News: 7 Day Round Up
November 14 - 20
November 14 - 20
FORD, STARBUCKS GAIN FROM DIGITAL MEDIA NEW YORK: Major advertisers such as Ford, Starbucks and JCPenney have all benefited from placing a heightened emphasis on digital media, a strategy which has enabled them both to engage with consumers and build their brands on the web.In April, Ford, the automaker, asked 100 influential US bloggers to test drive its new Fiesta for a period of six months, and regularly post their opinions of the car on portals like Facebook and Twitter. By October, it estimated that the resulting material had received 4.3 million hits on YouTube and 3 million comments on Twitter, while 540,000 people had viewed photos hosted on Flickr. According to Jim Farley, Ford's group vice president of global marketing, recognition rates of the Fiesta have grown rapidly, despite the fact it won't be available until mid-2010. "If you would have told me that we would have 100 vehicles in the US ... and we would have 60% brand awareness in the segment, I would have said there is no possible way," he said. "To get 60% awareness in traditional media, it costs somewhere north of $50 million (€33.6m; £29.9m)," continued Farley, who added that the web is now a viable, and more low-cost, alternative to these channels. "Online has become mass media. A Yahoo or Google page takeover actually gets more eyeballs than a network TV commercial now. That hasn't happened before." In a similar fashion, Starbucks, the coffee chain, mainly used TV spots in the run up to Thanksgiving in the last two years, but has now shifted its focus to the internet, such as with display ads on Meebo and NYTimes.com. It has also forged a tie-up with Pandora, the music website, to promote All You Need is Love – a CD produced in support of the charity Red – via advertising, a branded playlist and through its iPhone app. Furthermore, the Seattle-based organisation will donate $1 to the not-for-profit organisation each time a customer spends $15 or more in its stores, alongside its on-going sale of a range of Red-branded goods. In 2008, it encouraged people to have their photos taken stood "inside" the brackets of the charity's logo, mock-ups of which were hosted in its coffee houses, and upload them to a campaign website. This year, it has developed a page on Flickr where consumers can post images on a similar theme, and created a tool allowing members of Facebook to send virtual Red/Starbucks "cups" to their friends. Furthermore, the StarbucksLoveProject will ask web users to produce a "love drawing", with the company giving five cents to Red for the first million such digital pictures submitted. Chris Bruzzo, Starbucks' vp, brand, content and online, argued "people are saying this is going to be a big year for social media and we're a microcosm of that. Whereas last year it was a curiosity, this year it's a core part of the program." "It's like we've taken the version 1.0 of last year and now we're really doing it at scale and going to a lot more places where our customers already are." JCPenney, the retailer, announced this week that it will stop publishing the bi-annual Big Book, replacing it with "timely speciality catalogues", an enhanced website, social media tools and iPhone apps. Tim Lyons, of its corporate communications division, said changes in the industry landscape meant this decision "was right for our customer and for our business." In preparation for this transition, the mid-market specialist integrated its marketing and merchandising units over the course of two years, with this group now covering both its online and offline activities. It also has "millions of opt-in e-mail subscribers with whom we are in regular contact," Lyons said. Data sourced from Detroit Free Press, AdAge, Multichannel Merchant; additional content by Warc staff, 20 November 2009 Print | Email | Add to Folder Related News StoriesStarbucks faces Italian challenge - Nov 4, 09 Starbucks, Microsoft target social media - Oct 21, 09 Brands planning to invest in online communities - Oct 9, 09  BRANDS MUST DO MORE TO MEET CONSUMER NEEDS  LONDON: Brands must truly place consumers at the heart of their operations if they are to succeed in the long-term, rather than only making token efforts to do so, as is often the case at present, the audience at the Marketing Society's 50th Anniversary Conference heard earlier this week.Speaking at the event – which is covered in more detail here – Professor Hugh Davidson said one major change that needs to take place is a shift from "Shareholder Value" to "Stakeholder Value", with marketers playing a central role in this transition. Antony Jenkins, chief executive, global retail banking, at Barclays, suggested this particularly applied to banks, which should be more transparent and consumer-focused, and try to rebuild trust after the troubles of the financial crisis. Indeed, businesses of all kinds will have to learn to talk to customers in a more intelligent way, according to Rory Sutherland, vice chairman of Ogilvy UK. Similarly, Tess Alps, ceo of Thinkbox, the UK television industry body, predicted TV will become more international, targeted, mobile and available, in-keeping with the evolving lifestyles of viewers. Sir John Hegarty, of BBH, further suggested that brands must replace the idea of the "consumer" with that of an "audience" that wants to be entertained. As part of this process, marketing directors will have to stay in touch with the latest trends, in order to recognise new developments in both the style and substance of what matters to consumers. Warc subscribers can read a report from the Marketing Society's 50th Anniversary Conference here. Data sourced from Warc, 20 November 2009 Print | Email | Add to Folder Related News StoriesUS, Australia spend most on ads per person - Nov 23, 09 Smartphone use rises in UK - Nov 19, 09 North American adspend dominance under threat - Nov 18, 09 ADVERTISERS CONTINUE TO SPEND IN CHINA  BEIJING: China Central Television, the state-operated Chinese broadcaster, posted a record 10.96 billion yuan ($1.6bn; €1.1bn; £965m) in sales during its latest advertising upfront, as marketers attempted to boost their media presence in the country.According to CCTV's figures, 1,000 organisations attended its auction earlier this week, with the average price of airtime rising by 20% across its 14 channels on an annual basis. PepsiCo, the food and beverage company, and Unilever, the FMCG titan, were among the firms taking part in this process for the first time. Despite the presence of a wide variety of multinational advertisers, however, it was their domestic counterparts which dominated when it came to total expenditure levels. Mengniu, the dairy specialist, spent the highest amount overall, on 343 million yuan, including 204 million yuan to sponsor the popular "drama hour" on CCTV in the first half of 2010. Heilongjiang Feihe Dairy was is second place on this measure, on 311 million yuan, followed by Gree, the air conditioner manufacturer, on 303 million yuan, and Midea, the consumer electronics giant, on 261 million yuan. Procter & Gamble, the world's biggest advertiser, was the top-ranked multinational company, with a comparative total of 256 million yuan. Greg Paull, principal of R3, argued "there are still a lot of local clients dominating the auction ... Local marketers still over-index on CCTV as they try to build brand reputation." GroupM China estimated that brands in the food, beverage, alcohol, insurance and financial services sectors were responsible for some 46.5% of CCTV's revenues in all. More specifically, the alcoholic drinks category boosted its outlay by 170%, with Lang Jiu and Yang He Jiu both making some major acquisitions, while the home appliances and auto sectors were up by 70%, and home decoration by 116%. Bessie Lee, ceo of GroupM China said "we have seen much higher demand and limited supply at the CCTV auction. Even the pre-bidding negotiation with advertisers was more controlled and regulated than previous years as a result of the limited supply." "Clients showed a more active attitude in the bidding. This in turn has made CCTV rates and coverage look very competitive and cost-efficient," she added. Data sourced from Media/CCTV; additional content by Warc staff, 20 November 2009 Print | Email | Add to Folder Related News StoriesMixed picture for online in Asia Pacific - Nov 23, 09 China poses challenges to luxury brands - Nov 19, 09 Online audience grows in Asia Pacific - Nov 18, 09 DANONE SEES "PROFOUND" CHANGE IN CONSUMERS  PARIS: Consumer behaviour is going through a "profound transitional phase" that will have major implications for brands both during and after the downturn, according to Emmanuel Faber, co-chief operating officer of Danone, the food group.At a recent event for analysts and investors, the company stated that its target for the second half of this year was to post like-for-like sales growth of 4%, a figure that rose to 5% when looking to the medium term. It has come under increasing pressure from changing shopper behaviour in the recession, a trend that has applied to various sectors including bottled water, where the French firm has a presence with its Evian brand. Faber argued "the world at large has gone, and is still going through, a profound transformational phase which will have a long-lasting impact on society and on consumer behavior." "Our market share gains in 2009 are an evidence of the continued unparalleled ability of our brands to create value for our consumers, once adapted to the new macro-economic conditions." The Paris-based organisation, which also makes Activa and Actimel, generates around 57% of its revenues from the dairy category, where its rivals include Nestlé and Unilever. Its main initiatives in the last few months have included reducing prices, launching new products and intensifying its promotional activity in an effort to adapt to the demands of the financial crisis. In the third quarter, volume sales improved by 7.1%, but value sales declined by 3%, while organic totals recorded a decline of 4.1%. "We will continue to focus on delivering above category top-line growth which will be predominantly driven by volume growth," Faber said. "The constituents of our top-line growth as well as our continued focus on cost competitiveness will remain the key drivers of our value creation." Danone's co-chief operating officer also echoed the sentiments expressed by companies including Wal-Mart in stressing the growing importance of health and wellness to customers. "We are, more than ever, convinced of the relevance or our mission to 'bring health through food to the largest number of people'," he said. Data sourced from Danone; additional content by Warc staff, 20 November 2009 Print | Email | Add to Folder Related News StoriesUnilever plots fresh innovation push - Nov 18, 09 Unilever, P&G turn to interactive ads - Nov 17, 09 Major advertisers turn to umbrella branding - Nov 16, 09 COLGATE PALMOLIVE TARGETS EMERGING MARKETS  NEW YORK: Colgate Palmolive, the household goods giant, is heightening its focus on several key emerging markets, which it expects to be among the main drivers of growth over the course of next year.The company has predicted that its global volume sales will post an uptick in the 4% to 7% range during 2010, with a number of rapidly-developing nations acting as central contributors to this trend. More specifically, Brazil, Russia, India and China – collectively known as the BRICs – will be especially important for the toothpaste-to-homecare manufacturer. "We're looking to grow faster in the emerging markets than we do in the developed markets ... the BRIC countries would be obvious areas of growth," said Ian Cook, the company's ceo. "I've travelled this year to all of them at least once if not twice, and my sense is that the economic confidence in China, in Guangdong, or in India (and) Brazil is quite vibrant." China is likely to be "stronger than other markets" given the resilient performance of its economy in the financial crisis, according to Cook. Russia, by contrast, has hit a small "bump" during the recession, but more positive signals are now coming from the country, he added. Overall, Colgate hopes these areas will deliver annual gains of over 10% in 2010, building on the growth recorded in the last few years. "If you take the product penetration and you take market share, it's not an enormous stretch to see a business going double-digit," Cook said. "I hasten to add again our businesses are not really driven by consumer confidence per se," he continued, as Colgate's staple products have traditionally been relatively unaffected by broader changes in the trading climate. This week, reports have emerged of a possible merger between Colgate and Reckitt Benckiser, the UK-based household goods specialist, a matter on which Cook refused to be drawn. Data sourced from Reuters; additional content by Warc staff, 20 November 2009 Print | Email | Add to Folder Related News StoriesConsumer goods sales to rise in 2010 - Nov 18, 09 Unilever plots fresh innovation push - Nov 18, 09 Unilever, P&G turn to interactive ads - Nov 17, 09 MOBILE SOCIAL NETWORK USE RISES IN APAC  SINGAPORE: The number of consumers using their mobile phone to access social networking websites in Asia Pacific is continuing to rise, new figures published by IDC, the research firm, show.IDC conducted a poll of 1,400 adults in the region, and found that over 50% of mobile owners in China, India, South Korea and Thailand have used this device to log on to portals like Facebook, Friendster and Hi5. More specifically, this figure reached a high of 65% in Thailand and 62% in China, where more than 120 million people are estimated to belong to these types of Web 2.0 services, the China Internet Network Information Center has reported. The main activities of this group on their phones include uploading photos, updating their status and profile pages, as well as reading and replying to messages, and finding out the latest news. One key driver of this trend, IDC argued, was the fact more people in China, India and Thailand own wireless handsets than computers. By contrast, the popularity of this activity in Korea results from the "technologically advanced" nature of the country, meaning "mass adoption of mobile internet" has occurred more quickly than elsewhere. "Mobile phones and mobile internet hold the promise of changing the SNS landscape in the Asia Pacific region," said Debbie Swee, an analyst at the company. "Particularly in markets where PC penetration is relatively low, mobile phones have the potential to eventually overtake the PC as a preferred way of accessing SNSs," she added. At the other end of the spectrum, just 19% of Australian mobile users visit social networks using this platform at least once a week, a total that climbed to 25% in Singapore. Swee suggested the high level of PC ownership in these nations has produced a "strong inertia against adopting regular mobile access of SNSs." Across the region, people who had not utilised social networks via their cellphone said the charge they would incur from their service provider was the main barrier stopping them from doing so. In response, IDC recommended that in China, India and Thailand, a cheap, standardised access fee would help further boost user levels. By contrast, in Australia, Korea and Singapore, where prices are already low, "operators need to correct users' misconceptions of pricey data plans through advertising and other marketing efforts," said Swee. "Failing to do so could mean that mobile internet applications and services, not just mobile SNSs, will take longer to truly take off," she warned. Data sourced from WARC, 20 November 2009 Print | Email | Add to Folder Related News StoriesFacebook builds buzz for brands - Nov 23, 09 US giants failing on Twitter - Nov 19, 09 Big brands strengthen presence on Twitter - Nov 11, 09 US GIANTS FAILING ON TWITTER  NEW YORK: A majority of the biggest companies in the US are failing to take advantage of the opportunities offered by Twitter, the microblogging portal, to build relationships with consumers and interact with potential brand advocates, according to a study by Weber Shandwick.The PR agency assessed the activities of the members of the Fortune 100 index in an effort to identify which organisations were leading the way in establishing best practices on the Web 2.0 service. Wal-Mart, the retailer, Procter & Gamble, the consumer goods giant, Coca-Cola and PepsiCo, the FMCG firms, and General Motors, the automaker, are among the major advertisers which feature in this group. Where the corporations concerned owned a variety of different products, only their "flagship" offering was subject to analysis, based on criteria including how well-branded their Twitter accounts were, and the overall purpose of their activity on the site. Similarly, the study aimed to ascertain the "engagement" levels of brands on the rapidly-growing web property, revealed through metrics such as the number of replies, "retweets" and references received following on from their posts. Overall, 73% of the sample had a presence on the San Francisco-based platform, with this cohort boasting a combined total of 540 accounts. However, in 76% of cases, fresh "tweets" were added to these feeds on a highly infrequent basis, while 52% of these channels were also under-performing when it came to engaging members of the social network. In terms of the purpose of these streams, 26% were defined as being news-based, and were thus a "one-way flow of information ... that offered no engagement with followers," Weber Shandwick said. A further 24% of accounts seemed to be making a more concerted attempt to build brand awareness, but in many cases also "appeared to be on Twitter simply to have an online presence," rather than to listen to customers. Just 16% were categorised as mainly focusing on sales, such as by providing offers, discounts and coupons, which were argued to represent a key way of generating revenues. Customer service was the overarching rationale in 9% of cases, and Weber Shandwick suggested these examples were typically for the products most concerned about the possible consequences of negative word-of-mouth on consumer perceptions. Just 8% took the form of "thought leadership", an area that requires a broader approach covering newspapers, trade publications, events, and so on, while 14% were more niche, such as staff-only or recruitment communities. With regard to "personality", 53% of Fortune 100 Twitter members lacked a specific tone of voice or character, while 32% had uploaded bespoke backgrounds, and added the names and photos of the employees who were responsible for making entries. In measuring engagement, the PR company found that 18% of its sample had between 501 and 1,000 "fans", with 12% recording a score of between 1,001 and 2,000, compared with 16% in the broad region of 2,001 and 10,000, and 4% with over 10,000. Similarly, 76% of firms had made under 500 "tweets", while 12% were in the 501 to 1,000 range, 8% in the 1,001 to 2,000 bracket, falling to 3% for those on more than 2,001 but under 10,000, and 1% that had already broken into five figures. In the same vein, over 50% of accounts were said not to be delivering in terms of the numbers of links, hashtags and "retweets" that resulted from their messages. "This indicates either a lack of engagement by many companies with their followers, or newly established accounts that haven't yet started using the platform to build relationships," Weber Shandwick said. A further 41 relevant accounts, which were not included in the study, appeared to represent incidences of "brandjacking", when an "account with a company name is created by an unauthorised third party." Data sourced from Weber Shandwick/AdAge; additional content by Warc staff, 19 November 2009 Print | Email | Add to Folder Related News StoriesFacebook builds buzz for brands - Nov 23, 09 Mobile social network use rises in APAC - Nov 20, 09 Big brands strengthen presence on Twitter - Nov 11, 09 SONY PLANS TO "REINVENT" MARKETING STRATEGY  TOKYO: Sony, the electronics giant, is planning to "reinvent" its approach to marketing, and will now concentrate more of its resources behind a select group of products, as it seeks to heighten the impact of its commercial communications.The company's total advertising expenditure reached ¥436.4 billion ($4.9bn; €3.3bn; £2.9bn) last year, although this total applied to its diverse range of consumer electronics, movie and music operations. One key reason behind the Tokyo-based firm's shift in strategy is said to be that most of its competitors typically devote the majority of their funds to particular brands, while Sony's equivalent offerings enjoy less comparative exposure. Apple, for example, only spent $501 million on advertising over the course of 2008 as a whole, but allocated a large share of this total to the iPhone, its increasingly popular smartphone. Similarly, Nintendo's outlay in this area stood at just ¥117.3bn over the same period, but this budget was almost exclusively deployed in support of its Wii and DS consoles and games. Sony will now seek to replicate such a focus for the goods it believes will make the biggest market impact, with a new television due for launch in 2010 likely to be one early beneficiary of this trend. Further brands set to see an uptick in adspend include its Blu-Ray players and the PlayStation games machine, as well as its range of video cameras and, ultimately, 3D TV sets. "We cannot just rely on the brand to sell products," a company executive told the Financial Times, the UK daily news title. Competition in the electronics market has intensified in recent times, largely as a consequence of new technological developments, which are re-shaping the contours of the industry. For example, Sony's Reader, the eBook device, has faced a major challenge not from one of its traditional rivals, but from the Kindle, which is produced by Amazon, the online retailer. Other initiatives of current interest to the Japanese corporation include making its in-house content available across a variety of different platforms, as it attempts to drive further revenues from this channel. Data sourced from Financial Times; additional content by Warc staff, 19 November 2009 Print | Email | Add to Folder Related News StoriesRedbox video rattles movie studios - Sep 8, 09 Sony signs up 'blogger dads' - Aug 24, 09 Sony launches cheaper PS3 - Aug 20, 09 COKE TURNS TO SOCIAL MEDIA  ATLANTA: Coca-Cola, the US soft drinks giant, is making increasing use of social media as both a brand-building and PR tool, as it seeks to find new ways to actively engage with consumers on digital platforms.The beverage maker recently announced the details of Expedition 206, which will see three bloggers travel to the more than 200 countries where its eponymous cola brand is sold over the course of 2010. In providing updates about their experiences, these "happiness ambassadors" will use a dedicated campaign website, as well as a range of Web 2.0 services like Facebook, Twitter, Flickr and YouTube. More broadly, this scheme has already resulted in some major benefits within the company itself, having fostered an integrated approach between its marketing, PR and communications divisions. Clyde Tuggle, Coca-Cola's svp, global public affairs and communications, said "the challenge that we put to the communications team was to think about the social and digital media space as a new venue for driving good public relations for the company." This unit, which "has typically worked in the space of print media and broadcast media, was suddenly challenged to go into this new media space and come up with an idea to expand our brand," he added. It will also be charged with coordinating the logistics behind Expedition 206 for each individual market concerned, which will require a number of Coke's regional arms to boost their capacity in this area. The Atlanta-based firm's marketing team will also seek to incorporate this activity with events such as the Winter Olympics in Vancouver, the World Cup in South Africa and the World Expo in Shanghai. Moreover, the bloggers will play an active role in helping celebrate McDonald's 20th year of trading in Russia, in just one example of where this platform will extend beyond Coke's own brands. While there will inevitably be issues to be resolved during year-long programme, Tuggle described the situation as a "muscle to be flexed and toned at Coca-Cola." Metrics such as the number of pages viewed online, as well as the overall total of media impressions generated, will be used to assess how successful the campaign has been. Normally, Coke is "not prepared to invest unless we know it's going to deliver," Tuggle continued, although he added there is "something seductive" about the more uncertain nature of its latest experiment. Data sourced from AdAge; additional content by Warc staff , 19 November 2009 Print | Email | Add to Folder Related News Stories"Augmented reality" attracts big advertisers - Nov 23, 09 Coke sets out ambitious growth plans - Nov 18, 09 Coca-Cola targets Brazil - Nov 16, 09 SMARTPHONE USE RISES IN UK  LONDON: The number of smartphone users in the UK is continuing to grow, and has now reached a total of 6.2 million people overall, new figures from The Nielsen Company, the research firm, show.Nielsen reported that devices like Apple's iPhone and Research in Motion's BlackBerry boosted their market share in the European nation by 1% during the third quarter, to 15% overall. Similarly, the user base for these handsets rose by 10% when compared with the figure of 5.6 million recorded in the period from April to June this year. Of the UK's total mobile audience, 10.4 million accessed the mobile web in Q3, up by 1.6 million quarter-on-quarter, while 4.1 million downloaded at least one application, compared with 3.1 million who did the same during the preceding three months. More than 37 million British consumers used text message facilities during this period, with 10.8 million sending picture messages in the same timeframe. Some 2.6 million uploaded content via their mobile, amounting to growth of 300,000 people on Q2, with video use also up by 500,000, to 1.8 million, and instant messaging by 400,000, to 3.4 million. Location-based services registered a slight uptick, to 3.3 million, while email and text alerts saw improvements in uptake of more than half a million people on a quarterly basis. Edward Kershaw, Nielsen's vp of Mobile Media, said "although there have been sizable increases in the take-up of new mobile technologies such as video and location-based services, they remain niche forms of behavior." "The era of the handset as a truly multi-media device on a mass-market level lies somewhere on the horizon, and the key for companies to successfully harness mobile lies in a realistic understanding of what activities people on a large-scale are actually doing with their handsets now." Data sourced from The Nielsen Company; additional content by Warc staff, 19 November 2009 Print | Email | Add to Folder Related News StoriesBrands must do more to meet consumer needs - Nov 20, 09 Online adspend set for growth in Europe - Nov 17, 09 UK consumers "unaware" of targeted ads - Oct 30, 09 CHINA POSES CHALLENGES TO LUXURY BRANDS BEIJING: The target audience for luxury brands in China tends to be much younger than in areas like the US and Europe, posing a range of challenges to premium brands seeking to make inroads in this vital market.Bain & Co, the consultancy, has forecast that global luxury sales will decline by 8% this year, to €153 billion ($228bn; £136bn), including decreases of 16% in the Americas, 8% in Europe, and 10% in Japan. However, conditions are expected to be markedly different in the world's most populous nation, where revenues will rise by 12%, to €6.6bn, with Asia as a whole enjoying an uptick of 10% overall. It is estimated that the average Chinese consumer with a net worth of at least $150 million is 50 years old, measured against a comparative figure of 65 years old in the US and UK. This is according to Rupert Hoogewerf, who works on the Hurun Report, a publication providing a regular insight into the preferences and behaviours of "high net worth individuals" in the fast-growing economy. Similarly, the typical shopper with a value of at least $15m is 43 years old, while the 825,000 Chinese possessing more than $1.5m are around 39 years old, some 11 years the junior of their counterparts in Europe and America. "Much of this wealth has only been created since the 1980s – in other words, a solid generation later than in Hong Kong or Taiwan," said Hoogewerf. "You'd have to look back to the late nineteenth century in the United States, or to the industrial revolution in Britain, to find anything comparable to the wave of entrepreneurs who are now starting up in China." In light of these trends, it is essential to adopt bespoke, localised strategies, as the demands of this cohort are markedly different than those witnessed elsewhere. "A lot of Western brands are trying to apply the same model in China as they have back home, and are thus potentially targeting too old a group, when really they need to be more youthful and dynamic to attract these sorts of people," added Hoogewerf. Another factor which must be considered is the substantial variations observable in the country, according to Claudia D'Arpizio, a category specialist at Bain & Co. "Companies need to have a completely different merchandising plan for different parts of the country," she argued, as, for example, Shanghai favours more formal business wear, whereas more central areas dress more casually. Ermenegildo Zegna, the high-end Italian menswear brand, recently opened a 7,300 square-foot store in Hong Kong, with a particular focus of younger consumers. "Asia has an incredible thirst for fashion and quality; the region is very important for us," Gildo Zegna, its chief executive, said. "Greater China has been our fastest-growing market for the past three years." The key to succeeding in this latter region, he argued, is to track the specific needs of consumers, rather than exporting tried-and-tested approaches. "You have to constantly fine-tune," Zegna stated. "We've become much more scientific and analytical. We seek constant feedback from the customer, and monitor how particular items are doing." Data sourced from New York Times; additional content by Warc staff, 19 November 2009 Print | Email | Add to Folder Related News StoriesMixed picture for online in Asia Pacific - Nov 23, 09 Advertisers continue to spend in China - Nov 20, 09 Online audience grows in Asia Pacific - Nov 18, 09 AEGIS SEES REVENUES SLIDE  LONDON: Aegis, the marketing communications group, posted a double-digit decline in organic revenues over the first nine months of this year, as the financial crisis continued to impact advertiser budgets.The company saw its total group sales rise by 1% on a reported basis from January to September, but organic totals were off by 10.8%, including drops of 10.4% at Aegis Media and 11.5% at Synovate. More positively, Aegis Media has recorded new business wins to a value of $2.4 billion (€1.6bn; £1.4bn) in this period, including Kellogg's, Beiersdorf, Credit Agricole, Société Générale and Nokia. The London-based organisation has also reported staff cost savings worth £36.7 million for the year-to-date, a move which appears particularly necessary as it did not foresee that trading conditions would improve over the rest of 2009. John Napier, its chairman interim ceo, said "our strategy to perform resiliently in a downturn has continued to deliver and we are pleased to confirm further progress in a difficult and challenging market environment." Separately, Publicis Groupe, the marketing services conglomerate, should return to organic growth next year, having seen some "encouraging" trends start to emerge among advertisers, Maurice Lévy, its ceo, has said. While presenting at the Morgan Stanley Technology, Media and Telecoms Conference in Barcelona, Lévy argued that "all the signs we have in budget meetings with our clients are very encouraging." He added that Publicis was in "good shape" for the final three months of 2009, when its revenues are set to be "slightly better" than the total of €1.05 billion ($1.6bn; £953m) recorded during the period from July to September. Looking forward to next year, Lévy predicted that "we will be negative in H1, low single digits, positive in H2, and more positive in the fourth quarter." More specifically, he suggested that like-for-like figures were likely to "change to positive" in either June or July. Despite this, the company's clients are expected to continue exerting tight controls on the remuneration paid to their agency partners, even when the recovery begins. One key shift will be towards more performance-based models, a transition encouraged by the enhanced measurability offered by digital media, but which could also offer some benefits. "There will be an incentive compensation ... and I'm convinced that fees will deliver better margins," Lévy stated. Data sourced from Reuters; additional content by Warc staff, 19 November 2009 Print | Email | Add to Folder Related News StoriesClient-agency relations are stable: Lévy - Oct 28, 09 Publicis revenues down 5.3% in Q3 - Oct 27, 09 Lévy remains optimistic - Oct 13, 09 COKE SETS OUT AMBITIOUS GROWTH PLANS ATLANTA: Coca-Cola, the US soft drinks giant, is hoping to double the revenues generated by its core and bottling operations to $200 billion (€134bn; £119bn) by 2020, with new product launches and major marketing campaigns set to be among the key drivers of this growth.At an event for investors held earlier this week, the owner of Sprite and Fanta outlined its intention to increase the number of its drinks sold each day to 3 billion by the end of the next decade. Muhtar Kent, its president/ceo, said this meant the Atlanta-based firm would have to perform ahead of the high-end of its typical target annual expansion rate of 5% to 6%, but was "definitely achievable." "It's going to take a lot of work. It's going to take some fantastic marketing and a lot of synergies to be powered back into marketing. But we believe our system has the capacity to achieve that trajectory," he suggested. Several other factors are working in the beverage maker's favour in achieving this goal, he added, including the improving economic strength of several key emerging nations, rising levels of urbanisation, and the growth in the size of the middle class. In just one example of the possibilities available, shoppers in China currently drink just eight portions of Coke a year, compared with a total of 214 in the US, and 387 in Mexico. Alongside its eponymous cola, the Atlanta-based firm has 12 further brands that deliver more than $1bn in retail sales at present, from Powerade, its sports drink, to Georgia, the coffee range. Its efforts to reach $200bn in revenues over the period to 2020 will see Coca-Cola attempt to increase the number of such brands to at least 30 by this date. Alongside an emphasis across its portfolio, however, Kent argued "we must continue to grow the epicenter of our business – trademark Coca-Cola." "We know that winning in 2020 and beyond is going to require new capabilities, new models and new innovations," he added. The drinks titan has previously announced that it will invest heavily in China, India and Brazil over the next few years, which could offset slowing sales in its home country, and other core areas like Japan. More specifically, it will continue to spend on building its brands, with redesigned packaging, as well as new products across a range of different price points, also receiving further attention. A marketing campaign tied to the FIFA World Cup in South Africa in 2010 will be among its main communications initiatives in the near future, but it has a considerably broader long-term strategy. "We are laser-focused on targeting the right consumers with fully integrated global marketing campaigns that work on many levels, across many geographies and cultures, and leverage a rich variety of media and channels," said Kent. As part of this process, Coke will aim to attract both younger and ageing shoppers, with the development of this latter demographic having been argued to constitute a global "megatrend" by Credit Suisse. "To target ageing and affluent consumers globally, we are actively exploring new ingredients, new functionality and new occasions," Kent said. "At the same time, we are creating new strategies that are winning over a massive new generation of teens to drive growth of trademark Coca-Cola." Alongside a number of other major advertisers, Coca-Cola has also been placing a heightened emphasis on issues relating to the environment, such as by launching a bottle partly made from plant extracts. Its overall CSR objectives include becoming the "global leader" in terms of sustainable water and energy use, as well as for its packaging and climate protection activities. "Consumers now value, and are defining themselves more and more by their identity, their values and their beliefs and they are insisting that companies do the same," argued Coke's chief marketing and commercial officer Joseph V. Tripodi. Data sourced from Reuters, Wall Street Journal, Coca-Cola; additional content by Warc staff, 18 November 2009 Print | Email | Add to Folder Related News Stories"Augmented reality" attracts big advertisers - Nov 23, 09 Coke turns to social media - Nov 19, 09 Coca-Cola targets Brazil - Nov 16, 09 UNILEVER PLOTS FRESH INNOVATION PUSH  LONDON: Unilever, the world's second-largest consumer goods company, is heightening its focus on innovation, as it seeks to strengthen its position both during and after the economic downturn.The Anglo-Dutch giant is hoping to introduce the first new products that have formed part of its recent development drive, operating under the title of Genesis, in 2010. According to Genevieve Berger, the company's chief innovation officer, it will then unveil a number of "big innovations" over the course of the next two years. Since taking up her position in June 2009, Berger has consolidated Unilever's R&D operations into six main global centres, which are stationed in China, India, the Netherlands, the UK and US. "There is, with my appointment, more discussion at the top table around big innovations and big opportunities," she said. "It's quick. 2010 is already tomorrow. There's a whole set of launches and innovations starting in 2010. Genesis as such would partly start in 2010, and will mainly be in 2011." More specifically, Berger argued the aim was to make goods with a similar impact as the whitening dye, which removes yellow stains, that has been adapted for use in both Radiant detergent and Signal White Now toothpaste over the last three years. "We'll start with personal care and have a clear road map of applications in other categories," she added. The owner of Knorr, Hellmann's and Dove currently has 17 different programmes running under the auspice of the Genesis project, with the hope of delivering "big wins" going forward. It is also implementing a number of "renovations" across its existing portfolio, such as with the launch of Magnum Temptation, which has helped increase brand sales over the last six months. The London-based firm has 6,000 employees operating in the fields of R&D and innovation, and its ceo, Paul Polman, recently stated that €1 billion ($1.5bn; £886m) has been allocated to this area. Polman took over from Patrick Cescau in September last year, and has delivered impressive results thus far, thanks to initiatives such as 30-day turnaround plans for under-performing products. Having held senior positions at both Procter & Gamble and Nestlé, Polman has also argued that innovation was "always going to be the main driver" of Unilever's future performance. Among the main successes during his time as an executive at Procter & Gamble was the Swiffer, a new type of duster, which generated $100 million of sales in its first six months on store shelves. "Successful innovation was the obvious missing ingredient in Unilever's turnaround during the Patrick Cescau years," said Martin Deboo, an analyst at Investec. "Chapter 1 in the Polman story is all about better execution and a more performance-orientated culture. Innovation is Chapter 2. Polman was at P&G when it rewrote the book on innovation during the first years under Alan Lafley," he added. Data sourced from Bloomberg; additional content by Warc staff, 18 November 2009 Print | Email | Add to Folder Related News StoriesColgate Palmolive targets emerging markets - Nov 20, 09 Danone sees "profound" change in consumers - Nov 20, 09 Consumer goods sales to rise in 2010 - Nov 18, 09 ONLINE AUDIENCE GROWS IN ASIA PACIFIC SINGAPORE: The size of the internet population in Asia Pacific has increased by 22% over the course of the last year, to 484.2 million people overall, with China and Japan enjoying the most substantial levels of growth in this period, Comscore has estimated.A recent forecast from Carat suggested China and India will be the markets that register the highest upticks in digital adspend in APAC in 2010, with rising web penetration levels one factor encouraging this trend. Based on data from September 2009, Comscore reported that the online audience over 15 years of age in the region expanded from 396.0 million in the same month last year. China posted an improvement of 31%, to 220.8 million web users, in the ninth month of this year, with Japan up by 18%, to 68.3 million, and India by 17%, to 35.8 million. The number of netizens in South Korea also climbed by 10%, to 29.1 million, as did figures for Australia, by 12% to 12.7 million, and Taiwan, by 14%, to 12.1 million. Singapore and New Zealand similarly both registered strong double-digit expansions, to totals of 2.7 million and 2.6 million respectively. This positive trend moderated to 8% in Malaysia, with 9.4 million consumers now active on the net, and 5% in Hong Kong, where the comparative user base stood at 3.9 million. Will Hodgman, Comscore's evp for Asia-Pacific region, said "Asia is not only home to the largest Internet population in the world, but it is also one of the fast-growing." "With most markets in the region experiencing double-digit growth, marketers and advertisers have the opportunity to capitalize on the potential of the online to reach and engage a surging number of people engaging in a variety of consumer activities online." Data sourced from Comscore; additional content by Warc staff, 18 November 2009 Print | Email | Add to Folder Related News StoriesMixed picture for online in Asia Pacific - Nov 23, 09 Reliance tops Indian brand rankings - Nov 23, 09 Advertisers continue to spend in China - Nov 20, 09 NORTH AMERICAN ADSPEND DOMINANCE UNDER THREAT  LONDON/WASHINGTON: North America's position as the world's biggest regional advertising market has come under increasing pressure during the economic downturn, new figures from Warc show.According to the latest data from World Ad Trends, global adspend rose by 0.2% on an annual basis in 2008, to $499 billion (€335bn; £297bn) at constant (2005) prices, with North America taking a 34.1% share, followed by Europe, on 31.3%, and Asia Pacific, on 24.7%. The gap between the figures recorded by North America and Europe, however, closed from $29bn to $13bn, while most of the $10bn that was wiped off spending levels in the former of these two areas was offset by growth in APAC. By country, the US contributed $158.5bn of the worldwide total, although this amounted to a contraction of 10% year-on-year, as the financial crisis forced American marketers to trim their budgets. China was responsible for 11.4% of all expenditure, on $57.1bn, followed by Japan, on $41.9bn, Germany, on $28.6bn, and the UK, on $26.8bn. Together, these five nations generated almost two-thirds of all ad revenues, despite the fact the UK registered a decrease of 6.9% in 2008, with Japan also off by 5.9%, and Germany by 2.9%, in this period. In terms of the fastest-growing markets, India posted an uptick of nearly 16%, while China enjoyed an improvement of 9.9%, as did Brazil, by 7%, and Russia, by a more modest 2%. Taking a look at expenditure per head of population, the US remained top of the pile, but Australia, Austria and Ireland took the next three spots, with the UK following on in fifth. Japan, by contrast, tumbled to 13th position on this measure, while Germany was lower still, coming in at 16th place overall. Warc subscribers can access further provisional details from World Ad Trends here. Full results will be published on Warc in the coming weeks. Data sourced from Warc; additional content by Warc staff, 18 November 2009 Print | Email | Add to Folder Related News StoriesUS, Australia spend most on ads per person - Nov 23, 09 Brands must do more to meet consumer needs - Nov 20, 09 Sponsorship brings mixed results for brands - Nov 17, 09 CONSUMER GOODS SALES TO RISE IN 2010  NEW YORK: Major players in the US consumer goods market should return to growth in 2010, having suffered particularly heavily during the financial crisis, Fitch, the global ratings agency, has predicted.Sales in the personal care and household goods sectors rose every year from 2003 to 2008, but are slowing in 2009 as shoppers rein in their expenditure levels. Standard & Poor's Household and Personal Products Industry Group index, which tracks the share prices of firms in these segments, has also improved by just 6.8% this year, indicating equal caution among investors. More positively, Grace Barnett, a ratings director at Fitch, has now argued that "next year this industry will finally go back to normal, which is to have positive top line growth." Procter & Gamble and Kimberley-Clark were among the manufacturers expected to see their revenues climb by at least 5% in 2010, Barnett said. Alberto Culver, Church & Dwight and Clorox are also likely to post similar expansion rates during this period, she added. Colgate-Palmolive and Avon could also register substantial gains if the current unfavourable currency situation changes, as they derive more than 75% of sales from outside the US. "Those two companies certainly will get the big benefit as it kind of turns around," Barnett suggested. However, the key drivers of growth are still set to be the BRICs, comprised of the rapidly-developing economies of Brazil, Russia, India and China. Based on Fitch's estimates, this group of countries will see GDP levels record an average uptick of 3.7% in 2009 and 6.5% in 2010, with knock-on benefits in terms of consumer spending. Acquisitions may be another way for brand owners to make progress, with Unilever's recent purchase of Sara Lee's personal care arm one recent example of renewed activity in this area. "There will be more people looking at acquisitions, mostly sort of fill-in, and they can certainly support it from their cash flow situation," said Barnett. Alberto Culver and Colgate are in a particularly strong financial position as far as making such moves in the future are concerned, she added. Data sourced from Reuters; additional content by Warc staff, 18 November 2009 Print | Email | Add to Folder Related News StoriesColgate Palmolive targets emerging markets - Nov 20, 09 Unilever plots fresh innovation push - Nov 18, 09 Unilever, P&G turn to interactive ads - Nov 17, 09 LEVI'S, BENETTON ENJOY SUCCESS IN INDIA  BANGALORE: Levi Strauss and United Colors of Benetton are set to be among the first multinational apparel brands to post $100 million (€67.2m; £55.6m) in annual sales in India, a result of more than ten years of activity in the country in each case.According to Technopak, the branded apparel sector in India is worth 40,000 crore rupees ($8.6bn) at present, and has enjoyed double-digit annual growth over the last half-decade. Levi's entered the country in 1994, and has launched a number of successful marketing campaigns since then, such as "Low rise. Dangerously Low", "Live unbuttoned" and "Diva rules". Alongside these initiatives, it has taken a nuanced approach to pricing, and sought to expand its distribution network, so that it is able to make an impact in smaller tier two and tier three cities, as well as the main urban centres. Similarly, the jeanswear specialist has introduced its low-cost Signature range, in an effort to attract consumers with limited disposable income, a move which has helped it gain a 40% share of branded denim sales. "We operate the Signature brand in select markets in the world. It is a key pillar on which the future plans of the company in India are built," according to Shumone Chatterjee, managing director of Levi's Indian operations. Benetton established a presence in India in 1991, having forged an alliance with a local partner, the DCM Group, but while its revenues had only reached $9m in 2004, they are expected to climb to more than ten times that figure by the end of 2009. The company's sales in emerging markets increased by 13% over the first nine months of 2009, with India – where it opened 80 stores in this period – being among the main contributors to this trend. Among its key brands in the rapidly-developing economy are Playlife, the sportswear and leisure label, as well as Sisley, its premium offering. "Benetton has fairly understood the Indian market, possibly because it is one of the first international apparel brands to enter the country," said Pinakiranjan Mishra, national leader, retail and consumer product practice, Ernst & Young India. "The Group has demonstrated this through sharp product pricing and marketing communication that is in tune with consumer perceptions and willingness to pay." Data sourced from Economic Times; additional content by Warc staff , 18 November 2009 Print | Email | Add to Folder Related News StoriesMixed picture for online in Asia Pacific - Nov 23, 09 Reliance tops Indian brand rankings - Nov 23, 09 Online audience grows in Asia Pacific - Nov 18, 09 UNILEVER, P&G TURN TO INTERACTIVE ADS  NEW YORK: Major advertisers such as Unilever, Burger King and Procter & Gamble are making heightened use of interactive TV advertising as they seek to take a targeted approach to connecting with consumers.Unilever, the FMCG giant, has previously run over 40 interactive efforts for a broad range of brands across its portfolio, which includes Knorr, Dove and Hellmann's. One of its most recent offerings was for Axe deodorant, following on from research that found some of its target audience of young men were not sure how best to apply the body spray. The execution featured Adam Jones, a motorcross rider, putting on some Axe in the midst of a motorbike stunt called "Double Pits to Chesty", a description of the way the product should be worn. During the spot, an on-screen message invited viewers to turn over to Channel 115 to "learn the move", as well as to access a range of other relevant material. This included a discussion about the stunt performed by Jones, a virtual game allowing users to recreate it using their remote control, and further information about Axe. According to the consumer goods manufacturer, this feature had a potential audience of 60 million DirecTV and Dish Network households. In a period of a few weeks, it was accessed by 3.5 million of this group, members of which spent an average of five minutes exploring this content. "That kind of engagement with consumers leads to sales," said Rob Master, media director, North America, for Unilever. "It's the digital online experience, but you get it on your big-screen TV. We are very bullish on interactive ads," he added. Other examples of the Anglo-Dutch group's activity in this area include a game for Breyers ice cream, developed for Dish Network households, which challenged players to match up scoops of ice cream and create their own different servings. Procter & Gamble also backed Charmin with an interactive campaign in July this year, based on a tie-up with TiVo, the DVR service. While the commercial for the toilet paper brand was on air, a green thumb was displayed on the right-hand edge of the screen, encouraging viewers to "apply now for a valuable coupon from Charmin." Selecting this icon effectively paused the show the consumer was watching, and took them to a page via which they could request a coupon be sent to them by post, before their programme resumed again. Similarly, Burger King is set to introduce a new interactive spot on DirecTV, as part of its tie-up with the film The Twilight Saga: New Moon. People watching the ad can access a quiz about the movie, based on the novel by Stephanie Meyer, via their remote handset. As previously reported, Cablevision has already rolled out a trial targeted ad service in New York, while Unilever and Gillette, P&G's shaving brand have also signed up to an interactive system introduced by the company. Comcast reported that interactive advertising delivered $15 million (€10.0m; £9.0m) of revenues in the last quarter, and estimated that half of its 24 million subscribers will be able to receive this form of communications in the near future. The cable operator is also said to be in talks to acquire NBC Universal from General Electric, a tie-up which analysts suggest could speed up the development of addressable advertising. Stephen Burke, Comcast's coo, has also argued that "the big number will be generated when the industry gets together and allows a national advertiser the ability to advertise across the country." Data sourced from Wall Street Journal; additional content by Warc staff, 17 November 2009 Print | Email | Add to Folder Related News StoriesColgate Palmolive targets emerging markets - Nov 20, 09 Danone sees "profound" change in consumers - Nov 20, 09 Consumer goods sales to rise in 2010 - Nov 18, 09 ONLINE ADSPEND SET FOR GROWTH IN EUROPE LONDON: Online adspend will continue to rise in Europe over the next two years, as marketers increasingly divert funds away from traditional media and towards the web, a new study by the European Interactive Advertising Association predicts.The organisation conducted a survey among senior marketing executives in Belgium, France, Germany, Italy, Netherlands, Norway, Spain, Sweden and the UK. According to its figures, 83% of this sample have increased their internet advertising expenditure during 2009 to date, while 94% plan to do so in 2010, as do 93% in 2011. Participants in the organisation's Marketer's Internet Ad Barometer also forecast the medium's revenue levels will rise by 7.6% next year, and a further 15% over the following 12 months. More than eight in ten of this group stated they were "satisfied" with the performance of the web as an advertising tool, when this term was defined as indicating they gave it an approval rating of 60% or more. With regard to media planning, 36% had heightened their scheduled online activity in the second half of this year – up from 28% in the first half – while 31% said value for money was the main motivation for boosting their output in this area. Some 30% of respondents that had raised their internet adspend had withdrawn these resources from other direct marketing initiatives, while 36% had transferred budgets from TV to the web. This total reached 59% among bigger companies, with 47% of firms in this group also making more use of new technology such as targeted advertising. More broadly, 61% of contributors were placing more emphasis on email marketing, a figure that stood at 33% for behavioural targeting, 31% for ad networks, and 36% for affiliate marketing. A third of organisations are also currently employing mobile advertising as part of their communications mix, while 19% reported they are now making more use of this emerging platform. Over 80% of the panel thought that mobile adspend had improved this year, and 97% expected this trend to continue over the period to 2011. Moreover, the EIAA found that 33% of marketers have turned with greater frequency to online video, while 20% said this growth was being funded by resources previously allocated to other forms of media. Data sourced from EIAA; additional content by Warc staff, 17 November 2009 Print | Email | Add to Folder Related News StoriesUS, Australia spend most on ads per person - Nov 23, 09 Brands must do more to meet consumer needs - Nov 20, 09 Smartphone use rises in UK - Nov 19, 09 SPONSORSHIP BRINGS MIXED RESULTS FOR BRANDS  MONTREÁL: Many sponsorship opportunities do not currently meet the needs of brands which partner with organisations and events in an effort to engage with their target audience, according to research from Sponsorium.The Montréal-based firm, which offers sponsorship management tools and has worked with clients including Pepsi, BMW and Heinz, released a new report – more details of which are available here – discussing whether sponsorship deals are delivering on marketers' objectives. It analysed client data covering 61 brands, 35 countries and 10,000 sponsorship opportunities available around the world between January 2008 and June 2009. Each initiative received a rating out of 1,000 points, based on metrics such as brand image, target groups, leverage, contract profile, included advertising, event profile, visibility and audience. Overall, the study found there was a broad spectrum of scores, ranging from an average of 769 points for the top 10% through to just 117 points for the bottom such group. The global average of 448 points, however, indicated that less than 45% of brands' targets in undertaking such initiatives are being achieved at present. Mark Cornish, head of marketing at Sponsorium, said "at its best, the top 10% of sponsorship opportunities meet 76.9% of criteria." "And increasingly, those who are successful at meeting the needs of brands are steering away from the standard rights package, or buyer–seller relationship, and are adopting a more flexible and customised approach". Sponsorium also found that the average recorded rights fees over the period surveyed stood at $75,000 (€50,113; £44,843). However, within that period, fees fell by a full 50%, from $90,000 in 2008 to $45,000 in the first half of 2009, indicating the full impact of the global financial crisis and ensuing recession. Warc subscribers can view more data from Sponsorium's analysis here. Data sourced from Sponsorium; additional content by Warc staff, 17 November 2009 Print | Email | Add to Folder Related News StoriesUS, Australia spend most on ads per person - Nov 23, 09 Brands must do more to meet consumer needs - Nov 20, 09 North American adspend dominance under threat - Nov 18, 09 CHINESE CONSUMERS CONTINUE TO SPEND BEIJING: Consumer spending levels in China have recorded a double-digit improvement over the course of this year to date, but considerable room for growth still remains for brands in a variety of different sectors.Retail sales increased by 15.3% in real terms in the world's most populous nation during the period from January to October, an uptick of 2% on the expansion registered over the previous nine months. Even categories facing considerable challenges in the US and Western Europe have enjoyed growth in the rapidly-developing market, with, for example, sales of passenger cars leaping 76% in China in October. However, consumer spending accounted for just 35% of Chinese GDP last year, compared with 46% in 2000, while the savings rate for disposable income also stood at 28% in 2008, and these trends remain influential. "The consumer revolution already has been happening, but it could be much, much better," argued Yuwa Hedrick-Wong, a specialist advisor to MasterCard Worldwide. Recent figures from Nielsen have shown that confidence levels in the Asian economy are rising, with 57% of people categorising their employment prospects for the 12 months as being "excellent." Mitch Barns, president of Nielsen Greater China, said that, in July, the popular perception of the financial climate was that the economy was "on the road to recovery", and this optimism has continued to grow. "Consumers are gradually feeling more comfortable with their situation and feel that the economy is moving in the right direction," he added. The research firm further suggested that product launches and original goods can be expected to enjoy a considerable advantage among shoppers. "Companies that focus on innovation and introducing new products to the market will be the ones to drive consumption throughout China," said Barns. More specifically, it appears wealthy consumers are spending a smaller share of their income compared with their less well-off counterparts. Athar Hussain, director of the Asia Research Center at the London School of Economics, said "the poorer people tend to consume higher proportions of their income than richer people." "So if China shifts the distribution of income in favour of lower-income groups, consumption will increase," he concluded. Data sourced from China Daily/Time; additional content by Warc staff, 17 November 2009 Print | Email | Add to Folder Related News StoriesMixed picture for online in Asia Pacific - Nov 23, 09 Advertisers continue to spend in China - Nov 20, 09 China poses challenges to luxury brands - Nov 19, 09 AGENCIES STRUGGLE TO ATTRACT NEW BUSINESS  CINCINNATI: A majority of advertising agencies in the US believe it is much harder to secure new business in the financial crisis, but few have diversified their approach in an effort to overcome this problem, according to a study by RSW/US and Second Wind.A total of 212 agencies took part in a poll conducted by the two organisations, with some 40% of this group arguing that obtaining new business is "harder" at present than in 2008, a figure that fell to 25% for those stating it is "a lot harder". Some 24% suggested conditions were largely unchanged, while 10% of participants thought attracting briefs was now easier, but only 1% suggested it was "a lot easier". The main challenges in this area included the fact there are fewer available opportunities, mentioned by 57% of the panel, while 46% felt it was now "harder to break through to prospects". More specific to agencies, 18% of the sample reported that they "can't make the investment in a new business programme", while 17% had "less time" to spend on this activity. In terms of collecting fresh chores from advertisers, 68% of shops identified referrals as being in their top three sources, compared with 61% citing further billings from existing clients, and 54% who elicited such revenues via networking. In 24% of cases, "clients switching to new companies" played such a role, with cold calls on 20%, speaking engagements on 15%, organic search on 9%, email campaigns on 7%, social media contacts on 6%, conferences on 5%, while paid search posted a score of zero. Just over 40% of respondents had hired a new business manager at some point over the last three years to try and generate leads, but only 16% described their results as being "very successful." In all, 22% of agencies "never" used social media as a tool to prospect for clients, while just 3% said they "often" did so. When rating themselves on this measure, 17% of those companies taking part in the survey awarded themselves a score of two out of ten, with 14% raising this figure to five, 10% to seven, and 1% to nine. Almost three-quarters of agencies had an account on LinkedIn, while 67% had established a presence on Facebook, as had 57% on Twitter, while 56% also boasted a corporate blog. Some 56% of contributors most frequently employed LinkedIn to try and attract prospective accounts, with 16% using blogs for this purpose, comparisons that stood at 13% for Facebook and 9% for Twitter. Almost a third of participants updated their LinkedIn page around once a week, compared with 28% that never did so, 18% posting new information once a month, 10% less often than this, 7% once a day, and 6% at least twice every 24 hours. With regard to Facebook, 35% "never" modified their official page on the site, with a quarter engaging in this activity on a weekly basis, 13% monthly, 11% daily, and 7% more than five times a week. Just 12% of agencies "tweeted" at least twice a day, with 11% adding one comment a day, 18% doing so once a week, and 5% once a month, while 47% "never" left material on the microblogging portal. This latter total stood at 45% for blogging, falling to 28% when it came to issuing weekly updates, 16% for monthly additions, 5% for both daily and highly infrequent activity, and just 1% for more than one entry a day. Data sourced from AdWeek, RSW/US; additional content by Warc staff, 17 November 2009 Print | Email | Add to Folder Related News StoriesIPG posts revenue decline - Oct 29, 09 Havas sees revenues fall - Oct 23, 09 Omnicom profits fall in Q3 - Oct 22, 09 DOMINO'S TARGETS INDIA BANGALORE: Domino's, the fast food specialist, is aiming to heighten its presence in India, and is placing a particular emphasis on affordability and customer service, which it argues are of specific importance in the fast-growing market.Domino's launched in the Asian nation in 1995, and now operates a total of 274 outlets in 55 cities across 20 regions in the country. The Food Franchising Report 2009, produced by the Confederation of Indian Food Trade and Industry, stated that the US firm currently holds a 65% share of the Indian home-delivery pizza market. However, Technopak had also estimated that just 2% of monthly expenditure on takeaways and other similar such purchases in the developing economy is currently taken by pizza and pasta. While this figure is low, Domino's has enjoyed growth of more than 100% in each of the last two years, with like-for-like totals rising by 16% on an annual basis over this timeframe. Dev Amritesh, vice president of marketing for the company's Indian operations, said it has "constantly focused on consumer-centric areas such as product innovation, taste, pricing and customer service." He further suggested that the launch of a wide variety of dining options had helped boost the appeal of its menu in a relatively short period of time. More broadly, the substantial changes taking place within Indian society itself have been key contributors to Domino's success, according to Amritesh. These include rising income levels, especially among young consumers, as well as the rapid expansion in the size of the middle class, and the notable increase in the number of women now pursuing full-time careers. "With global exposure and changing demographics, Indian consumers are not very different in terms of their expectations from service brands," added Amritesh. Two major areas where the company has strived to be highly competitive are service and price, both of which are becoming essential elements for success in the country. Its initiatives have included a 30-minute delivery promise, and the Pizza Mania promotion, offering a pizza or Fun Meal for four people for just 35 rupees. Schemes such as Pizza Mania have "helped us drive value-for-money proposition allowing access to the brand," Amritesh argued. "In India, for a brand that has aspiration to cut across consumer segments, affordability is critical. That said, it is still one of the aspects of brand building, not the most important tool to create a strong brand," he concluded. Data sourced from Economic Times; additional content by Warc staff, 17 November 2009 Print | Email | Add to Folder Related News StoriesMixed picture for online in Asia Pacific - Nov 23, 09 Reliance tops Indian brand rankings - Nov 23, 09 Levi's, Benetton enjoy success in India - Nov 18, 09 MAJOR ADVERTISERS TURN TO UMBRELLA BRANDING  LONDON: Major advertisers including Unilever, Heinz and Sony are all placing an increased emphasis on umbrella branding as part of their communications strategies, as they seek to emphasise values going beyond individual products or services.Heinz, the food manufacturer, has recently launched a £5 million ($8.3m €5.6m) marketing campaign in the UK based around the tagline "It has to be Heinz", with its ads featuring a number of its goods. These include Tomato Ketchup, Beanz, Salad Cream, Spaghetti Hoops and Cream of Tomato Soup, with the hope that this approach will have knock-on benefits across its portfolio. Giles Jepson, its marketing director for sauces and soup, said "by focusing on our umbrella brand, we are able to give all of our products central focus on advertising and not rely on trade promotions in stores." "The Heinz brand is greatly cherished by the British people … We wanted to remind them of our core products and maintain that relationship through this umbrella branding approach," he added. Tesco, the British retailer, has expanded its operations from focusing on grocery to areas like mobile phones and financial services, but has retained a consistency of tone and content when speaking to current and potential customers. "Our brand is centred around the quality and service customers want and have come to expect from Tesco," said Richard Brasher, its commercial director. "We use this brand on own-label goods because it is our way of extending that trust and helping our customers have it all in an uncertain world." In a similar fashion, Sony has sought to adopt a more unified message across its range of mobile phones, games, films and consumer electronics, in the form of the proposition "make.believe". Matt Coombe, its general marketing manager in the UK, said "everything we do now runs under a common identity; people know Sony and they believe the brand values of the master brand." Rather than its previous "fragmented and disparate" model, this initiative means consumers "feel reassured about what they are buying. The umbrella branding gives us a meaning, not just a logo," according to Coombe. Unilever has also started to feature its logo in all of its advertising, as part of an effort to raise awareness of its corporate brand, having announced an intention to follow this path earlier this year. Paul Nevett, the Anglo-Dutch group's vp of marketing, foods and ice cream in the UK and Ireland, said the FMCG giant wanted to "replicate" the company's "internal pride" with shoppers. As part of this process, the owner of Knorr and Axe has conducted regular surveys asking consumers to name the top parent brands in the CPG category, finding that it has moved from fourth to first on this measure since the start of its umbrella campaign. "The Unilever logo is now a mark of quality through its greater presence, which reassures consumers. They can relate to it and look for it, creating a 'halo effect' for all our portfolio of brands," Nevett added. By contrast, Coca-Cola is one example of an organisation that is continuing to employ highly distinctive ads for each of its brands, something it argues is required by the variety of products it sells. "There is not much natural cross-over. So it makes commercial sense for us to focus our efforts largely on our individual brands and leverage our assets where there are opportunities to do so," Cathryn Sleight, its UK and Ireland marketing director, said. Similarly, Stephen McGill, UK marketing director for Microsoft's Xbox, expressed reservations about how effective an overarching programme would be for the games console. "Just being part of Microsoft isn't sufficient for us. We want the Xbox brand to stand out in its own right. What we emphasise in ads is not that we are a Microsoft games console, but a console that can be relied on for innovation and solid research and development," he said. Data sourced from Marketing Magazine; additional content by Warc staff, 16 November 2009 Print | Email | Add to Folder Related News Stories"Augmented reality" attracts big advertisers - Nov 23, 09 Danone sees "profound" change in consumers - Nov 20, 09 Coke turns to social media - Nov 19, 09 INNOVATION SURVIVES THE DOWNTURN IN US AND UK  NEW YORK: Innovation remains a major priority for companies in sectors ranging from consumer goods to the automotive industry, despite the on-going pressures of the financial crisis, according to a study undertaken by Accenture in the US and the UK.The consultancy interviewed 630 executives in these two countries, and found that 32% of respondents regarded innovation as being more important during the downturn, compared with 11% arguing the opposite, and 57% that saw its prominence as being unchanged. Some 48% of the sample said their expenditure levels in this area had increased in the last six months, while 28% reported they had been given more resources to foster "large innovations or new ventures" over this period. A third of participants had seen no change to the funding dedicated to this aspect of their activity, while 19% had seen budgets fall. In terms of responsibility for driving innovation, 45% of business leaders said this process was part of the brief for their research and development operations, while 29% had established a formal innovation unit. By contrast, in 16% of cases there was no single department designated with this task, while marketing took on such a position 10% of the time. Almost 40% of contributors saw the primary role of innovation as being to help them perform ahead of their rivals, meaning that they "constantly renovate" around their "core activities". Moreover, 25% agreed with the statement that "we intend to transform our business in the next three to five years, primarily with innovations." However, just 3% regularly introduced new products or services in order to "satisfy customers and be competitive." This was despite the fact that 52% of firms regarded their most successful innovation over the last two years as taking the form of an original product of service, rising to 68% in the consumer goods sector. New processes and business models were accorded such a status by 31% of those polled, a figure that fell to 17% when it came to improving an existing offering. A third of Accenture's cohort also argued that their organisation was "looking for the next silver bullet" rather than pursuing a broad range of proposals. More specifically, 53% stated that the main goal of innovation was to increase share in existing markets – rising to 70% for automotive brands – while 49% wanted to add value to a current product. Four in ten were hoping to enter new markets or product categories, while 30% were seeking to "disrupt" their segment via a new "process or model", reaching a high of 42% for consumer goods and services. In identifying why NPD launches had not been successful in the past, incorrect pricing was cited as a central factor in 35% of cases, followed by inadequately meeting customer needs, on 34%, and being late to market, on 33%. A failure to deliver a unique value proposition also played a key role, according to 27% of people, as did unsuccessful forecasts. During the next two years, the main challenges in this field were seen to be predicting future trends, on 42%, with reducing time to market, on 34%, and leveraging new technology, securing funding and identifying change customer behaviour all, on 32%. Overall, Accenture said, "what distinguishes successful innovators is not the level of spending per se, but rather the way in which they manage innovation with rigor, structure, repeatable processes, and an ROI mentality." Data sourced from Accenture; additional content by Warc staff, 16 November 2009 Print | Email | Add to Folder Related News StoriesColgate Palmolive targets emerging markets - Nov 20, 09 Danone sees "profound" change in consumers - Nov 20, 09 Consumer goods sales to rise in 2010 - Nov 18, 09 CHINA AND INDIA SET FOR DIGITAL GROWTH BEIJING: China and India will be among the markets which deliver the highest levels of digital adspend growth in Asia Pacific next year, Carat, the media agency network, has predicted. According to the company, total advertising expenditure will be flat in Japan in 2010, at $48.3 billion (€32.5bn; £28.9bn), with China up by 7.9%, to $47.9bn, and Australia, the region's third-biggest market, largely static, at $10.6bn. South Korea will generate growth of 5.8%, to $5.7bn, in the same period, with the Philippines recording an expansion of 9.7%, to $5.3bn, and India by 5.2%, to $4.3bn. However, Indonesia is said be the fastest-growing nation on this measure, up by 16.4%, to $3.5bn, while New Zealand will be the only country to see a decline, down by 1.1%, to $1.1bn. By medium, television ad revenues are set to increase by 12% across the region as a whole, giving it a market share of 52% in all. Newspapers will also register an improvement of 2.4%, to a share of 20%, while magazines will grow by 0.3%, taking 5.3% of all spending as a result. Outdoor will receive 8.5% of marketing budgets, with digital formats helping drive growth in the out-of-home segment, but radio and cinema will be responsible for a combined total of just 3.2%. This will compare with the 11% share enjoyed by online, with ad sales through this channel climbing by 26% in India, 25% in China, and 20% in Thailand and Hong Kong, over the course of next year as a whole. Across the 13 markets assessed, total spending will reach $136.9bn, up 4.1% on an annual basis, with media costs also set to rise by 4% year-on-year in the same timeframe. Excluding Japan, which has suffered particularly heavily during the financial crisis, this latter figure is likely to be within the 8% to 10% range, Carat said. The media agency further predicted that television ad rates will rise by 5% in Asia Pacific in 2010, compared with an uptick of 3% for print, 4% for outdoor, and 5% for the web. By country, Indonesia will see prices surge by 13%, with India up by 12%, China by 10%, and the Philippines by 9%. At the other end of the spectrum, Japan will record a contraction of 3%, with New Zealand also off by 5% year-on-year. Data sourced from Exchange4Media; additional content by Warc staff, 16 November 2009 Print | Email | Add to Folder Related News StoriesReliance tops Indian brand rankings - Nov 23, 09 Advertisers continue to spend in China - Nov 20, 09 China poses challenges to luxury brands - Nov 19, 09 MCDONALD'S REVEALS EXPANSION PLANS  OAK BROOK, Illinois: McDonald's, the fast-food giant, is planning to launch a number of new products and open around 1,000 outlets worldwide next year, as it aims to strengthen its position both during and after the downturn.While many restaurant chains have seen sales levels fall since the onset of the financial crisis, McDonald's has registered an increase in traffic numbers, as diners look for cheaper ways to eat out. Don Thompson, president of McDonald's USA, said consumers are now "much more selective. They're staying in more and spending less. Even with this newfound frugality, they have high expectations." Over the course of 2010, the company will invest $2.4 billion (€2.1bn; £1.4bn) in further developing its global operations, with much of this funding being earmarked either for opening hundreds of new stores, or redesigning 2,300 existing ones. Further initiatives in this period could include possibly raising prices, and adding a number of more premium items to its menus. Peter Bensen, the Oak Brook-based organisation's chief financial officer, said these activities were "as much about changing the perception of our brand in the consumer's mind that allows us to stretch both the price and products you can serve in a re-imaged restaurant." While McDonald's Dollar Menu has been one of the key drivers of its recent success, the quick service pioneer has also started to sell a range of more specialist coffees, and launched the Angus Burger, in 2009, backing these efforts with prominent ad campaigns. Similarly, it is in the early stages of rolling out the Mac Snack Wrap, a tortilla version of its Big Mac hamburger, and is now offering a variety of new salads and desserts, with further plans to introduce smoothies and frappes by mid-2010. Jim Skinner, McDonald's chief executive, argued that, as a consequence of these collective actions, the franchise-based firm would be well-positioned when the financial climate finally begins to improve. "When you look at our performance over the last six-and-a-half years, going into 2008, before we had a declared recession, we did extraordinarily well," he said. "People are trading in to McDonald's, not trading down to McDonald's. We expect, because of the investment we made during the downturn, that we will come out the other end in better shape." Data sourced from Wall Street Journal; additional content by Warc staff, 16 November 2009 Print | Email | Add to Folder Related News Stories"Augmented reality" attracts big advertisers - Nov 23, 09 McDonald's has high hopes for India - Oct 5, 09 McDonald's focusing on value in India - Sep 28, 09 COCA-COLA TARGETS BRAZIL RIO DE JANEIRO: Coca-Cola, the US soft drinks giant, is set to invest some $5.8 billion (€3.9bn; £3.5bn) in Brazil over the five years to 2014, as it tries to enhance its presence in what is regarded as a key future growth market.The American company has been highly active in rapidly-developing economies like India and China in the recent past, and has outlined plans to direct considerable resources to these areas going forward. In a similar vein, it will now increase its outlay in Brazil by some 75% when compared with the total of $3.3bn which it allocated to the South American country over the period from 2005 to 2009. Muhtar Kent, president/ceo of Coca-Cola, said "Brazil is one of the biggest markets for Coca Cola in the world. In the last 25 years we saw the volume of our sales in Brazil expand by about 50 times." The multinational firm's other current objectives in Latin America include launching a new brand, Matte Granel Organico, an organic tea that is argued to be the first product of its kind in the region. Brazil will host the FIFA World Cup in 2014, and the Olympic Games in 2016, and these events are expected to encourage large numbers of companies to heighten their activity in the BRIC nation. Data sourced from Reuters; additional content by Warc staff, 16 November 2009 Print | Email | Add to Folder Related News Stories"Augmented reality" attracts big advertisers - Nov 23, 09 Coke turns to social media - Nov 19, 09 Coke sets out ambitious growth plans - Nov 18, 09 BRANDED GOODS GAINING GROUND IN RURAL INDIA KOLKATA: Branded goods are growing in popularity among rural consumers in India, a trend that is set to continue over the next few years as demand levels surge in the fast-growing economy, a report from the Confederation of Indian Industries and Technopak has estimated.Hindustan Unilever, the local arm of the Anglo-Dutch giant, is one of a number of companies to have stated an intention to heighten its focus on this demographic in the Asian nation. Procter & Gamble has also announced that it is hoping to add 500 million people to its customer base in the country, with rural shoppers expected to contribute a large percentage of this total. Spending levels in this portion of the Indian market improved by 25% last year, CII and Technopak found, and will climb to a total of $425 billion (€286bn; £255bn) by 2011, when this cohort will contain between 720 million and 790 million members. The two organisations further estimate that, at present, members of such communities spend around 35% of their income on food, and 13% on fast-moving consumer goods. Over the course of 2009, FMCG sales among this audience are also set to grow by 23%, with durables up by 15%, and telecoms by 13%, their white paper added. More specifically, manufacturers in the fast-moving consumer goods sector were argued to be among the main beneficiaries of a long-term shift at work in the rapidly-developing economy. "The knowledge that branded goods offer better quality is visible. Established 'upmarket' products of brands like P&G, HUL, Nirma, ITC have found a loyal customer base as opposed to the situation about 20 years back, when they were highly sensitive to price and perceived value," CII and Technopak said. Among the main reasons cited for this trend were the increasing number of graduates living in rural areas, and rising media penetration rates, exposing consumers to more advertising and branded goods. Other companies that have sought to take a nuanced approach in the rural market to date include Philips, which developed a low-cost stove, and LG, which introduced a heavily-discounted television set that was able to pick up low-density signals. Adidas and Reebok, the sportswear specialists, also both boosted their sales by as much as 50% in this setting as a result of cutting their prices to suit the needs of this sub-set of consumers. Data sourced from Business Standard/Economic Times; additional content by Warc staff, 16 November 2009 Print | Email | Add to Folder Related News StoriesMixed picture for online in Asia Pacific - Nov 23, 09 Reliance tops Indian brand rankings - Nov 23, 09 Levi's, Benetton enjoy success in India - Nov 18, 09 | HeadlinesNovember 20, 2009Ford, Starbucks gain from digital media Brands must do more to meet consumer needs Advertisers continue to spend in China Danone sees "profound" change in consumers Colgate Palmolive targets emerging markets Mobile social network use rises in APAC  November 19, 2009 US giants failing on Twitter Sony plans to "reinvent" marketing strategy Coke turns to social media Smartphone use rises in UK China poses challenges to luxury brands Aegis sees revenues slide November 18, 2009 Coke sets out ambitious growth plans Unilever plots fresh innovation push Online audience grows in Asia Pacific North American adspend dominance under threat Consumer goods sales to rise in 2010 Levi's, Benetton enjoy success in India November 17, 2009 Unilever, P&G turn to interactive ads Online adspend set for growth in Europe Sponsorship brings mixed results for brands Chinese consumers continue to spend Agencies struggle to attract new business Domino's targets India November 16, 2009 Major advertisers turn to umbrella branding Innovation survives the downturn in US and UK China and India set for digital growth McDonald's reveals expansion plans Coca-Cola targets Brazil Branded goods gaining ground in rural India |
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