THE DEFINITIVE, EVIDENCE-BASED and PRACTICAL GUIDE for YOUR MARKETING PLANS What Does 2020 About This Have in Store? Report

The2020 Marketer’s Toolkit

THE DEFINITIVE, EVIDENCE-BASED AND PRACTICAL GUIDE FOR YOUR MARKETING PLANS What does 2020 About this have in store? report

As marketers finalise their plans The Marketer’s Toolkit 2020 is not This is the ninth annual Marketer’s Toolkit from WARC – but for 2020 we have for the year ahead, WARC has just another end-of year review introduced a new methodology. pulled together a comprehensive guide of what to expect, and what The report is built on three inputs: This report adopts the STEIP methodology developed by WARC’s sister you can do about it. brands within the Ascential group of companies. • A survey of nearly 800 client Welcome to the Marketer’s and agency-side executives STEIP covers five drivers of change that will affect marketers next year: Toolkit 2020. around the world, following Society, Technology, Economy, Industry and Policy. By combining these five our STEIP ‘drivers of change’ focus areas, the report provides a bottom-up assessment of the influences There’s certainly plenty to plan methodology; on 2020 marketing strategy. for. 2020 will be the year many • Interviews with 10 CMOs from marketers around the world take around the world; action to reverse the drift to • Our own analysis of the short-termism, while the ‘walled research, best practice and gardens’ strengthen their grip on case studies we’ve published S T E I P performance marketing spend. on WARC in 2019. SOCIETY TECHNOLOGY ECONOMY INDUSTRY POLICY It’ll be a year when brands review As such, the Marketer’s Toolkit is the environmental impact of their a guide to which near-term trends packaging, and when regulators your peers are prioritising, and and consumers combine to what you can do to keep ahead of demand more on data privacy. the market.

And it’ll be a year when the big This document summarises the The Marketer’s Toolkit 2020 was created in association with the following tech stories won’t just be the data and the thinking. WARC Ascential brands: latest gadgets, but the reshaping subscribers can read a full data of ad tech around context and report plus five in-depth chapters connected TV. at warc.com/toolkit. Society Brand purpose is evolving into brand activism – the vast majority of respondents in WARC’s Marketer’s Toolkit agree that it is important to ‘take a stand’ on social issues.

There are two stand-out trends that brands are responding to. The growing concern around consumer privacy online is expected to have a broad impact on marketing strategies in 2020, and that trend will be accelerated in The drivers some markets by regulatory action.

altering consumer The second trend is the ongoing rise of conscious consumerism, after behaviour and environmental issues came to the fore in 2020. Brands are likely to accelerate their response to this trend, with preferences particular focus on packaging and the supply chain.

data 40%

Marketers believe they need to take a stand 37% Brands need to take a 28% stand on social issues The evolution of ‘brand purpose’ into ‘brand 19% activism’ is clear in the WARC Marketer’s Toolkit survey. There is a widespread belief among 6% marketers that brands have a powerful role to play in society – more than 75% of marketers agree that brands need to take a stand on social issues. The stand-out example so far has been Nike’s work with Colin Kaepernick.

The movement towards activism may reflect 13% a struggle by many to have a cultural impact STRONGLY DISAGREE through more traditional means. Almost half of 34% DISAGREE the responding marketers agreed that it is harder In the current climate it for brands to influence culture at scale in the NEUTRAL is harder for brands to current climate. influence culture at scale AGREE

STRONGLY AGREE © Copyright WARC 2019. All rights reserved. 13% 13% How great is the impact of each of the following societal topics and consumer concerns on your / your typical client’s 2020 marketing strategy? PRIVACY, CONSUMER PRIVACY, NOT IMPORTANT DATA: INTERNETCONTROL, ETHICAL CONSCIOUS ENVIRONMENT: CONSUMPTION AND SUSTAINABILITY ECONOMY ATTENTION LOW DIVERSITY AND INCLUSIVITY HEALTH, WELLNESS: MENTAL SELF-CARE, BURNOUT & STRESS URBANISATION CHANGING SOCIAL MEDIA CHANGING SOCIAL DETOXING, HABITS: DIGITAL BACKLASH INFLUNCER POPULATION AGEING RISE OF THE SUBSCRIPTION ECONOMY QUITE IMPORTANT

VERY IMPORTANT 13% 16% 17% 18% 21% 27% SOURCE: WARC Marketer’s Toolkit 2020 survey 33% 35% 46%

41% Brands are responding to privacy 45% 44% concerns 46% 50% 46% Data privacy concerns are expected to have the greatest impact on marketing 46% strategies globally in 2020, as consumers 46% take a more active role in managing their data and auditing who has access to it. 40% Growing consumer concern about use of their data is dovetailing with enhanced privacy regulation (see Policy chapter) to 46% make this a powerful theme for 2020. 39% 39% 35% 29% 27% 21% © Copyright WARC 2019. All rights reserved. 19% 14% SOURCE: WARC Marketer’s Toolkit 2020 survey

Environmental CHANGES IN CULTURE CORPORATE AND PROCESSES concern is 57% In which areas is your driving conscious brand / are your typical clients addressing consumerism CHANGES IN MEDIA AND COMMUNICATIONS environmental concerns? CHANGES IN PACKAGING 47% 46% CHANGES IN PRODUCT CHANGES IN PRODUCT CHAIN AND SUPPLY

The rise of conscious consumerism, 41% accelerated by high-profile campaigners such as Greta Thunberg and Extinction Rebellion, will also be a widespread theme for 2020.

A slew of surveys in 2019 has suggested CHANGES IN DISTRIBUTION AND DELIVERY consumers will reward brands that take 26% positive steps on the environment, and brands are getting the message. The survey data for this year’s Marketer’s Toolkit showed that 84% of respondents said conscious consumerism and sustainability would have significant or some impact on marketing strategy in OTHER 2020. The numbers were notably higher DON’T KNOW in Europe (48% said it would have a 8% CURRENTLY WE’RE NOT DOING ANYTHING significant impact, versus 31% in both North America and Asia). 4% 4%

© Copyright WARC 2019. All rights reserved. Brands are auditing their Marketers are assessing has been trying to respond to packaging and looking their supply chains and criticism of the environmental to eliminate single-use implementing recycling- impact of its annual Singles plastic by-design Day e-commerce event. Initiatives in 2019 included the creation of 75,000 permanent Packaging, particularly use Supply chains (cited by 41% recycling stations nationally to of plastic, is a 2020 focus for of respondents to the WARC recycle cardboard and reduce nearly half of respondents to survey) will also be a 2020 the impact of consumption. the Marketer’s Toolkit survey, focus, particularly with carbon as brands look for ways to act emissions and recycling in Brands need more than on environmental concern. mind. H&M Group, the fashion purpose to ‘take a stand’ company, is looking to have a successfully In depth: For example, UK supermarket climate-neutral supply chain, chain Tesco is planning to extending through many of its remove one billion pieces of suppliers, by 2030. Given the growing consumer the Greta plastic from the products it interest in environmental sells in-store by the end of next All H&M stores around the issues, brands may be tempted year as part of its 4Rs strategy world encourage customers to double down on ‘purpose’ effect (remove, reduce, reuse or to bring unwanted garments communications. recycle). and textiles for recycling, re- wear or reuse. Customers There is risk here. A recent WARC subscribers can go deeper into the Greta effect in the Society spin-off report of The focus on packaging can use the in-store garment Edelman survey showed Marketer’s Toolkit 2020 extends to a review of the way collecting scheme to return more than half of consumers products are sold. Procter garments from any brand, thought purpose was merely & Gamble has introduced in any condition. Offering a marketing ploy rather than a packaging concept such a service is not evidence of any genuine specifically designed to reduce enough; brands may need to conviction. The same study e-commerce packaging. The incentivise customers to use pointed out that trust in a brand company is also looking at it – for example, customers is not enough. It is only when ‘refills’: it now offers some are rewarded for sustainable the three elements of product, Olay face-cream jars with refill behaviour with 10% off their customer experience and pouches on the brand website next purchase. purpose are combined that for its beauty products. brands really start to reap the This pressure is also being benefits. felt by online retail. Alibaba © Copyright WARC 2019. All rights reserved. CMO comments “ We focus on community impact, things like safe drinking water, disaster relief, gender equality, diversity and inclusion, and sustainability. Those are our pillars. Then what we do is we ask each brand to think about, ‘What is your ambition to be a force for good and a force for growth in any one of those areas that fits with your brand?’ Marc Pritchard

“ CHIEF BRAND OFFICER, PROCTER & GAMBLE “ Taking a stand is important but I think As a global company, we are ensuring that’s separate… Issues like plastics in that we’re addressing environmental packaging, food waste, or nutrition in issues that have to do with the mass food transcend businesses and brands. tourism and over-tourism that we’re They are things that companies should seeing in different parts of the world. be doing in a broad sense irrespective Particularly in Asia, you go to different of their brand purpose – because they’re places and all you can see in the water is critical not only from a consumer point of plastic. view but from an investment point of view. Gabriel Garcia Steve Challouma GLOBAL HEAD MOBILE APPS MARKETING / MARKETING DIRECTOR, BIRD’S EYE HEAD OF MARKETING APAC, EXPEDIA GROUP

Falling behind the Taking a short-term Ignoring the intention- retailers approach behaviour gap

Retailers are looking hard at It’s tempting to jump on the One of the biggest challenges packaging, particularly in the bandwagon and support a in the sustainability space is the grocery sector. Packaged noble cause. But environmental gap between what consumers goods, food and drinks brands concerns are so high-profile now say they want and what they should take care to be one step that empty promises or half- actually do. Brands may find ahead of efforts by retailers hearted initiatives won’t cut it – they need to incentivise to respond to conscious and there is evidence consumers different behaviour. Consider consumerism – for example, by are suspicious of brands making using behavioural economic demanding less use of plastic big claims about their green techniques that can help remove in the brands they list. This credentials. Responding credibly barriers to behavioural change. pressure is also being felt by to the climate crisis requires Try to make sustainable products online retailers, who are starting a long-term and considered as desirable, affordable and to look at the packaging involved strategy, not a rush to short- convenient as non-sustainable in shipping. term communications around alternatives. ‘purpose’.

Carlsberg, the beer should be positioned as brand, invented ‘snap enhancing the brand, not packs’, which use as a necessary evil. a recyclable glue to connect cans of beer Carlsberg identified the instead of using the most receptive audience – standard unrecyclable the ones most passionate about environmental plastic rings. concerns – who embraced the new packaging To market the new packs, first, and built out from Carlsberg focused on there. With both soft and functional messaging hard metrics showing it showing how to ‘snap’ catching on, Carlsberg an individual can off from is expanding distribution the rest of the pack, but and it’s also developing a also made sure it had paper beer bottle. emotional appeal too. Carlsberg treated the packaging innovation as a product benefit; sustainable packaging Case study Case © Copyright WARC 2019. All rights reserved. Think about 2016 – the with causes and concerns brands can step in. year of the Brexit vote that both fit with their in the UK and the US brands and attract post- Where government presidential election trust consumers. It’s why has let us down, that landed Donald we see retailers like Dick’s brands might pick Sporting Goods banning Trump in office us up the sale of assault rifles in the US in the absence of It was the year that created government action, and Case in point: the our post-truth society – a why a brand like start-up June 2018 unveiling of landscape where suddenly, menswear company Noah Domino’s ‘Paving for whether it’s in politics or offered refunds to Trump Pizza’ project, which works other types of institution, supporters who might be with local governments appealing to people’s offended by the brand’s in the US to fix roads. emotions became more liberal political stance. Initially planning to provide important than facts. As grants in 20 locations, misinformation became It can also serve as an two months later it was more commonplace, it was antidote for brands whose expanded nationwide after natural to question reality, historic ways of doing people from all 50 states to wonder: “What’s true? business don’t jibe with the submitted requests for And what’s false?” times. H&M may be known road repairs. The company as the flagship brand of humorously aligned the If you pivot forward to ‘fast fashion’ but it could be mission with protecting 2019, we’ve had three to argued this has given focus consumers’ precious pizza The role of brands four years of living in that to its sustainability efforts. on the way to their front environment, landing us Its ambitious goals include door, but the underlying in a post-trust in the post-trust society. shifting the company to a message is serious – where We’ve gone from post circular economy where government has let us world truth, to post trust. This has clothes are recycled into down, brands might pick us created white space for new products. up. marketers. The post-trust society Read Sarah Owen’s full Sarah Owen commentary in the Society spin-off This white space, which has also exacerbated the report of Marketer’s Toolkit 2020 SENIOR EDITOR, WGSN used to be partially filled by feeling that governments other institutions, is now are not dealing with many where brands are carving of the issues that concern out a place to gain or regain us today, and that, too,

Expert commentary Expert trust, aligning themselves © Copyright WARC 2019. All rights reserved. creates white space where The WARC Marketer’s growing. The message Attract talent Toolkit survey is a from retailers could not be reflection of what clearer; Tesco, for one, is Those brands able we’re seeing all saying it reserves the right to give their people a around us. not to list products with sense of purpose will excessive non-recyclable gain disproportionate plastic from 2020 onwards. energy and productivity. With 84% of respondents Brands that demonstrate Unilever’s brand purpose saying conscious clear and relevant social is “to make sustainable consumerism and purpose credentials can living commonplace”, sustainability will impact expect to find preferential and the positioning their marketing plans for treatment from retailers. is paying off, not only 2020, their thoughts map in how its sustainable to consumer data on the Effective marketing brands performed in the growing importance of marketplace, but also in these issues. It’s clearly Brands that find their true how it is viewed by potential time for brands to step up purpose – not only by employees. According their game. answering the question to Gallup, it is a preferred “Why do you exist?” but employer in most of the In 2020, marketers also the more important countries in which it must demonstrate their question, “What would the recruits graduates. The authentic sustainability and world really miss if you ease with which talent can social purpose credentials. no longer did it?” – will migrate towards brands Sustainability Brands that are able to do find accelerated growth and campaigns that stand this will win consumers opportunities. It goes for something makes this appeals to brands, and be more attractive beyond just being ‘on issue, and opportunity, to investors. Sustainable brand’ to understanding even more pronounced in brands will win in the and encompassing the marketing industry. consumers – and following three areas: category drivers, Read Andy Last’s full commentary Retailer listings addressing a genuine in the Society spin-off report of investors societal issue, finding Marketer’s Toolkit 2020 common purpose with Andy Last We are just at the start of partners and advocates, the Great De-listing. From and satisfying all CO-FOUNDER, MULLENLOWE SALT high-fat and sugar foods to stakeholders. plastic bottles and straws, the list of items consumers

What does your brand stand for? Why Alibaba attempts to green Singles Day, How Carlsberg Beer’s ‘Snap Pack’ Solved A purpose is key to competitive agility, WARC, November 2019 Sustainable Packaging Challenge, WARC, October Rachel Barton, Masataka Ishikawa, Kevin 2019 Quiring and Bill Theofilou, WARC, April 2019 The dangers of ‘woke-washing’, WARC, September 2019 adidas India Pvt. Ltd.: adidas x Parley, Run For The Sustainable shoppers buy the change Oceans, SABRE Awards, Asia-Pacific, 2019 they want to see in the world, Julia Wilson, The evolution of purpose, why circularity WARC, April 2019 is the new CSR, Graham Staplehurst, WARC, August 2019 Brands have a long way to go on plastic packaging, WARC, October 2019 Why doing good is good for business, Chris Arnold, WARC, April 2019 The third moment of truth: Why sustainable packaging became a The true meaning of brand purpose: corporate necessity, Ian Payne and Colin Why the most effective campaigns are Strong, WARC, February 2019 inclusive, not divisive, Tom Ewing, WARC, October 2019 Procter & Gamble Co (Household & Toolkit series domestic - Home care), Euromonitor Nike and Kaepernick: the commercial Company Profiles, October 2019 fallout, WARC, September 2018 Marketer’s Toolkit 2020: Data Report H&M Hennes & Mauritz AB (Retail), Saving the planet nudge by nudge: Using Euromonitor Company Profiles, September behavioural economics to create effective Society report: The Greta effect 2019 communications for a sustainable future, Crawford Hollingworth and Sarah Murray, Sustainability and recycling-by-design, WARC, April 2019 Mark Curtis, WARC, April 2019

© Copyright WARC 2019. All rights reserved. After years of hype about Technology consumer tech, brands appear more cautious about investment in new technology – a majority of respondents to the Marketer’s Toolkit survey even agreed that brands had over-invested in tech at the expense of creativity.

Artificial intelligence and payment tech will be key priorities.

Voice, despite the hype, will remain a minority pursuit as marketers figure out where the opportunities lie; blockchain and AR/VR will The drivers be niche. 5G is expected to have an impact as an enabler of other tech – but there is currently a sense of ‘wait and see’ about this enabling new development.

models, processes Meanwhile there are big changes in the world of adtech, as the limitations of audience-based and possibilities buying become clear. A renewed focus on context will dovetail with the emergence of connected TV to create new opportunities in the programmatic world.

© Copyright WARC 2019. All rights reserved. © Copyright WARC 2019. Allrightsreserved. invest init2020. Marketers remain unconvinced by blockchain; just13%expect to those whoare usingit say they have limited init. capability of Andthemajority important’. than‘very this as‘notimportant’ After years two ofhype, voice still haslimited traction –more rate strategies to meetconsumers’ evolving payment expectations. payment apps,brands are having to evolve theirpayment by moreimportant respondents thanAI.Withtherise ofmobile pronounced inAsia,where payment tech wascited asvery reflecting thegrowthe-commerce. of Thistrend isparticularly There isgrowing interest inenhanced payment technologies, and thenapply, themany datasources atamarketer’s disposal. focus for brands. That reflects theurgent need to make sense of, same asinprevious years, intelligence withartificial thebiggest The prioritiesinterms ofemerging technologies are largely the avoiceof revolution intelligenceArtificial gains traction, butno sign yet Themes fromThemes the data 69% WE / THEY ARE NOT PREPARED FOR VOICE 18%

VOICE-OPTIMISED SEARCH marketing strategy? prepared for inyour /their you /your typical clients voiceapplications of are thefollowingWhich of 14%

VOICE-OPTIMISED CONTENT 10%

VOICE-BASED SOURCE: WARC Marketer’s Toolkit 2020survey ADVERTISING 9% VOICE-ENABLED COMMERCE 2%

OTHER How important SOURCE: WARC Marketer’s Toolkit 2020 survey will each of the following emerging technologies be to you / your clients in 2020? ARTIFICIAL INTELLIGENCE ENHANCED PAYMENT TECHNOLOGIES LIVE VIDEO / LIVESTREAMING / BOTS CHAT MESSENGER APPS INTERNET OF THINGS VOICE INTERFACES WEARABLES 5G / VIRTUAL AUGMENTED REALITY FACIAL RECOGNITION

NOT IMPORTANT 18% QUITE IMPORTANT 25% 25% 24% 27% 34% 35% VERY IMPORTANT 36%

54% 52%

47% 40% 43% 47% 36% 47% 44% 48%

32% 35%

26% 9% 7%

Marketers see 5G as an enabler

34%

5G is set to have an impact, but is largely seen as enabler, particularly around enhanced content strategies. Only 31% 24% see it as a transformative tech – a similar proportion to those deeming the technology 5G will be transformative ‘very important’ for their organisation in 2019 for us / our typical clients (29%). over the next 12 months STRONGLY DISAGREE Respondents in Asia are significantly more bullish on 5G — 46% in these markets see DISAGREE it as transformative. This perhaps reflects the importance of mobile in many of these NEUTRAL markets.

AGREE

33% 15% Context is key as 2% brands look for more from programmatic 12% 12% 2% 22% Programmatic is at a crucial moment in its 38% development. It has been transformative Programmatic has for some areas of ad trading, but half of our failed to live up to its 21% respondents believe it has failed to live up to its potential. potential

The limits of audience-based buying are clear in concerns around context and brand safety. There is widespread agreement that these factors are now more important than cost when planning media, and context is set to be a key debate for 2020. STRONGLY DISAGREE 43% Brand safety and context are These safety issues are causing some DISAGREE now more important than brands (though a minority) to report cost when planning media increased spending on traditional media, NEUTRAL where brands can retain control over where, when and in what context their ads appear. AGREE

STRONGLY AGREE © Copyright WARC 2019. All rights reserved. Contextual targeting important” considerations will focus on ad unit is returning to the than cost when planning insertions around forefront of media media campaigns. More on-demand content, planning. contextual targeting exemplified by UK products are expected in broadcaster ITV, which the market in 2020. has partnered with ad In light of concerns around tech firm Amobee to programmatic audience The next wave of serve addressable ads on targeting, media owners programmatic will its VOD service, ITV Hub. have revived age-old be driven by quality arguments over the In depth: environments For many marketers, benefits of context. Their however, the most claims are supported by interesting opportunities Context and plenty of evidence. Programmatic media will arise when TV stands at the cusp of its companies and OTT connected TV: Recent research by Kantar next phase – one which providers can dynamically found that site context will see the automation of insert tailored and and ad congruence can traditional media channels targeted video ads into reinventing boost campaign impact through connected TV, live television streams. significantly; for instance, online audio streaming Viewers are on average purchase intent can be services and digital out of 21% more engaged programmatic “significantly higher” when home (DOOH). by addressable ads, consumers are exposed to and attentiveness can brands on category-related Media owners argue be as much as a third websites. that these nascent WARC subscribers can go deeper into the next phase higher (35%), according of programmatic in the Technology spin-off report of addressable channels do to research by Sky’s Marketer’s Toolkit 2020 The message seems not suffer from the same AdSmart. to be resonating with challenges facing digital brands: nearly three- media. A brand video quarters (72%) of running on connected TV advertisers surveyed is likely to be in a quality by WARC concurred environment. with the statement that brand safety and context In 2020, much connected have become “more TV advertising investment

“ We’re making a fairly big bet next year on streaming TV. We’ll be looking at some of the biggest streaming services, like Roku or Hulu, but also upstarts like Samsung. We’re going to place our bets in multiple places and see what’s the most effective. Jill Baskin

CHIEF MARKETING OFFICER, THE HERSHEY “ COMPANY “ Most programmatic is brand-damaging Measurement, viewability, [media] quality: in the way it ends up being executed. I’m all of these are pretty much daily topics. really wary of addressable TV. From my I don’t think we’ve said, ‘Well, we’ve point of view, TV is about driving fame, cracked it, this is over, we can move on.’ broadly, and fame is [based on] massive But things seem to evolve for the better, collaborative experience. My problem and I’d say the system is maturing overall. with addressable TV is it massively fragments [audiences]. Olivier Bockenmeyer Cheryl Calverley REGIONAL HEAD OF CORPORATE MARKETING, SOUTH EAST ASIA, SAMSUNG CHIEF MARKETING OFFICER, EVE SLEEP

© Copyright WARC 2019. All rights reserved. Potential pitfalls Brands must navigate a Avoid over-targeting at the Marketers must remain ‘mess’ of standards and expense of reach vigilant of privacy formats concerns An increasing body of One of the key benefits of evidence recommends that Just as advertisers must ensure programmatic media is its marketers pursue “quality they are allowed to exploit efficiency. Sadly, the same scale” through their media mix, user data when executing cannot be said of connected combining meaningful reach programmatic campaigns TV as yet. Managing buys with consumer relevance. in digital media, brands also across networks is fiendishly As addressability infuses require permission to target difficult, with advertisers being traditional media such as audiences in newer addressable forced to navigate a bewildering TV and OOH with targeting channels. A connected TV ad assortment of systems and capabilities, brands should be for an auto brand served to a standards. OTT players are wary of losing the benefits of household in the market for a releasing new formats, such as mass reach. Rather than seeing new car is still subject to privacy Hulu’s ‘pause ads’, which display connected TV as a means of regulation such as GDPR in a brand message when users eliminating perceived ‘wastage’, Europe and the forthcoming press pause during a video. advertisers would be better CCPA (California Consumer Some media owners, such as off using that addressability Privacy Act) in the US. RTL/Adconnect, are creating to increase relevancy across distinct ‘connected TV’ and the full spectrum of audiences ‘addressable TV’ ad products to and segments provided by the make sense of the mess. Moves medium – with a firm grip on are underway to standardise frequency to prevent campaign formats, but this process may overexposure. take some time.

© Copyright WARC 2019. All rights reserved. Faced with a gloomy Research carried out economic outlook, in 2017 found that easyJet easyJet, a low-cost broadcaster VOD is Project airline, adopted consumed in a similar Multiscreen way to TV, with over a rigorous “total 50% of views happening video” media plan, on the big screen and taking advantage mostly unskippable. The of the incremental advertiser therefore used reach offered by the channel to rebalance its frequency distribution. connected TV formats. EasyJet’s media agency OMD has subsequently continued to evolve its planning methodology, prioritising key campaign objectives, interrogating data sources and readjusting the balance between video formats. For example, while the addressable TV ‘universe’ is 89% smaller than that of broadcast TV, it is much more efficient at reaching an in-market audience. Case study Case © Copyright WARC 2019. All rights reserved. I like to use the high-consideration to identify your most example of Procter categories like valuable audiences, so & Gamble. Everyone automotive, real estate that you can prioritise uses laundry and financial services them through media. The detergent. But – where it’s a bigger life whole point is you are everyone has different decision, and where the going to pay a premium motivations and brands are able to track when you do addressable, performance. Because it is and you need to make needs. addressable and targeted sure that that premium is and backed by data, it is going to pay off. A lot of P&G needs to buy all more expensive if you are work needs to be done of us from a targeting comparing it apples-to- up front to understand standpoint, but what they apples on a demographic different segments say to us – that’s where it basis. However, if you’re of audiences, who is gets addressable. factoring out wasted purchasing, who is most reach, then it’s really valuable, and what are We’re not suggesting not more expensive. their motivations. You giving up reach; we’re Nevertheless, if you are don’t have to do it for suggesting being relevant paying a premium, you every campaign – you to the individuals you are need to be able to know can do once and then you reaching, and segmenting that it’s working. revisit it every 12 or 24 the reach that you’re months. buying, rather than The challenge will Addressability is narrowing the reach. continue to be where Read Angela Steele’s full there isn’t enough commentary in the Technology Connected TV costs spin-off report of Marketer’s about creative, inventory to meet Toolkit 2020 more advertiser demand. not just targeting Brands must carry We have some advertisers out foundational with a pretty aggressive appetite for connected work before starting Angela Steele TV, but the marketplace out CHIEF STRATEGY OFFICER, CARAT USA has not caught up. The clients we find taking If you’re going to do advantage of it are those addressable TV, you

Expert commentary Expert in performance-driven, need to have the ability © Copyright WARC 2019. All rights reserved. Remember the you no longer could performance is next to saying that “content use a cookie-based impossible without a PhD is king”? audience? in data science.

Comcast’s Blockgraph With the birth of With this level of and the industry programmatic and the consumer understanding consortium OpenAP are ability to find an audience, comes the ability to just two examples of regardless of context, provide ‘addressability’ tools and technologies we somehow lost sight to traditional media trying to solve some of of this core marketing channels still operating these roadblocks. To truly concept. Now, with on less precise currencies unlock more of the $70b pressure on tracking and – like this thing we still still ‘stuck’ in the world targeting technologies, call ‘television’. Whether of traditional television the pendulum has swung a broadcast network, a advertising – it all has to back – understanding telecom conglomerate or get easy – from holistic contextual relevance is a Silicon Valley streaming campaign planning, again a key component to startup, the promise cross-network execution any digital strategy. of bringing people and true people-based and household-based measurement. In a real-time world, a addressability to the marketer must again ‘television’ channel is a Ask: How does your prioritise targeting based pitch you can’t avoid. ‘television’ strategy on the consumer’s change as some of the Context and environment – whether But executing against the marketplace friction text, sound, sight or ‘addressable promise’ isn’t connected TV in motion. Publishers and as easy as we’d like. The is removed? content owners must too same ‘digital’ headaches 2020 make operating against that we seemed to have Read Mark Wagman’s full an understanding of just finished dealing with commentary in the Technology contextual relevancy easy have reared their head in spin-off report of Marketer’s Toolkit 2020 and painless. this next wave of television Mark Wagman – managing buys across Ask: How would networks is difficult, MANAGING DIRECTOR, MEDIALINK your targeting sharing audiences in a strategies change if privacy-compliant way is

Digital growing pains: How context increasingly matters, Kristanne easyJet: Project Multiscreen, Sophy Part and Niall Murphy, Roberts, WARC, September 2019 WARC Media Awards 2018

Impact of Media Context on Advertising Memory: A Meta-Analysis of How Axel Springer is using its data to offer brands new insights Advertising Effectiveness, Eun Sook Kwon, Karen Whitehill King, Greg into audiences, WARC, March 2019 Nyilasy, and Leonard N. Reid, Journal of Advertising Research, 2019

Why it pays to play by the rules of attention, Tim Elkington, WARC, July 2019

The high value of low attention, Professor Karen Nelson-Field and Kellen Ewens, WARC, September 2019

Video completion rates continue to grow, boosted by connected TV, WARC Data, July 2019

Inside P&G’s connected TV advertising strategy, WARC, June 2019

Why TV broadcaster RTL/Adconnect is focusing on short-form and long- form content, WARC, March 2019 Toolkit series How to balance your brand communication plans, Faris Yakob, WARC, October 2019 Marketer’s Toolkit 2020: Data Report IRI cautions against “micro-targeting” or too much of a good thing, WARC, April 2019 Technology report: Context and connected TV – Reinventing Planning video effectively, Sophy Part, WARC, September 2019 programmatic

© Copyright WARC 2019. All rights reserved. Economy Brands are re-assessing how they balance their spending plans for 2020, as more marketers look to respond to a crisis of short-termism, and an over-investment in performance marketing. This is set to be a major trend for 2020, though there are significant hurdles to increased brand-building investment.

The rapid growth of investment in online video is expected to continue, with Instagram and YouTube set to benefit The drivers and a significant number of brands of marketing spending on TikTok for the first time. Search is also expected to be a focus investment for 2020, with Amazon’s fast-growing ad business set to benefit alongside Google.

Themes 9% from 28% Brands have How do you expect to the over-invested in current balance of your / your the data 20% performance at the typical clients’ investment expense of brand in brand vs. performance to change over the next year?

STRONGLY DISAGREE NO CHANGE Marketers plan renewed focus on 32% DISAGREE INCREASED INVESTMENT IN brand-building PERFORMANCE 38% NEUTRAL INCREASED INVESTMENT IN Senior marketers increasingly recognise BRAND that they have over-invested in short- AGREE term marketing tactics (or ‘performance’ marketing) at the expense of their brands. STRONGLY AGREE This is reflected in the Marketer’s Toolkit survey – respondents see short-termism as the number one industry issue, and 40% predict increased brand investments in 2020 (versus 32% who see higher 40% performance budgets). 32%

© Copyright WARC 2019. All rights reserved. © Copyright WARC 2019.Allrights reserved. to change in2020? following mediachannels investment inthe How doyou expect significant growth. Mobile andsearch formats willalso see television orothertraditional channels. increased dollars than brand-building video appears set to benefitmore from prioritise onlinevideoformats in2019; the Marketer’s Toolkit survey, brands will channels willbenefit evenly. According to helping drive upinvestment. Butnotall presidentialOlympics andUS election forecasts by WARC Data, withthe 6% in2020,according to thelatest Globally, adspendisforecast to increase growth Video, search andmobiledrive INCREASE STAY THESAME DECREASE SPEND ONTHISPLATFORM DONOTWE /OURCLIENTS (% INCREASE MINUS %DECREASE) (%INCREASE MINUS NET BUDGET CHANGE BUDGET NET +80% 15% 81% 4% ONLINE VIDEO (INCLUDING SOCIAL) +67% 68% 26% 5%

MOBILE +54% 56% 37% 5%

ONLINE SEARCH +48% 33% 55% 4% 7% ONLINE DISPLAY

(INCLUDING SOCIAL)

22% 16% 45% 17% +5%

OOH 20% 41%

19% 21% -2%

RADIO / AUDIO 29% SOURCE 34%

16% 21% -5%

CINEMA

: WARC Marketer’s Toolkit 2020survey 12% 29% -17% 42% 17%

TV 56% -51% 26% 13% 5%

PRINT © Copyright WARC 2019. Allrightsreserved. to change in2020? following digitalchannels investment inthe How doyou expect spend onthee-commerce site. one inthree respondents planning greater growth ofAmazon asanadplatform, with benefit Google – but will also drive continued Plans for increased search spendnaturally platform. greater investment onthisemerging with oneinthree respondents planning there is also significant interest in TikTok, beneficiaries ofthe focus onvideo–though Instagram andYouTube are thekey andTikTokAmazon set to benefit INCREASE STAY THESAME DECREASE SPEND ONTHISPLATFORM DONOTWE /OURCLIENTS (% INCREASE MINUS %DECREASE) (% INCREASE MINUS NET BUDGET CHANGE BUDGET NET +65% 68% 22% 7%

INSTAGRAM +61% 64% 25% 8%

YOUTUBE +58% 60% 30% 8%

GOOGLE +35% 40% 25% 31% 5%

LINKEDIN 45% +33% 19% 35%

AMAZON +14% 20% 34% 39% 7%

FACEBOOK 33% +31% 13% 52%

TIKTOK 20% 15% 63% +17% SOURCE WECHAT : WARC Marketer’s Toolkit 2020survey 19% 28% 36% 17% -2%

TWITTER 44% 26% 18% 12% -6%

SNAPCHAT 10% 71% 15% +7%

BAIDU SOURCE: WARC Data

The global INDIA adspend outlook 15.6%

According to WARC Data’s adspend forecasts, global ad investment will rise 6.0% to $655bn worldwide next year, buoyed by an 8.8% rise in the world’s largest ad market, the US. Here, additional ad investment during the presidential election CHINA campaigns, as well as higher brand spend around the Tokyo 9.7% US Olympics, will lift growth. Digital growth is slowing but will still be 8.8% strong at 14.6%, taking the total to $142bn – 59.6% of all spend.

China was hit by a stronger dollar in 2019 but is expected to recover to a degree in 2020 (+9.7% to $98bn). India will lead growth, with TV, internet and print all rising to culminate in 15.6% GLOBAL growth to $11bn. Ad growth in the UK (+3.3%) and Germany 6.0% (+1.3%) is muted by historic standards, partially a reflection of slowing economic activity in these markets. UK

In terms of category adspend, global growth is particularly JAPAN

strong in financial services (+11.8%), telecoms and utilities AUSTRALIA 3.2% 3.3% (+8.5%) and automotive (+6.8%). 2.4% GERMANY Find out more about the adspend outlook for 2020 at WARC Data. 1.3%

© Copyright WARC 2019. All rights reserved. Marketers are re- There is a tension Another issue is a loss of prioritising ‘long-term’ between what brands confidence among modern brand-building are saying and where marketers as to their ability they will spend to build brands. An IPA/ Financial Times study As the Marketer’s Toolkit released mid-2019 found survey shows, the efforts of WARC’s data reveals the that almost one in three researchers such as Les Binet gap between intention and senior marketers rated their and Peter Field to refocus action. Money continues to ability to build brands as brands on the long term are pour into marketing channels average to poor. bearing fruit. Binet & Field best suited to performance famously argued that a 60/40 marketing or short-term Respondents also point investment split between impact – there is a positive to metrics – specifically, brand and sales activation outlook for search and online the need for better signals In depth: was the ‘rule of thumb’. Many display in the survey, while that brand-focused work is CMOs acknowledge they ‘classic’ brand-building having an impact, presented are way off those numbers – channels like TV and out of in a business language other the pivot back some have even argued the home look more negative. members of the C-suite can role of marketing has been Brands appear to view understand. marginalised as a result of online video as key for to brand short-term thinking. brand-building in 2020, with Test-and-learn may be key more than 80% anticipating for companies looking to WARC subscribers can go deeper into the pivot back At the same time, fresh greater spend on that reinvest in brand. Marketers to brand in the Economy spin-off report of Marketer’s research is underlining Toolkit 2020 channel. should take note of an the crisis short-termism is experiment by Australian creating. Field debuted new Culture, skills and insurance giant IAG. It will research (with the Institute of metrics are key carry out this test to make Practitioners in Advertising) barriers to brand- the case for long-term brand in Cannes arguing that short- investment, by spending termism had undermined the building 80% of its budget on brand- link between creativity and building activities in a effectiveness. Survey respondents targeted part of Australia for identified the general the next two years. business culture of short- termism, and a squeeze on budgets as significant challenges to brand-building. © Copyright WARC 2019. All rights reserved. CMO comments “ We look at the holistic impact of the consumer experience through the shopper journey, of which media and comms is just one bit. Innovation plays an important role, distribution, the pack design, the product quality. All of these things have an accumulated impact on both short-term performance and long- term brand building. Steve Challouma

“ MARKETING DIRECTOR, BIRD’S EYE “ Balance is the right word… Creating Being a member of this industry, you experiences that they’ll remember so must know how to build and operate a that you have to work a little less hard brand. The brand is the lifeblood of a with performance marketing in the future company, and is significant in the eyes to get them to buy, or so that you can of customers, the government, and start to charge a premium and stand the media. Many times, the marketing out from the market to take share from department is seen as a cost centre, so competition. That long-term brand- CMOs save money to increase output, building is something that we’re focusing but it is not enough. Cutting costs will on. only result in an incremental contribution. Ivan Pollard Gill Zhou

CHIEF MARKETING OFFICER, GENERAL VP MARKETING, COMMUNICATIONS AND MILLS CITIZENSHIP, IBM CHINA

Failing to speak the Over-relying on Assuming brand- language of finance attribution modelling building work won’t drive short-term sales To make the case for long-term Digital attribution models tend investment in brand-building, tie to overstate the effectiveness Good brand-building work the impact of marketing activity of ads that consumers see just will still drive commercial into the language of finance: before they make a purchase. performance in the short term. long-term sales streams, While digital attribution can The effects should not be margins, revenue, cash flow, measure the effectiveness of invisible or solely measured in profit and shareholder value. digital media channels with brand tracking studies. Intermediate brand measures greater detail than econometric are less likely to cut through modelling, it doesn’t always outside the marketing team. tell the full story. Sophisticated marketers tend to combine attribution work with other forms of modelling.

© Copyright WARC 2019. All rights reserved. Adidas is on In 2015, adidas was a marketing investing just 23% of effectiveness journey its media spend into as it shifts its emotion-led brand Adidas focus from simple advertising and 77% into performance advertising. efficiency measures It relied on last-click and embraces attribution and did no econometric econometric modelling modelling to give it a or brand tracking, with more nuanced view the primary focus on minimising media costs. of the impact of its To rebalance for long- spending. term growth, adidas now invests in econometric modelling and has a ‘test and learn’ approach to testing hypotheses from attribution and econometrics to see which initiatives might grow incremental revenue. Case study Case © Copyright WARC 2019. All rights reserved. While marketers know share requires brands to getting playful with culture there’s a problem, entertain their audiences. – parodying or referencing knowing how to fix it is Lemon shows how different cultural works. another matter. measuring emotional Think Amazon dropping

response to ads across a Hannibal Lecter into its whole category, combined Super Bowl Alexa ad. We could start by looking with share of voice, at the work itself. This is markedly improves share 4. People are what I’ve done in Lemon, gain prediction over share characters, not ‘props’ a book published last of voice alone. So make month by the IPA. I look ads that people will enjoy. for the features that are The right brain responds to more likely to appeal to 2. Think dramas, not “betweenness” – a sense of connection between the right-brain (dialogue, lectures a strong sense of place, people (or creatures). To melodic and harmonic build betweenness you music), and others that Appeal to the right-brain’s need characters who feel play to the left-brain’s understanding of lived time, like they’re alive and have attentional priorities (words its love of wordplay and agency – they aren’t just on screen, abstracted body the relationships between bodies in the service of parts and flat, placeless people. Ditch the didactic, using a product. posturing, message- and backgrounds). The fewer 5. Local richness beats right-brained elements voiceover-led tone of an ad contains, the less modern advertising and global blandness Five ways to make it moves audiences, and portray an unfolding story the less effective it is for instead. Humour is perhaps A strong sense of place or market share growth. the most important tool in history appeals to the right effective brand Based on the findings, here the creative’s toolkit. brain. The global campaign are five practical ways that 3. Play with culture, usually sacrifices this advertising advertisers can make their richness; a sense of place work more right-brained don’t mirror it is almost always entirely and more effective. lost, as it’s astonishingly Orlando Wood In their desire to feel rare for ads to create a 1. Entertain for contemporary, advertisers strong emotional response CHIEF INNOVATION OFFICER, SYSTEM1 GROUP commercial gain often engage with culture across different cultures. by reflecting its surface details – clothes, hair, tech. Read Orlando Wood’s full The quickest route to commentary in the Economy spin- Expert commentary Expert building your market Appeal to the right-brain by off report of the Marketer’s Toolkit © Copyright WARC 2019. All rights reserved. In 2020 we can creative brand strategy celebrates a moment in expect to witness with Mars’ success, when time and a single year the rise of a ‘back to he stated that it boosted of unrivalled creative brand’ mentality and the organisation’s revenue excellence, but it’s the approach – where by more than $50 million. sustained performance, the data and tech will long-term brand building It is also important and the very deliberate take an important to build a culture that journey to the stage that supporting role and can deliver creativity we should all pay attention act as an enhancer time after time to. and an enabler, with In 2014 Fernando Machado the brand very much Our work with global front and centre took the marketing reins brands has highlighted at Burger King. In 2019 three important steps a his team and their agency The first major challenge is CMO can take to create a partners won 40 Lions consistency. Being creative culture where creativity is across 15 different pieces while retaining consistency valued: of work. Each piece of of brand is key to unlocking work was described by our the benefits of brand- 1. Build internal buy- juries as being individually building: from forging in: make the case for short-term, but collectively emotional attachments, creativity. infused with a consistent, to driving long-term brand 2. Create alignment: build a recognisable and memory- Consistency and equity and sales influences. collective understanding of building narrative. what ‘good’ looks like. culture are key Snickers, for example, 3. Long-term thinking: a Marketers face criticism has won many Lions three to five-year plan with about the growing (including a Gold Creative clear measurement criteria preoccupation with to getting ‘back Effectiveness Lion), with that are appropriate to the short-term activations its ‘You’re not you when brand in question. and seductive and often to brand’ you’re hungry’ work – an ‘gimmicky’ ideas. As enduring campaign that In 2019, Burger King Snickers and Burger King has been revived year picked up the inaugural show us, CMOs should Simon Cook after year with a fresh take Creative Brand of the focus on consistency and each time. Bruce McColl, Year Award at the Cannes culture if they are to break MANAGING DIRECTOR, CANNES LIONS Chief Marketing Officer at Lions International out of this cycle. Mars (2006-2016) credited Festival of Creativity. By Read Simon Cook’s full commentary Expert commentary Expert a re-think of long-term its very nature, this award © Copyright WARC 2019. All rights reserved. in the Economy spin-off report of the Marketer’s Toolkit 2020 Further reading Case studies

adidas makes course correction on marketing Effectiveness in Context, Les Binet and Strategy and effectiveness lessons from effectiveness, WARC, October 2019 Peter Field, WARC, October 2018 Cannes Lions 2019, WARC, June 2019 How reviving its original purpose reversed 8 years of Les Binet examines how digital affects CMO Growth Council: How the worlds decline for NRMA Insurance, Australian Effie Awards, brand building/activation model, WARC, top CMOs are reshaping the future of 2019 April 2019 marketing, WARC, October 2019 Why eBay opted to reduce its reliance on The Crisis in Creative Effectiveness, Peter Mind the gap – why brand-building too performance media, WARC, September 2019 Field, WARC, June 2019 often slips through the cracks, WARC, June 2019 The AA: Sparkplugs to Singalongs, IPA Effectiveness What we know about attribution and Awards, 2018 marketing mix modelling, WARC, August Insurance Australia Group taps spirit of 2019 Binet and Field in a two-year marketing test, WARC, July 2019 What we know about econometric modelling, WARC, May 2019 What you need to know about the Australian Effies database analysis, WARC, How winning brands grow and why September 2019 stagnant brands dont, WARC, November Toolkit series 2019 The long-term impact of advertising, Ebiquity, 2018 Binet and Fields lessons for digital Marketers Toolkit 2020: Data Report startups, disruptors and advertising refuseniks, WARC, May 2019 Economy report: The Pivot Back To Brand

Kraft-Heinz results: a return to sound marketing theory, WARC, November 2019

© Copyright WARC 2019. All rights reserved. Customer experience (CX) Industry will remain an industry buzzword across the industry in 2020, and a priority for marketers’ time and investment. Creative agencies and consultancies will battle to combine CX with brand thinking.

Meanwhile, in-housing of adtech will continue as brands take charge of their data. In-housing of creativity remains a trend, but a significant minority of brands are going the other way and The drivers putting more work out of house. In media, a major story for 2020 will dictating the be the growing reliance of advertisers on ‘walled gardens’ that combine competitive paid advertising and payment tech or e-commerce fulfilment. Amazon’s environment growth as an ad platform looks set to continue, and Facebook’s attempts to build its own currency can be seen as an attempt to repeat the success of China’s WeChat.

© Copyright WARC 2019. All rights reserved. Themes SOURCE: WARC Marketer’s Toolkit 2020 survey Which elements of digital from transformation will be most important to your / your typical the data client’s business in 2020?

CUSTOMER EXPERIENCE CUSTOMER TOOLKIT 2019

TOOLKIT 2020 Consultancies and agencies INSIGHTS DRAWING BIG DATA FROM converge on brand experience 57% Customer experience (CX) will continue to drive the digital agenda in 2020. This is 54% DATA ORGANISATION DATA AND MANAGEMENT good news for consultancies, which are 50% competing with agencies for business and have developed specific expertise in CX. ECOMMERCE / NEWECOMMERCE MARKET TO ROUTES CHANGING COMPANY CULTURE However, the renewed focus on brand- 40% 39% building expected in 2020 (see Economy RESTRUCTURING THE RESTRUCTURING MARKETING TEAM chapter) is likely to mean a growing focus 35% on what ‘brand’ means within customer 33% experience. Here agencies arguably have OF AUTOMATION MARKETING TASKS

29% IN-HOUSE AGENCIES TEAMS OR CREATIVE an opportunity to play to their creative 28% strengths, while consultancies will look 26% 26% for opportunities to acquire more creative IN MARTECH INVESTMENT firepower. 16% 18% 15% 17% Measurement of the effectiveness of CX 15% IN-HOUSE PROGRAMMATIC programmes will be a key challenge in 2020 13% – survey respondents had a negative view 12% of CX effectiveness, and a majority said CX was harder to measure than advertising. 7%

34%

In-housing continues – but it’s not one-way 25%

41%

34% There has been a trend towards the in- In 2020 how will you be housing of services and functions in recent changing how you manage years, and though these results show that creative services? 53% some in-housing continues, for creative services it is not a one-way process, with a quarter of marketers planning to outsource more in 2020. 13% In-housing is happening to a greater extent in advertising technology: 30% of client- side respondents say they already handle adtech in-house, and 34% will bring more of this work in-house in 2020. In 2020 how will you be changing how you manage adtech and BRINGING MORE IN-HOUSE programmatic buying?

OUTSOURCING MORE

Which elements of digital transformation will be most important to you / your typical client’s business in 2020? DATA ORGANISATION DATA AND MANAGEMENT MEDIA AGENCY SKILLS DIGITAL SPECIALIST BUSINESS ANALYSIS AND CONSULTANCY

CREATIVE AGENCY 71%

OTHER AGENCY IN-HOUSE CREATIVE PRODUCTION TECH BUILD AND IMPLEMENTATION EXPERIENCE DESIGN AND CX 66% 63% 64% 62% 53% 52% 51% 50% Agencies look for consultancy 49% skills 41% 40% Agencies on the whole are investing

to respond to the changing market – 37% a majority of respondents from both 33% 34%

creative and media agencies said their 32% employers were investing in business 28% 26% analysis and consultancy skills.

Creative agencies are also prioritising OTHER a range of specialist skills, including in-house production and experience design. Media agencies are more focused on data-crunching. 6%

© Copyright WARC 2019. All rights reserved. 4% Walled gardens combine Ease of payment is a key pillar audience through its Vudu advertising with to platforms’ success. The online video streaming service. payment mass adoption of apps such as Alibaba’s Alipay and Tencent’s Amazon is focused WeChat Pay in China has on winning brand The digital platforms are inspired Facebook’s attempts winning. Amazon is chipping advertising dollars in to launch a cryptocurrency, away at Google’s supremacy 2020 the Libra Association, and of the search ad market, and is accompanying digital wallet, projected to earn $13.9bn from Calibra. As Amazon sets its sights advertising in 2019. Advertising on the brand dollars still accounts for a fifth of Tencent’s In depth: The benefits are clear: being spent on TV media, global revenues, worth over if Facebook can prove a the platform must decide the $8bn, while Alibaba and JD.com relationship between the ads it extent to which it is willing to dominate the retail landscape building serves and an increase in Libra- compromise its single-minded in Asia, with combined annual facilitated sales, Facebook will approach to user experience revenues of nearly $450bn. be able to increase yields from to allow brands to engage brands in ad inventory. However, several consumers in more immersive These ‘walled gardens’ major backers have already and potentially less efficient increasingly combine paid pulled out, and its success is ways. the walled advertising with payment far from guaranteed. options and e-commerce A clear opportunity to trial fulfilment. The promise to Meanwhile, the largest bricks- brand-building formats gardens marketers is a more visible link and-mortar retailers in the US presents itself in Prime Video. between marketing investment – including Walmart, Target Amazon has spent heavily and sales performance. WARC subscribers can go deeper into brand- and Kroger – are pursuing the acquiring broadcast rights Advertisers are responding: building in the walled gardens in the Industry ‘platformisation’ of their own for properties such as the spin-off report of Marketer’s Toolkit 2020 23% of brand respondents to businesses. NFL and the English Premier WARC’s Toolkit survey said League. Consumers’ perceived they plan to increase adspend Take Walmart: it plans to tolerance to interruptive ads in with Amazon in 2020, with only monetise the 300 million live sports content may tempt 3% of marketers anticipating a shoppers visiting its 4,700 Amazon to introduce ads, just decrease in investment. stores each month through as soon as it is able to prove Facebook moves into native-style sponsored search it has an audience for such content. payment as retailers ads, audience targeting and measurement. It has even been move into media seeking to build a mass family © Copyright WARC 2019. All rights reserved. CMO comments

“ The bigger ecosystem coming online is that retailers [like Walmart and Target] are starting to sell media. They’ll have closed ecosystems, so we should be able to see immediately who’s buying, what they’re buying and whether it’s working. That could be huge if it works. Jill Baskin “ CHIEF MARKETING OFFICER, HERSHEY “ It’s not just about driving a sale in If you spend [a lot of] money on a vehicle e-commerce. How do you show up inside then you want to know if it is the right of Amazon so that people are more likely product for you. Therefore, the ‘key to buy your product than somebody owned experience’ is mandatory. You else’s? How do you make all of your have to get people into your product, marketing shoppable? The platforms use your product, experience your absolutely offer an opportunity to make a service. The only way is for us to control sale, to build a brand, and to understand the whole channel ourselves for direct your consumer. access to the end-customer. Ivan Pollard Bernd Pichler

CHIEF MARKETING OFFICER, GENERAL MILLS CHIEF MARKETING OFFICER, ICONIQ MOTORS

Platform ads can be Reliable attribution is Getting lost in the unpopular with users hard to come by crowd

Around a tenth of all product While platforms like Amazon are The high volume of smaller page views on Amazon come moving up the purchase funnel, Chinese brands on platforms from sponsored listings. and enabling product discovery, like Tmall and WeChat can make However, recent research the importance of other it difficult for larger international revealed poor satisfaction channels in growing brand and advertisers to stand out. This scores. While more than a third driving performance should not isn’t helped by the limited of respondents admitted to be underestimated. UK insurer content formats available clicking on an Amazon product Direct Line was able to prove on each platform and app, ad when searching for a product, its brands were earning tens of hindering the development of only 21% find them helpful, 31% millions of pounds in incremental unique branded experiences. claim not to notice them, and profitability in the form of a One way to counteract this is a quarter described them as price premium when purchased to invest in highly distinctive “distracting”. Such findings are via online aggregators, in the branding, including an easily- likely to hinder the introduction of wake of sustained investment identifiable colour palette brand-building ad formats, given in above-the-line advertising. and product shots, and to the intense focus of engineering- While marketers have visibility of build salience through other led organisations like Amazon on the effectiveness of ads within channels. customer experience. Amazon, they should be careful not to discount the importance of other brand touchpoints.

© Copyright WARC 2019. All rights reserved. Case study from fast-track collection meals andpickthemup allowing users to order Pocket Store miniprogram, users were directed to the clicking onWeChat ads, or the QRcodeonTVCs Byscanningtwenties. consumers intheir on WeChat, targeting KFC Pocket Stores The QSRchainlaunched campaign. Chicken Shop’ ‘Christmas Fried attention its of anddriveChina, presence across its physical store to complement KFC usedWeChat $1m inPocket Store sales. and generating more than users peaking at2.6million to date, withdailyactive commerce campaign successful mobile It became KFC’s most points inKFC restaurants. © Copyright WARC 2019. Allrightsreserved. Pocket Store Christmas KFC Following the and support the who gets enthusiastic unprecedented transformation process. about new products and success of Chinese They can do this by technologies, but gets group-buying providing innovation and bored easily and moves platform Pinduoduo, consumer insight, as well on fast. fellow platforms as continuously optimising • CPG and retailers not product portfolios. Failing operating in China including Alibaba, to do this, they will be should follow the JD.com, Kaola and locked out of Chinese market closely, as it RED have all been e-commerce, one of the features digital-first leveraging social world’s largest growth formats, logistics and interactions along the opportunities. technological innovation shopper journey to that are likely to be Recommendations deployed in markets attract new shoppers, for CPG brands: around the world. drive product • Brands will need to discovery and push • With the digital space develop a deeper conversion controlled by domestic understanding of the players Alibaba and ecosystem strategy JD.com, CPGs must of each retailer to With social platforms like align brand strategy to Instagram and Pinterest partner with these platforms now rather relevant touchpoints. ramping up their shopping Early engagement in capabilities, social than relying on unlikely foreign direct new initiatives will be elements are becoming much appreciated by Social meets integral components to investment from familiar Western retailers or retailers and will help shopping globally. Brands drive brand relevance. shopping in China must tap the power of operators. user-generated content, • CPGs should see independent and rural Brands should also and adapt their marketing consider data-sharing strategies to facilitate stores as important Xian Wang routes to a consumer agreements and analytics social interaction between capabilities to ensure that GLOBAL CONTENT DIRECTOR, EDGE shoppers. whose purchasing power will double over they leverage real-time BY ASCENTIAL the next decade. shopper data for new As online captures around product development. 20% of Chinese retail, CPG • CPGs will need to must be part of the rising innovate all the time to Read Xian Wang’s full commentary keep engaged a shopper in the Industry spin-off report of the Expert commentary Expert omnichannel environment © Copyright WARC 2019. All rights reserved. Marketer’s Toolkit 2020 Digital platforms In general, Asian digital Digital platform are built for the platforms hold the reins data enables better sociographic and tight. Third-party providers identification, economic profiles of often need to choose segmentation and their users between the Alibaba or interactions. Brands the WeChat platforms, and without adequate data selecting one excludes the about their prospects, Credit cards and bank other. customers and high-value accounts had high customers will be left flat- penetration in the US, so Didi Chuxing is one of footed. A coherent data Amazon could leverage relatively few companies and analytics strategy those networks for to have successfully when engaging digital payments and lending worked with both, and platforms is a key success capabilities. In China, used this momentum to factor. bank account penetration create its own platform, was far lower, requiring incorporating financial While developing deeper additional capabilities service elements such as consumer and channel and investments such payments and lending, insights has been on as Alibaba with Alipay. which in turn reduces marketers’ agenda for These factors forced friction and increases user decades, digital platforms Asian digital platforms to engagement. take this to a new level of incorporate more services risk and opportunity. into their user experience Digital platforms have Convenience and while, in tandem, reducing redefined convenience. Read Sanjib Kalita’s full commentary friction with simpler in the Industry spin-off report of the Just as ordering from a Marketer’s Toolkit 2020 customer insight communications and user mobile app can be more actions. convenient than the drive growth of traditional ‘convenience’ Digital platforms fail if store, electronic payment platforms they can’t attract third- connected to your digital party service providers identity is more convenient and developers to create than using a plastic card. engaging new experiences, By eliminating the time Sanjib Kalita but there is often tension between item selection between being third-party EDITOR-IN-CHIEF, MONEY 20/20 and payment, digital friendly and the goals of platforms have maximised the digital platform owner. the opportunity for impulse Expert commentary Expert purchases. © Copyright WARC 2019. All rights reserved. Amazon needs to for brand lift measurement 2020 will undoubtedly win other marketing within the platform. In be another year of stellar budget pots to addition, Amazon is finally growth for Amazon maintain its growth focusing real resource on Advertising revenue, but trajectory and building bridges with media mid-term, the true test break Google and agency teams. will be reducing reliance on search spend. The key Facebook’s grip on However, growing brand to this will be whether digital advertising advertising share is no Amazon can bridge the easy task, even for a sizeable gap between It has to convince company as driven as its view on customer advertisers they can Amazon. At its core, experience and how activate “full-funnel” Amazon is an extremely advertising works with the campaigns delivering more rational company, justifying expectations of brands and than just 14-day ROAS. ads as ‘good’ because agencies. they are relevant, rather than effective. How does Read Richard Kirk’s full commentary Two routes to growth in the Industry spin-off report of the exist. Firstly, a play for a company with such a Marketer’s Toolkit 2020 trade marketing budgets, left-brain, engineering- by showcasing how led culture pivot to win Amazon drives mid-funnel at a discipline (brand consideration metrics for advertising) rooted in Amazon’s brands. Leaning on existing people’s irrationality? trade contacts, Amazon hopes to capture a part Winning brand advertising dilemma in its of this $500bn per year spend will also negate industry. January’s launch Amazon’s other key selling quest for brand of a “new to brand” metric points, such as its ability is key to this. to deliver direct sales ad dollars metrics. Asking advertisers Secondly, Amazon is that bought into Amazon pursuing traditional brand Advertising for the clear- Richard Kirk advertising budgets. It cut ROAS numbers to has acquired the rights to suddenly start judging MANAGING PARTNER (STRATEGY & DATA), broadcast live sports via campaigns in a longer-term ZENITH UK Prime, and made moves manner, with new numbers, to reduce spend barriers is going to be a tough sell. Expert commentary Expert © Copyright WARC 2019. All rights reserved. Further reading Case studies

Instagram’s 2019 to-do list: shopping, long-form video and ‘seamless’ branded content KFC Christmas Pocket Store, Case Studies on WARC partnerships, WARC, March 2019 Diageo: ‘World Class List’, WARC News & Opinion Trend Snapshot: Walmart, Kroger and the rise of e-commerce media, WARC, April 2019 Direct Line Group: They went short. We went long, Alibaba is the opposite of frictionless – and it worked for its 2019 Singles’ Day, WARC, IPA Effectiveness Awards, 2018 November 2019

How Amazon will revolutionize the future of television advertising, Andrew Lipsman, Journal of Advertising Research, 2019

Frequency capping on Amazon, Patrick Miller and Sandy Welsch, WARC, March 2019

Amazon Prime Day reaches new heights in 2019, WARC Data, August 2019

11% of Amazon product views are from sponsored ads, WARC Data, September 2019

Only 21% of people think Amazon ads are helpful, WARC Data, July 2019 Toolkit series

Unilever’s shift to e-commerce, WARC, October 2019 Marketer’s Toolkit 2020: Data Report

Industry report: Building brands in the walled gardens

© Copyright WARC 2019. All rights reserved. Policy Data privacy is both a trend in regulation, and a growing consumer demand. As such, it is one of the most important global themes for marketers in 2020

Lawmakers in many markets across the globe are implementing stronger data protection rights which will have significant implications for marketers. In particular, the introduction of the California Consumer Privacy Act in January 2020 is already forcing many brands and media owners to look again The regulatory at their data management practices. While the new regulations change the drivers affecting data landscape, there are opportunities for brands to present themselves as marketing activity ‘privacy first’ to consumers wary of how their data is being used.

In 2020, do you expect advertising and marketing Themes from regulation to become:

52% the data 3%

Marketers expect greater regulation in 2020, with privacy the focus

Nearly half (45%) of respondents said they expect tighter regulation in 2020, with data privacy the common theme among responses.

This is no surprise. In the US, the California Consumer 45% Privacy Act (CCPA) comes into force in January 2020. Like the EU’s General Data Protection Regulation (GDPR), the CCPA limits how companies can collect, store, use and share customer data and gives consumers more control over their personal information.

Regulatory pressure, plus growing consumer concern MORE STRICT about how their data is used (see Society chapter) mean privacy will be a key theme for brands in 2020. STAY THE SAME

WE / THEY HAVE SOME DATA PROTECTION PROVISIONS IN PLACE, BUT ARE PLANNING FOR FURTHER PROVISIONS 52%

Data privacy remains

WE / THEY HAVE A a work in progress for COMPREHENSIVE, ETHICS-BASED, DATA most brands PROTECTION STRATEGY 35% Which statement best describes your / your typical clients’ data privacy provisions? Provisions around data protection are now in place for the majority, but there is still work to do. More than half of respondents said their brands needed to implement further privacy initiatives in 2020.

WE / THEY HAVE Globally, 14% said they had no data protection NO FORM OF DATA strategy. Marketers in Asia appear to be slightly PROTECTION STRATEGY behind the curve on this topic – almost one 14% quarter (23%) of respondents in that region said they had no data privacy provision.

DIGITAL PLATFORMS ARE BIG TECH FIRMS SHOULD TAKING THE ISSUE OF BE SUBJECT TO GREATER BRAND SAFETY SERIOUSLY REGULATION

6% 11% To what extent do you agree with the Most brands would following statements? 28% welcome greater regulation of tech 38% giants STRONGLY DISAGREE DISAGREE

28% NEUTRAL

AGREE

Though marketers have much work to do STRONGLY AGREE around data protection, they feel work is also needed from the digital platforms and big tech firms. Less than half of marketers feel that the issue of brand safety is being taken seriously by marketers, and almost all would 32% 48% like there to be greater regulation of big tech firms.

© Copyright WARC 2019. All rights reserved. 5% Consent management brand/our typical clients have a to reduce the amount of data and ‘small data’ are top strategy for actively collecting they share online. And research priorities for 2020 first-party data from customers’. by the Advertising Research Foundation found that US In China, third-party data is consumers have become less A survey conducted by basically as good as unavailable willing to share various aspects PossibleNOW, a consent in the walled gardens of China’s of personal data. management solutions firm, big tech platforms, and this is found 56% of US businesses are exacerbated by how expensive Brands recognise this shift. The not prepared to meet the CCPA traffic is, according to Sidney WARC survey found 66% of requirements. Cost, and a ‘wait Song, of Publicis Groupe China. respondents agreed or strongly and see’ mindset are the top The resulting fight for data is agreed that consumers will take two reasons cited. The WARC “huge”, Song added. That makes greater control of their data in In depth: survey finds marketers are taking a strategy for first-party data – 2020. action: 57% of respondents within a brand’s control – a must- agreed or strongly agreed that have. New tech has driven fresh Privacy-first they are “readdressing consent concerns. Connected devices management practices in light of In this environment, marketers are capable of gathering privacy regulation”. marketing may pivot from big data, to rich consumer data and are smaller, smarter, more secure increasingly common in private Some are investing in consent data. spaces such as people’s homes management platforms or cars. Yet, often they have WARC subscribers can go deeper into privacy- (CMPs) which collect and store first marketing in the Policy spin-off report of Consumers will take opaque and questionable customers’ consent data, Marketer’s Toolkit 2020 more control over their privacy settings. US lawmakers enabling marketers to keep track have already scrutinised of peoples’ privacy preferences data and their digital consumer privacy concerns and permissions. Consent, identities related to smart TV tracking. permissions and transparency will Marketers engaging in emerging be the new normal for marketers A slew of surveys has found tech should review how they in 2020. that consumers are being much are using consumer data, and choosier about where and how ensure they are compliant with Marketers are also prioritising they share information. data privacy laws, or risk a first-party data, with 58% of Research by Dentsu Aegis backlash. respondents agreeing or strongly revealed that 44% of global agreeing with the statement ‘my consumers have taken steps

“ I’m not really comfortable with it. We make a big effort not to have all of our ad tech in Google and Facebook… I don’t want them owning everything. It will not be good for us but I don’t think it’ll be good for consumers either.

Jill Baskin

CHIEF MARKETING OFFICER, THE HERSHEY “ COMPANY “ Do we need to break down Facebook or Google, for all the concerns about their Google? Are they too big, too powerful? power, is, I would say, an active partner. That debate is probably felt a bit more We are working with them as directly on salient in the US and in Europe. I haven’t business problems as we are on a search necessarily heard a lot of people sharing and a commerce outcome. strong concern about that topic just yet Tariq Hassan in the [Asia] region.

CHIEF MARKETING OFFICER, PETCO Olivier Bockenmeyer

REGIONAL HEAD OF CORPORATE MARKETING, SOUTH EAST ASIA, SAMSUNG

Non-compliance is a Data use is so broad Failure to build financial and brand it is hard to audit consumer consent into risk everything tech-based innovation

Brands that take a careless While Apple has taken great When experimenting with approach to data protection strides to show it considers emerging tech such as laws and consumer privacy risk privacy a human right, it has connected devices, brands must a hefty fine, reputational damage come in for criticism. Earlier ensure they do not overlook and loss of consumer trust. In this year the company had to customer consent. Those that do July 2019 the UK’s Information apologise when it was revealed risk diminishing consumer trust Commissioner’s Office issued that human contractors were and scrutiny by lawmakers. the two largest fines under the secretly listening to recordings EU’s GDPR. British Airways was of people talking to Siri, Apple’s fined £183.4 million (U.S. $230 smart assistant. million) and Marriott’s penalty was £99.2 million (U.S. $124 million) for data breach-related violations.

© Copyright WARC 2019. All rights reserved. Mastercard Mastercard recently announced 3. Accountability: Companies the launch of the Data must keep consumer interests at the Responsibility Imperative to centre of their data practices show how organisations can establish a core set of principles 4. Integrity: Organisations must guiding the ethical collection, minimise biases, inaccuracies, and unintended consequences management and use of consumer data. 5. Innovation: Ensure consumers benefit from the use of their data through better The initiative is based on the premise experiences, products and services that businesses have a responsibility to individuals and society as a whole, in 6. Social impact: Use data to identify how they manage their data. needs and opportunities to make a Mastercard is proposing the following positive impact on society six data responsibilities: These principles are meant to 1. Security and privacy: Organisations complement—and not substitute— must uphold best-in-class security and regulatory compliance. privacy practices Mastercard wants ‘corporate data 2. Transparency and control: Companies responsibility’ to become the corporate should clearly and simply explain how social responsibility of the 21st century. they collect, use and share customers “We’ve embedded this thinking into our data, and give people the ability to product development, and it will inform control its use everything we do moving forward,” said Dimi Dosis, president of Advisors, Mastercard. Case study Case © Copyright WARC 2019. All rights reserved. The CCPA has • Test and validate the online experience, the created a minefield everything from access burden is in on the industry. and there is much to requests to security It’s imperative that we to do in order to policies to data sharing make sure we’re using data responsibly in a way that comply. Calling for a national consumers anticipate and privacy law understand. To enforce The IAB recently released it, we are going to explain in the draft bill that we a CCPA Compliance This is an incredibly have the oversight of the Framework for Publishers complex area and we need Federal Trade Commission. & Technology companies. a national law. We need Here are some important rules of the road that are The misuse of consumer steps to take to comply nationwide because a data under this new CCPA with the CCPA: patchwork of state bills is regime could be the death bad for everybody, not just knell for a company. We • Do an audit of all your companies but consumers hope it won’t be, but this customer data and be too. If a customer boards a is why marketers must act meticulous in terms of plane at Dallas-Fort Worth now. knowing where your and gets off at New York’s customer information is JFK they will have a whole new internet experience. Read Dave Grimaldi’s full • Update your privacy A ‘patchwork’ scenario commentary in the Policy spin-off policy and your means consumers will report of the Marketer’s Toolkit The CCPA: disclosure notifications have to opt-in and opt- accordingly out in a whole new way Marketers must just because they are in a • Have mechanisms in different state. place to efficiently and act now effectively comply with What we want to do is consumer requests change the whole structure around accessing and around how consumers Dave Grimaldi deleting their personal understand their privacy data EXECUTIVE VICE PRESIDENT FOR PUBLIC POLICY, protections. So instead INTERACTIVE ADVERTISING BUREAU (IAB) of consumers having the • Provide a clear and burden of understanding visible link to an opt- the interplay between out notice on the home their data, privacy, and Expert commentary Expert © Copyright WARC 2019. All rights reserved. page of your site Many consumers feel a microphone or voice information if brands are brands don’t know assistant, providers of transparent about how it is them well enough to these devices will have used, up from 66% in 2018. serve them in a way to make clearer the value Consolidate the data that makes them feel exchange when they do you use special. collect this data, or there will likely be a backlash. Particularly in the case But when those brands Brands that treat data of digital advertising, seem to know too much – collection and data the data generated from and act on that knowledge strategy as part of the interactions with different – they can quickly consumer experience formats – from banner ads feel creepy and lose will benefit from greater to meta tags – usually sit consumers’ trust. willingness to share outside a brand’s purview. information. Opt for data gathering Consider your approach to within reason Be transparent in-housing first party data rather than having it sit with an external agency or other Brands can’t rely on To create a seamless third party. The benefit will regulators to set the experience, brands can be owning your customer pace for their policies. benefit from using fresh and marketing data and They need to take the opt-in alternatives to track generating better insights appropriate actions users, such as encouraging about your customers, Using data themselves. One such way consumers to authenticate ensuring compliance and is by limiting data gathering on websites and mobile delivering better value for to information they have applications, bringing ad your business. respectfully and a right to know, and they tech contracts in-house must provide value in and using transparent data Read Scott Tieman’s full responsibly exchange for that data. For collection methods. Brands commentary in the Policy spin-off instance, some brands may must also clearly state how report of the Marketer’s Toolkit have the ability to listen consumers may opt out. 2020 Scott Tieman to customers through their computer mics, but There is a real benefit GLOBAL LEAD, ACCENTURE INTERACTIVE should they? With 76% to doing this. Accenture PROGRAMMATIC SERVICES of consumers saying Interactive found that 73% they are uncomfortable of consumers are willing with data collection via to share more personal Expert commentary Expert © Copyright WARC 2019. All rights reserved. Further reading Case studies

Data Ethics, WARC, May 2019 The CMO of the future: Mastercard on getting it right in data and technology, WARC, June 2019 Navigating the CCPA: Anticipating the immediate impact and long-term pitfalls for the advertising industry, Gerard M. Stegmaier and Mark Quist, WARC, May 2019 FT sees revenue boost post-GDPR, WARC, 15 October 2019 Data protection regulation in APAC: What it means for marketers, Mark Parsons, WARC, May 2019

Walking a tightrope between privacy and personalisation in China, WARC, November 2019

Potential implications for marketing, measurement and ROI in a post-GDPR world, David Dixon, Sebastian Shapiro and Nicole Wolf, WARC, May 2019

Social media has too much power as public demand more regulation, WARC Data, May 2019

Three-quarters of consumers have limited their online footprint, WARC Data, April 2019

How to use data in an ethical way: Empower the consumer, Emma Firth, WARC, May 2019 Toolkit series

Digital growing pains: How context increasingly matters, Kristanne Roberts, WARC, September 2019 Marketer’s Toolkit 2020: Data Report

Marketers must shift from reactive to proactive when it comes to data privacy, Darren Policy report: Privacy-first marketing Abernethy, WARC, December 2018

What we know about data protection and privacy, WARC, July 2019

What we know about behavioural economics, WARC, September 2019

The convergence of brand purpose and data ethics, WARC, December 2018

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