo Malone she was unknown so could stay under the radar, but with Jo Loves she she felt the world was watching.

The process of creating Jo Loves was the complete reverse of conventional brand-building, in particular having to register the intellectual property of the name in every territory before a single bottle had been sold.

Not everything with the launch went to plan. Malone admits she went “horribly wrong” with the original Jo Loves branding, opting for red packaging that drew a stark distinction from the black and cream design that defines Jo Malone. Looking back she is the first to admit the choice was about her emotions and identity, rather than the product itself.

“It wasn’t until I saw it sitting in Selfridges the night before we were going to open I knew I’d made the biggest mistake and there was nothing I could do about it,” she recalls.

“I was standing on the escalator and as I looked over I could see Jo Malone. I was looking at this brand thinking, ‘what have I done?’ I still love this brand, but it doesn’t need me any more. It has another creator and here I am with this brand that doesn’t look right.”

Having sunk all her money into the new business Malone knew there were not sufficient funds to rebrand straight away and that she would have to live with the packaging for what turned out to be four years.

Jo Malone Jo Loves
The first and only Jo Loves store opened on Elizabeth Street in 2013

“It was excruciating. I felt humiliated in myself because I’m the kind of person who is either all or nothing. If I don’t believe in something, I’ll get up and walk away. So it was really, really hard,” she recalls.

Malone went back to the drawing board in 2015, stripping away the colour to a classic white and black. Despite the changes, she knew something was missing. It was only when playing with a bottle of her favourite nail varnish – Shanghai Red – as she was getting ready for a business trip to the Chinese city, that inspiration struck.

“I will never forget the moment. I was sat there with a whole sheet of labels and I just dropped one drop of nail varnish [onto it].

“As I’m dyslexic I never sign anything off. I have a sheet of red dots and when something goes to the next level in the company it has to be ‘red dotted’. I sat there and thought, that’s my red dot – my seal of approval.”

The little red dot is now a feature of every package, bag and label, along with the embossed Union flag, which signifies Malone’s pride in being a British entrepreneur.

The first and only Jo Loves store opened on Elizabeth Street in 2013, an evocative location for Malone, who had worked at a florist on the same street when she was 16. As with all her fragrances, which take inspiration from her life experiences, the Elizabeth Street florist inspired scent No.42 The Flower Shop, a mix of fresh blooms and crushed green leaves.

This is one of 11 ‘shared’ fragrances, including bestseller Pomelo. Launched in October 2011, Jo Loves’ signature scent inspired by summer holidays and sandy beaches was also the brand’s first fragrance. The latest addition to the collection, unveiled in September, is Smoked Plum & Leather, a warm, earthy scent inspired by Malone’s love of riding horses in Montana.

“Online is a challenge and for us is a means of global distribution and repeat purchase, but that element you get [in-store] is missing.”

Jo Malone, founder, Jo Loves

In July, Jo Loves branched out with a deal to sell on premium ecommerce site Net-a-Porter, complementing existing stockist Emirates Airline. The brand also sells through the Jo Loves website, launched in 2012. Although it is difficult to replicate the tapas experience online, Malone and the team have a video series planned to take online consumers behind the scenes.

“Online is a challenge and for us is a means of global distribution and repeat purchase, but that element you get [in-store] is missing and we’re still finding that a challenge around how we make it real for people,” Malone adds. “It can be done, but you just have to think with a different head.”

Global goals

The plan is not to open store after store across the UK and internationally, with Malone preferring small Jo Loves boutiques in select locations. While she sees the obvious potential of being stocked by department stores, she will only work with retailers that are prepared to take on the whole concept.

“If I wanted to put my product on shelves, it would be in almost every department store but that’s not what I’m interested in. I’m interested in little fragrance brasseries and creating tapas, which is why China is so amazing because they get it in a second,” she states.

READ MORE: Mary Portas – ‘High street’s future will be localism, not big brands’

Brand expansion opportunities are very different from what they were 20 years ago when the focus was primarily on America and Europe. Today, Malone believes her experiential, retail theatre-focused strategy will resonate strongly across Asia and the Middle East.

“The Middle East wouldn’t have been in my top five 20 years ago and now it’s in my top three and China is in my top five,” she explains.

“In China, their minds are so hungry and they are so agile. Everything is an adventure and everything is precious. I’ve been privileged recently to spend a lot of time with Chinese business people from all different walks of life and their hunger for British luxury products is amazing, but their hunger for experience is exactly what we’re about. The Middle East is the same.”

Jo Loves is currently on the cover of the Emirates in-flight magazine – and will be until March 2017 – something she describes as a “powerful statement” that will get her business in front of the airline’s 64 million passengers.

Malone’s business philosophy comes from a continual desire to make things better and while not involved in every strategy, she is aware of all ongoing activity.

“Yes I am a control freak, but control freaks change the world.”

Jo Malone, founder, Jo Loves

“If I don’t feel something is right, I will make my voice heard and if I’m the only person in the office who feels it, tough. I would say yes I am a control freak, but control freaks change the world.”

Changing the world is all part of the plan for Malone, who is determined to get back on top of “the mountain” again. She came close in April with her inauguration into the World Retail Congress hall of fame, her proudest career moment to date.

“I had Tommy Hilfiger on one side and Solomon Lew on the other, both of whom are great global retailers. Standing up on that stage I took a second to think ‘oh my God, years ago I would have given my right arm for five minutes with just one of you’.”

Malone describes the end of her inauguration speech in Dubai as the moment she realised she was back after years in the wilderness, separated from the beauty industry to which her identity is so inextricably linked.

“I proved with Jo Malone that I could build a business from a kitchen sink. The world’s biggest cosmetic company could not produce that, they had to buy it,” says Malone with conviction.

“These things don’t happen to people who have had a lucky break twice. These things happen when people see the product and the true integrity of the creator in a business and we’re going to plant it in every corner of the world again.”

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‘Mobile ad growth shows there is no longer a hierarchy of screens’

Customer obsession with their smartphones saw mobile ad spend growth hit its highest level in more than two years in the first half of 2016, leading the IAB to warn brands that there is “no longer a hierarchy of screens” and they should tailor content to where their audience is, rather than assuming that desktop or mobile are generally more effective.

The report, compiled by PwC, found that mobile ad budgets were up 56% to £1.7bn in the first six months of the year. This means that 36p in every pound spent on internet advertising now goes on smartphones, an increase of 4p in the last five years.

Across the digital ad market, display was the format that produced the highest like-for-like growth, accounting for 31% of digital spend, while social media display has grown 43% year-on-year to £745m.

The growth is put down to consumer’s increasing dependence on smartphones with 82% of owners now checking their phones within an hour of waking up and 42% of owners aged 25-34 using their phone as their primary news source.

But it was video that grew the fastest, with ad spend up 129% to £298m.

Tim Elkington, IAB UK’s chief strategy officer, puts the increase in video ad spend down to the fact that video content can now be viewed on multiple devices, something he says marketers must consider when they are delivering content.

“There is no hierarchy of screens anymore. It’s about which device has the right content for consumers.”

Tim Elkington, chief strategy officer, IAB

The shift to native advertising

The report found that content and native were the fastest growing online ad formats and that ads designed to look like content, including advertorials and ads in social media news feeds, growing by 29% to £451m.

Elkington believes that content and native’s growth is down to connecting with people in the right way, depending on device and channel. He says that the news feed structure of social media, including Facebook and Twitter, has allowed marketers to do this and to engage with consumers in a “less interruptive” way, allowing them to “establish a better form of mobile advertising.”


The power of search

Elkington highlights that despite display success, paid-for search still shows increase in its share of mobile spend, which came in at 53% for the first half of the year, compared to 51% the same time in 2015.

“It is interesting that search continues to grow at such a rate. Usually when something is so big for so long you expect it tailor but the power of search keeps going,” he says.

His thoughts back up comments made by Sir Martin Sorrell, the boss of WPP, at the Festival of Marketing last week. He said WPP will spend £6bn with Google and £1.7bn with Facebook this year because “search is more powerful than social”.

Despite the report’s positive findings, Elkington believes that digital growth will slow next year, as he references Group M’s forecast that digital ad spend growth will be 14% in 2016, compared to 11% in 2017. He says this could also be impacted by Brexit.

“These results are January to June, we will have to wait until the second half of the year to see the impact of Brexit. The whole advertising industry will be dependent on what happens with Brexit,” he said.

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Brexit set to be a rollercoaster for marketing budgets and jobs

Marketing budget increases hit their highest level for more than two years in the third quarter as marketers saw “fresh opportunities” around Brexit.

More than a quarter (26.2%) of senior marketers increased their ad spend during the third quarter, compared to 12.9% who registered a fall, according to the IPA’s quarterly Bellwether Report. This means the balance of marketers saying they would increase their spend stands at +13.4%, a rise of nearly three percentage points compared to the second quarter the highest level since Q2 2014.

bellwether q3 2016

The numbers are particularly impressive given the negative repercussions many expected as a result of the vote to leave the European Union, according to economist Paul Smith, who authors the Bellwether Report. He says the third quarter results prove marketers are still finding business opportunities despite concerns over what Brexit will look like and the impact that will have on the economy and consumer spending.

Read more: Why Brexit is both an opportunity and a strategic risk for marketers

He explains: “Anecdotal evidence from the survey suggests that companies are seeing fresh opportunities around Brexit, perhaps willing to commit new marketing resources to maintain brand awareness and competitiveness particularly in overseas markets.

A year of two halves

Nevertheless, the report predicts that overall there will be a small dip in ad spend in 2017 (-0.7%), following growth in 2016 (+1.9%). Paul Troy, chief marketing officer at Confused.com, believes 2017 will be a year of “two halves”.

“You will get a true sense of what is happening in March next year. I reckon the first quarter will be positive but come the second quarter marketing budgets will drop drastically and it will be very much a year of two halves.

He adds: “Nobody will want to throw millions at TV in the second quarter or maybe even the third, as they will be hesitant when planning as that’s when we will know if Britain will retain access to things such as the single market.”

Troy expects digital to continue its run of growth as it allows marketers to adjust their budgets. In the third quarter, digital saw some of the strongest growth of any sector, with a net balance of +9.5% of marketers increasing their spend.

It was beaten only by events with a net balance of +9.9%. Ad spend within PR, market research, main media advertising and sales promotion advertising all registered declines in the third quarter.

“If, like Chancellor Philip Hammond, we anticipate a rollercoaster ride then marketers must prepare for the ups and downs.”

Paul Troy, CMO, Confused.com

Flexible budgets and plans to adjust when we have up and down quarters, that’s what will be key in these uncertain times,” says Troy.

The outlook from consumers

Consumer confidence returned to pre-Brexit levels in September, according to GfK’s monthly index, while British consumers’ propensity to make major purchases rose two points to +9. However, Troy fears 2017 will be a very different story.

“We had record car sales this summer but I highly doubt that will happen next summer as consumers will be put off making big purchase decisions,” he explains.

“I wouldn’t expect [consumer confidence] to be up in 2017 and therefore it will be the financial officers, not the marketers, making the major decisions and planning adjustments around March.”

Paul Troy, CMO, Confused.com

And marketers remain concerned about industry financial prospects. A net balance of -12.1% of respondents are pessimistic, down from -8.1% in the prior quarter and the lowest level since the end of 2012. And while marketers are a little more optimistic about their own company’s financial prospects, this fell to +10.6%, from +13.7% in the previous quarter.

Read more: Mark Ritson: If Brexit were a soap brand, life would be simpler

But with the third quarter growth in marketing budgets extending a current record period of four years of sustained growth, Smith says marketers should look on the bright side.

He concludes: “Given the increasingly influential role that advertising, marketing and the wider creative industries play in driving British output growth the latest Bellwether provides welcome news at a time when the country is grappling with heightened economic and political uncertainty following the Brexit vote.”

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