Cutting Edge: Our Weekly Analysis of Marketing News

Cutting Edge: Our weekly analysis of marketing news

6 May 2015 Welcome to our weekly analysis of the most useful marketing news for CIM and CAM members. Quick links to sections

to look after their personal data while 27% of

Marketing trends and issues consumers would be prepared to sell their data. Some 62% of consumers are concerned about Advertising companies misusing their data, 28% are worried Reshaping advertising with digital about their TV “eavesdropping on conversations”, Advertising is being reshaped by the enormous and 39% are unhappy about their mobile phone volume of data from set-top TV boxes, credit card revealing their location. Nevertheless many purchases, online profiles, loyalty card programmes, consumers said they were interested in receiving etc and by the technology which allows marketers to advertising messages based on location data and access, analyse and implement that data. Targeting 62% said they were interested in nearby special allows marketers to demonstrate their efficiency and offers. Claire Spencer, head of insight at IPG, claims that they’re not wasting valuable ad spend on that “marketers have become data hoarders.” people who are unlikely to become consumers. research-live.com, 30 April 2015 However, Lisa Barnard of Ithaca College, has identified a “creepiness factor” which even digital Brands and branding natives don’t like; this is the realisation that tailored Placing a value on a brand online ads are being marketed specifically to you. It is difficult to establish exactly how much a brand “Just because we have that information, we is worth. Brand consultancies aim to help companies shouldn’t go ahead and use it all the time in all resolve this problem by applying their own cases,” she warns. methodologies. It may soon be possible to develop a Financial Times (The Connected Business), 29 April 2015, “consistent and transparent” standard which p1-2 companies can use in-house. Currently there is a

distinction between brands that are created Significance of communion internally (“self-generated” brands) and “acquired” In advertising women are stereotypically portrayed brands in the eyes of the various accounting as communal and men as agentic. However existing authorities. The author refers to an article about research has shown that advertising effectiveness is brands as assets from the Journal of Brand higher when endorsers are portrayed as communal, Management which argues that a coherent system whether male or female. This research underscores for brand evaluation would help investors to the significance of communion on advertising discover exactly how substantial a company’s assets effectiveness but also shows that attitude toward really are. In the meantime the author (a professor the brand is influenced by endorser likeability and at INSEAD Business School in France) is working attitude toward the ad. with colleagues to develop a model for a reliable International Journal of Advertising, Vol 34(2) 2015, system of brand evaluation. pp285-306 (Infanger and Sczesny) Journal of Strategic Marketing, April-May 2015, pp38-39

(Niessing) Consumers don’t trust advertisers with data A new study of consumer privacy and data from IPG Brand ambassadors Mediabrands Marketing Sciences and UM London Celebrity endorsement has a long history but the reveals that only 1% of consumers trust advertisers evolution of social media’s buying influence has

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Cutting Edge: Our weekly analysis of marketing news

changed the rules. Women dominate social networks the vendor’s cross-unit business collaboration and its and this spells a potential bonanza for companies effect on sales lead performance. The research was which get their celebrity marketing right. Successful conducted in a large IT company which sells influencers need to have a large number of followers integrated solutions. The analysis reveals that close who are targets for a particular brand and be active collaboration with customers increases the likelihood on social media sites in their own right. Old of sales leads being cancelled. Therefore a selling fashioned risks of scandal or reputational meltdown approach which focuses on close collaboration with remain but new ones have arisen too, according to customers may not be a good way of improving hit Mark Sinnock, chief strategy officer at M&C Saatchi, rates. The implications are discussed. “Trying to maintain too much control can result in Industrial Marketing Management, Vol 45 2015, pp49-58 forced content that could ignite a backlash from (Virtanen et al) influencers and their audiences”. Financial Times (The Connected Business), 29 April 2015, What is wrong with loyalty programmes? p2 A global report entitled: Fixing the Cracks: Reinventing Loyalty Programmes for the Digital Age, Storytelling examines why active participation rates in loyalty Brands want people to care about their ads and programmes are low and why 89% of social media storytelling can help to transfer emotion from the ad opinion about loyalty is negative. The Capgemini to the consumer. Emotional ads can attract 12% Consulting report reveals that only 11% of such more consumer involvement than those which schemes offer personalised rewards based on contain only rational content according to Millward purchase history or location data, while 79% use a Brown. However, not all advertising gets it right and mobile channel but only 24% allow redemption it is more important to elicit the right reactions than through that channel. The report recommends that to have an emotional strategy. In order for stories to a loyalty programme should be part of the wider take advantage of the way the human brain marketing scheme for customer engagement. processes them, there are five factors that should be Database Marketing, April 2015, p18 taken into account. These are explored here. Admap, April 2015, pp40-42 (Walker) Customer data – the trust factor Companies collect large amounts of customer data Conferences and events but lack transparency in what they collect and resell. Handling meetings Although this may give them a short-term It is a common problem to get to the end of a advantage, it undermines customer trust and meeting and realise that you have failed to customers’ willingness to share their information. A contribute anything. Here are a few brief tips for survey of 900 people across five countries showed making the most of meetings. They include deciding that the value consumers place on data depends on whether you actually need to attend in the first what it is and how it is used. Consumers believe that place; being fully prepared to put forward a strong if data is used to improve a product, then it is a “fair viewpoint rather than sitting on the fence; and trade” but, if it is used for marketing, then they avoiding the criticism of others. expect something in return especially if it is sold to a Management Today, May 2015, p15 third party. Companies should be more transparent and offer consumers something appropriate in Data – the key technology exchange for their data. Those which incorporate Technology is fast becoming an essential ingredient fairness into their models and products will win of successful events: gadgets such as virtual reality consumers’ goodwill as well as having access to headgear, holograms and 3D printing can enhance their data. Those who don’t will be at a an event but one of the most important technology disadvantage. assets is data. Data makes it easier to evaluate what Harvard Business Review, May 2015, pp96-105 (Morey et is or is not working during the various stages of the al) event. Sophisticated event management software enables event managers to use data analytics for Direct marketing assessing performance even before the event takes Integrating direct mail with digital media place. This enables them to improve the content and Direct mail can become more effective when format as well as maximising attendance. combined with digital channels. To enhance the eventindustrynews.co.uk, 30 April 2015 performance of direct mail, marketers should integrate it with new and emerging digital channels. Customer relations Four examples are described: direct mail and online advertising; cross-channel marketing via e-mail and Collaboration and sales leads direct mail; PURLs (personalised URLs), which are This study investigates the complexity of the B2B unique web addresses that form the basis of sales situation in three contexts: relational marketing campaigns using direct mail, e-mail, and complexity; complexity of internal sales tasks; and

mobile channels; and QR codes or augmented foxes”). This group – the Baby Boomers born reality. between 1946 and 1964 – is not homogenous and dmnews.com, 30 April 2015 no single label can be applied to them. So how can brands address this group? This article elicits the Law opinions of various experts in the field. Stuart Walsh Consumer protection from Iconclast uses KFC and Bells Whisky as The credibility of market research rests upon respect examples of brands whose campaigns may have got for consumer privacy. Consumer protection it right. The “Generation World” study by ad agency legislation helps to supplement data protection and Y&R argues that age is becoming irrelevant in provides a quality check for the research industry. marketing. European authorities are beginning to look at the Journal of Strategic Marketing, April-May 2015, pp42-46 links between consumer protection and data protection as well as the use of consumer laws to Content marketing enforce improved privacy compliance. In Britain this Content marketing is on the increase in the Middle is reflected in the work of the CMA and ICO. The UK East and the region has some of the world’s highest Consumer Rights Bill takes effect later this year, but download rates for YouTube. Brian Scudder, of the there are some other recent pieces of legislation agency Switch Global, says that businesses need a which are useful in protecting personal data, such as strategy for linking up their channels and creating the Consumer Protection (Amendment) Regulations really good content to fill those channels. But many 2014 and the Consumer Contracts Regulations 2013. companies are still working in silos so it is difficult Their significance is explained here. for them to decide who should be driving content Impact, April 2015, pp82-83 (Goddard) marketing strategies. Brands in the region that are benefiting from content marketing include Nestlé, Innovative start-ups can flout the law Marks & Spencer, Samsung and Dubai World Trade There is often friction between innovating firms and Centre, which have all invested heavily in the genre. regulators, recent examples being Uber and Airbnb. Gulf Marketing Review, April 2015, pp20-24 There are two main reasons for this: firstly innovating companies use digital technology to Keeping it simple address heavily regulated parts of the service In this opinion piece, Hugh Fletcher, digital economy which are ripe for disruption. Secondly marketing manager at Audi UK, voices his support there is pressure to get to market early and grow for “Kiss” (“Keep it simple, stupid”). Everyone likes quickly even at the risk of legal challenges. This simplicity because it assists and speeds up strategy can be risky as music-streaming service understanding which in turn leads to better Napster found out. Such companies need to be decisions. This even applies to the complicated capable of moving rapidly towards a new strategy world of digital marketing. Yet, as an industry, should legal circumstances dictate. marketing tends to do the opposite by dreaming up The Economist, 2 May 2015, p64 acronyms, giving new names to old disciplines or bestowing complex titles on simple activities. Irish data regulation Ultimately “keeping it simple” suggests that you The Irish Data Protection Commission is increasingly understand a concept enough to explain it to dealing with data protection complaints from non-US someone and that you have the skill to summarise users of Google, Facebook and Apple. Twitter is the and communicate it effectively. latest company to have submitted to Ireland’s data Marketing, May 2015, p25 protection agency. Ireland’s Commission lacks the resources of its peers in Paris, Berlin or Amsterdam Crowdsourcing yet it regulates 29 out of the 30 largest technology Marketing is increasingly using crowdsourcing to businesses in Europe. It also takes a low-key outsource a creative task. Research firm Gartner approach – collaboration rather than confrontation – believes that crowdsourcing is one of the fastest- when communicating with the big US tech growing solutions to talent and skills shortages and companies. Not everyone is happy with Ireland’s that over 75% of high-performing businesses will be methods but new data protection laws are expected using it for some kind of business service by 2018. to be completed by the end of this year which will This article takes a look at the pros and cons of be binding on EU member states. outsourcing for marketers, provides some useful tips Financial Times, 29 April 2015, p16 and a list of dos and don’ts. The Marketer, May-June 2015, pp39-41 Marketing Targeting the silver foxes This article looks at the complexities of targeting the 50-plus consumer in South Africa (the “silver

Market research Korea. It found that the fit between the sponsor and Revisiting the tracking study the sports event enhanced brand loyalty and This article, part of a series of features on some of customer equity through having a favourable effect market research’s traditional approaches, turns its on attitude towards the brand. However, there were attention to the tracking study. Continuous, survey- differences between the two countries. For example, based tracking programmes have been used for in China the sponsor’s fit did not have a direct many years as a way of measuring brands, their influence on brand image while Koreans had a more markets and customers. The tracking study has its positive attitude toward the sponsoring brand which pros and cons but there are a number of factors positively influenced their brand preference. which are driving change in tracking, notably a International Journal of Advertising, Vol 34(2), pp307- business environment that requires faster insights 326 (Liu et al) for rapid decision-making; changing expectations in response to the increased availability of consumer Agriculture, fishing data; and squeezed company margins. The author identifies six key themes which he believes will and forestry disrupt the way that trackers are undertaken. British farmers need greater output research-live.com, 1 May 2015 (Strong) Some farmers are investing in technology and embracing best management practices, such as Audience measurement benchmarking, to improve productivity. But not In both Europe and the US various industry enough farmers in the UK are taking these sorts of associations and research suppliers have been measures. Although the country has high wheat working to find solutions to online audience yields, they have not improved over the past decade measurement. Three key issues have been and British agriculture is described as a laggard identified: advertisers want to know how many compared with some of its competitors. The people they reach and how often; they need to National Farmers Union blames the Government for connect with their target group; and they want their cuts to funding of agricultural R&D, which has fallen ads to be viewable instead of just served by 6% per annum over the past 20 years. impressions. When robust solutions are found, they Management is also a key factor – Britain has a high should be implemented across markets to prevent proportion of “gentleman” farmers who are more the development of incompatible systems. concerned about lifestyle than making a commercial profit. Research World, March-April 2015, pp16-18 (Mareck) Financial Times, 29 April 2015, p4 Public relations No such thing as bad publicity? Sugar leaves a bitter taste There’s a widespread assumption that being A group of small, sustainable farmers, known as the implicated in a scandal is detrimental to brand- Landworkers Alliance (LWA), were protesting outside building efforts by (or using) celebrities. The authors British Sugar’s Bury St Edmunds facility last week argue that this is often misguided: celebrities who claiming that Associated British Foods (ABF) controls court scandal can find that the resulting media “all of the sugar processing in the UK”. The group, coverage, especially if it’s spun successfully, can which argues that you can’t grow organic sugar beet increase brand value. They support their assertion in Britain and get it processed, says that the profits firstly by reviewing the literature on celebrity should go to local communities rather than ABF scandal and then by demonstrating that the creation shareholders. LWA, which campaigns to raise the of a scandalous narrative can fuel a celebrity career. profile of small-scale producers and family farms in The example they choose for illustrative purposes is the UK, also wants small producers to increase Russell Brand, the comedian and would-be domestic production of fruit and veg. It says that revolutionary. They conclude that the three Cs of his 90% of fruit and 45% of vegetables consumed in scandalous narrative – crafting, capering and the UK are imported. commodifying – have combined to gain him entry fwi.co.uk, 30 April 2015 into the upper echelons of celebritydom. Journal of Marketing Management, Vol 31(5-6) 2015, pp546-576 (Mills et al) Businesses and strategy Innovation in family firms Sponsorship This study aims to extend the scope of previous Sponsorship differences – China and Korea research on the topic of new product portfolio The aim of this study was to examine the effects of innovativeness in family firms. Previous research has sponsorship on customers in South Korea and China, focused on the organisational context (ownership by to establish whether current research on top management team family members) to predict sponsorship can be applied to Asian countries and innovation behaviour in family firms while ignoring whether the model differs between China and South the preferences and behaviour of the CEO. This

research, conducted among a sample of German manufacturing SMEs, reveals that the propensity for CEO risk-taking has a positive effect on new product Charities and NGOs development innovativeness. It also suggests that Effective e-mail in times of crisis the organisational context of family firms affects the This article looks at how charities use e-mail relationship between CEO-risk taking and new marketing to raise funds in times of crisis, using the product portfolio effectiveness. earthquake disaster in Nepal as an example. It identifies a number of things that work in such e- Journal of Product Innovation Management, Vol 32(3) 2015, pp334-348 (Kraiczy et al) mails and that should be considered by other charities on other occasions. The advice is distilled into six main points: finding fast ways to create Knowledge acquisition – internationalisation trust; imparting a genuine sense of urgency; This study looks at how the acquisition of knew conveying a sense that something will be done and market knowledge is managed in the context of the money won’t be wasted; establishing a credible businesses that are growing internationally beyond personal connection; focusing on a clear objective; the original market entry. It is based on 144 and making the communication short and to the “internationalising” Swedish companies operating in point. the Baltic States, Poland, Russia and China. Four knowledge acquisition strategies are identified and dma.org.uk, 1 May 2015 analysed to show the effect of strategy on market knowledge. This reveals that companies which focus Durable consumer goods mainly on internal or external sources have equal Spiraliser effect levels of knowledge about the market while those The popularity of the spiraliser, a kitchen gadget for which actively exploit all available sources have the cutting raw vegetables into ribbons and curls is highest level of knowledge. It concludes that the being held responsible for the increase in the sales understanding of internationalisation behaviour of vegetables by the supermarket chains. Marks & relies on sources of knowledge other than simply Spencer has reported courgette sales up by 20% direct experience. compared with last year, while at Sainsbury’s they’re European Management Journal, Vol 33(2) 2015, pp79-88 up by a third year-on-year. Louisa Read, an M&S vegetable buyer, explains, “Customers are using Frugal fun spiralisers as an easy way to reach their five a day”. Gamification, borrowed from the consumer world, is Patrick Keane, Waitrose vegetable buyer, points out becoming an increasingly popular way to change that “they are perfect for secretly hiding vegetables employee behaviour and save company money by in popular children’s meals”. rewarding good behaviour rather than punishing bad The Guardian, 30 April 2015, p37 behaviour. One example is Opower, an American energy software company. In its business travel Old console offers new Spectrum scheme, employees have to beat the budget for The ZX Spectrum, a 1980s games console, is being their trip by, for example, staying with friends or brought back from extinction having raised £150,000 relatives or taking connecting flights with extended via a crowdfunding campaign. The new Spectrum journey times. In return they get to keep 40% of Vega will run thousands of games, including Hungry the savings. The company keeps track of who is Horse and BMX Ninja, and users will be able to plug saving the most and publishes a weekly league it into their TV to play. The company behind the table. product’s resurrection is Retro Computers chaired by Financial Times, 1 May 2015, p12 Sir Clive Sinclair. The first consoles will be distributed at the end of May. Successful coalitions The Independent, 4 May 2015, pp16-17; The Observer, 3 British politics may have just become accustomed to May 2015, p16 the idea of a coalition but businesses have been collaborating for years. Coalition-building has Hornby steams ahead with profit become an important corporate skill and can be UK toymaker Hornby has reported its first pre-tax profitable if it is done well. The author reveals five profit since 2012. The company, which has been laws of successful coalition: they are not fixed around for 114 years, is responsible for brands such entities and represent the coming together for a as Scalextric and Corgi. It has been suffering from common purpose or joint-venture; their purpose supplier problems in China and a loss on souvenir must be clearly defined; all members must gain from products which it produced for the London 2012 the situation; trust and transparency are vital; and Olympics. they should be disbanded when the objective has Financial Times, 2-3 May 2015, p16 been achieved. Five coalition leadership lessons are also provided. Management Today, May 2015, pp30-35 (Reeves)

Economy prices. Financial Times, 1 May 2015, p17 Financial well-being

Mintel has produced an economic analysis based on Global warming – a matter of opinion the sentiment of British consumers and considers issues such as whether the financial feel-good factor This year world leaders will meet at the United Nations summit in Paris to discuss climate change. will return in time for the general election. Key This special report looks at the implications of the findings include the fact that average wages have Paris summit and the facts and fiction surrounding started to increase more quickly than prices but that global warming. It includes an Opinium/Observer people’s assessment of their financial wellbeing has hardly changed since the beginning of the year. This survey of the British Public’s attitudes to it which reveals that only 5% consider environment to be is reflected in the significant gap which exists one of the three most important issues facing Britain between higher and lower earners. Although in the General Election. Only 20% of the UK public Millennials have had a tough time during the believe that politicians will agree a long-term plan recession, they are making the best of it and are among the most optimistic about their financial that will help to keep global warming at “acceptable” levels. Other results of the survey are set out prospects. graphically. The Economic Tracker, February 2015, pp1-30 The Observer (Tech Monthly), 3 May 2015, pp16-21

Energy and utilities Financial services Mega-merger CSR image in Spanish banking Some of Royal Dutch Shell’s institutional This article describes a model for understanding the shareholders are questioning the wisdom of the way in which customers of the Spanish banking company’s bid for BG Group, particularly the scale of industry form their perceptions of corporate social the deal and its valuation. However Shell argues responsibility (CSR) image. The findings, from a that the underlying logic is sound and that the study of 1,124 customers, enable the authors to strategic fit is very good. Simon Henry, CFO of Shell, predict CSR image based on three factors: the claims that post-merger integration should be congruence of the company and its CSR activities; relatively uncomplicated because BG has a the motivations of the company to implement CSR; comparatively small workforce, so significant job and corporate credibility in developing CSR cuts are not envisaged. Shell hopes that the deal will initiatives. In addition they deduce that collectivists be completed early in 2016. and innovative customers process the information in The Times, 1 May 2015, p46 a different way from individualists and conservative customers. Apple takes bite out of Chinese renewables Journal of Financial Services Marketing, Vol 20(1) 2015, Last month Apple announced that it would be pp46-61 (Pérez and Bosque) investing in two solar ventures in the Sechuan province of China. This represents the largest deal Mobile payments up by 39% of its kind for an American company in China but will New research suggests that 27% of all online represent a very small part of China’s overall payments were made by mobile during the first renewable energy plans. By 2023 China expects its quarter of the year, up by 39% year-on-year. renewable energy to generate more power than the Mobile-based online payment transactions are most US national grid. popular in the UK: in the first three months 44.4% Bloomberg Businessweek, 27 April-3 May 2015, p32 of transactions in Britain took place via a mobile device while 28.6% of online payments in Europe Environment and 26.7% in the US were made via mobile. Asia Plastics recycling in meltdown exceeded the 20% mark for the first time. The Manufacturers of plastic containers are using new research was conducted by mobile payments material because of a slump in oil prices: the price company Adyen. of polyethylene terephthalate (PET) has fallen from mobileeurope.co.uk, 30 April 2015 £1,013 a tonne last August to £840 in March. This has been a blow for the plastics recycling industry FMCG and some companies have already collapsed. The industry is currently worth about €2 billion in Europe Beverages where there are around 1,000 companies employing Coffee pods bad for sales 30,000 people. Surveys suggest that people in the Single-serve coffee machines are resulting in more UK would support laws that would force bottle efficient coffee-making which is not good news for manufacturers to include recycled material in plastic the coffee industry. A great deal of coffee is sold in milk bottles even if that would mean paying higher

plastic pods which means that fewer people are thousands of people have died because the food brewing up big pots of coffee and throwing away industry was allowed to give up on the salt reduction what they don’t drink. Single-cup coffee has been drive. After 2003 food industry companies cut up to reducing overall demand for the commodity. Even 40% of the salt in many foods and as a result the though the US drinks more coffee than any other average Briton’s salt intake fell by 15% to 8g a day. country, consumption growth is expected to slow by Campaigners claim that progress ceased after 2010. 1.8% in the US and Canada in the 12 months to Regulation is needed to force salt down further, September. according to Prof MacGregor, chairman of Bloomberg Businessweek, 27 April-3 May 2015, pp39-40 Consensus Action on Salt and Health. Barbara Gallani of the Food and Drink Federation points out Cognac maintains strength in US that, “companies are finding reductions harder to Demand for cognac declined last year in the wake of achieve without compromising product safety or China’s crackdown on luxury products. However, jeopardising taste, texture and shelf-life”. Hennessy, the world’s largest cognac maker, saw The Times, 29 April 2015, p6 exports to the US rise by 13% last year. The US makes up around a quarter of the company’s sales Processed foods – the need to adapt but this isn’t enough to offset declining sales in Processed food manufacturers are under pressure China. The company is turning its attention to from policymakers, campaigners and the public. markets such as Vietnam and Nigeria. Kraft, which has announced a 16% fall in profits, Bloomberg Businessweek, 27 April-3 May 2015, p21 and other producers are losing out to smaller food companies that are making healthier products. A taste for aperitifs Meanwhile consumers who are less fussy about Beyond the biggest distillers, like Diageo, the global health issues are opting for cheaper supermarket spirits industry is still fragmented with many family- brands. The health trend has presented start-ups owned brands. Of these, Campari, is one of Italy’s with new opportunities. Meanwhile companies such most international family groups after prolonged as General Mills and PepsiCo have been downsizing diversification. In the last eight years Campari has while others are trying to reformulate their products spent €1.5 billion adding to its five main brands to address health concerns. Alternative strategies which include Cinzano, one of the world’s oldest include buying up small, healthy food brands, spirits brands dating back to 1757. CEO, Bob Kunze- consolidation or cost-cutting. Processed food may Concewitz, points out that generational change well find itself learning from the tobacco companies’ prompts constant re-positioning as brands go in and experience… out of fashion, while a crop of innovative start-ups in the USA have widened the availability of acquisition The Economist, 2 May 2015, p63 targets. Now, however, he claims that his main aim is to take the company’s top brands and extend their Tobacco footprint internationally. Going up in smoke Financial Times, 1 May 2015, p12 British American Tobacco (BAT) has put up its prices to compensate for a growing decline in smoking. In Cosmetics and toiletries the first quarter of the year the volume of tobacco sold fell by 3.6% to 152 billion cigarettes. This Beauty vlogging compares with a 1% fall in the same quarter of The number of make-up, hair and skincare videos 2014. In particular the company suffered falls of on the internet is growing so rapidly that their 11% in Russia, 5% in Vietnam. In Brazil, where it is number has reached the millions. Among the most- planning to acquire local market leader Souza Cruz, watched YouTube videos, they have developed from sales fell by 6%. their teen origins to containing content for professional women who have plenty of money but Financial Times, 30 April 2015, p24 little time. Last year a vlog featuring a model in her sixties made the front page of Mail Online. Research on behalf of Clinique has identified four needs that beauty vlogging fulfils. Some experts believe that there is a huge male audience out there too! The Financial Times (How To Spend It), May 2015, pp45- 46 Food A pinch of salt Pressure on the food industry to reduce the salt content of processed food shows no sign of easing. According to calculations published in the BMJ,

gap between the top and bottom 1% of life Government and expectancies of different local authority districts will public sector also rise. Review of political advertising research The Times, 30 April 2015, p12 The author argues that, although there has been plenty of research into political advertising, the body Silk applications – smooth operations of work lacks direction. He analyses 129 research Physicist Fiorenzo Omenetto’s Silk Lab is using silk articles on the use of advertising in elections and to develop health applications, including silk-and- uncovers eight main themes. He also identifies gaps penicillin cards which can be placed under the skin in the literature and makes six recommendations for to provide controlled drug delivery. Massachusetts- future research. based Vaxess Technologies is already using silk to International Journal of Advertising, Vol 34(2), pp195- create vaccines which can be stored and transported 231 (Van Steenburg) without refrigeration. Other medical applications for silk are being explored. Silk can also be used for Data mining for votes biodegradable packaging and flexible screens. With predictions for a hung parliament as the Wired, May 2015, p24 outcome of the General Election, it will be the undecided or uninterested voters who need to be Generics – consolidation could force up prices mobilised. Political parties are increasingly using There are growing efforts at consolidation in the data mining to get to these voters. Barack Obama’s generic drug industry: Netherlands-based Mylan has 2012 campaign showed how important it was to just rejected a $40-billion bid from Teva of Israel have a data team to target certain voters. But it is while Mylan has made three attempts to buy Perrigo much harder to replicate the Democrats’ data model of Ireland. There are worries that consolidation in the UK due to campaign spending restrictions, could lead to a rise in the price of generic drugs. In data protection laws and other factors. The big emerging markets, such as India, spending on drugs difference this year is the use of Facebook is growing and prices are a concern. Yet generics advertising for exploiting data. The door-to-door have brought down the cost of medicines by canvassing with a clipboard is only slowly being competing with branded drugs. Antitrust authorities replaced with tablets, phones and apps. Kanto is an will be keeping a careful watch on generics firms. app which allows canvassers to log voters’ interests The Economist, 2 May 2015, pp61-62 to the cloud. New Scientist, 2 May 2015, pp20-21 IT and telecoms The political ad scene – a shift to digital Google gives strongest connection The UK’s political parties are still importing ideas One of Google’s latest ventures is ProjectFi, a mobile from the US but in this election the methods are network which automatically selects the strongest digital and the platforms are Facebook, Twitter and connection available, whether it be a cell network or YouTube. This is the first time that the political Wi-Fi, and routes calls, texts and data through it. parties have invested heavily in paid-for advertising Currently the service only works on the Google on Facebook and YouTube. Direct mail and door Nexus 6 phone. drops continue to play a key part in the campaign, New Scientist, 2 May 2015, p21 but spending on other forms of traditional media is less than it was for the 2010 election. A key feature Amazon – needs to keep its head in the clouds of this election is the use of online video, allowing Amazon Web Services (AWS) has made cloud parties to circumvent the ban on paid-for political TV computing services mainstream and is estimated to ads. earn around ten times that of its closest competitor Financial Times, 30 April 2015, p2 Microsoft. Hardware companies, such as Dell, IBM and Hewlett-Packard have struggled to keep up with Amazon’s service. Microsoft and Google have built Health and pharmaceuticals data centres that can rival Amazon’s, but this has Longevity resulted in a price war which has driven down the Women have traditionally lived longer than men but price of data storage. To continue growing, Amazon new research from The Lancet suggests that by will need to attract large companies away from their 2030 men are expected to live almost as long as in-house data centres as well as keeping their women, increasing from 79.5 in 2012 to 85.7 in developers happy. It faces challenges from start-ups 2030. The corresponding figures for women are 83.3 such as DigitalOcean in New York. in 2012 and 87.6 in 2030. The researchers attribute Bloomberg Businessweek, 27 April-3 May 2015, pp30-31 the narrowing gap to the decline in manual labour and the increase in unhealthy behaviour among women. The same research also predicts that the

Smartphone sales Chatwin inspires Burberry for designer books During the first quarter of the year global Vintage is to publish a limited edition box set of smartphone sales rose by 21%, according to Bruce Chatwin’s books in collaboration with Strategy Analytics. Meanwhile Samsung has Burberry. Burberry CEO and chief creative officer, overtaken Apple to regain its place as the biggest Christopher Bailey, has cited Chatwin as a source of seller of smartphones. A graph compares shipments inspiration for its spring/summer 2015 clothing of the four largest phone makers. collection, called “Book Covers & Bruce Chatwin”. Financial Times, 30 April 2015, p1 Each book will be cloth-bound with an exclusive Burberry design and will be sold at selected Burberry stores around the world. Vintage has taken part in Leisure and tourism other third-party collaborations, such as a Vivienne Navigating the institutional logics of markets Westwood-designed cover for Alice’s Adventures in This article examines the evolution and competitive Wonderland. dynamics of the US yoga market, illustrating the co- The Bookseller, 1 May 2015, p21 existence of spirituality, medical, fitness and commercial logics. The authors offer a managerial Film framework for managing the conflicting demands of Studios try to replicate Disney’s Marvel logics, conveying brand legitimacy and creating a Walt Disney’s Marvel Studios has made a success coherent brand identity in plural logic markets. They out of “cross-pollinating” its films with common also develop a theoretical account of the links characters, settings and plot elements, which has between institutional logics, competitive dynamics resulted in its ten Marvel films raking in $7.2m at and market evolution. the box office. This has also enabled Disney to Journal of Marketing, Vol 79(2) 2015, pp40-61 (Ertimur expand outside the big screen – the Agents of and Cocskuner-Balli) S.H.I.E.L.D. series appears on Disney’s ABV TV network. Other studios such as Time Warner, owner China cruising of DC Comics, have noted Disney’s success and are The cruise markets in the US and Canada are trying to copy the strategy. Analysts warn that reaching saturation point and large cruise companies studios’ “nearly identical” franchise strategies could have been turning their attention to China. In 2006 damage the film business. Costa Crociere, owned by Carnival, became the first Bloomberg Businessweek, 27 April-3 May 2015, pp19-21 company to enter China, followed by Royal Caribbean in 2007. The companies are battling it out Internet to provide on-board experiences that Chinese Two-sided internet platforms tourists, who are not short of money, are Multi-sided platforms are defined as those which demanding. Last year around 70,000 Chinese went bring together two or more distinct yet on cruises compared with 10m Americans but the interdependent groups of customers, typically B2B numbers are increasing rapidly. Cruise terminals are and B2C. The aim of this paper is to understand the popping up around China. development of the marketing strategies of internet Bloomberg Businessweek, 27 April-3 May 2015, pp50-57 start-ups towards business and/or end consumers and the contributions of both B2B and B2C in the Media creation of value. The authors propose a model for the development of marketing strategies and Books business models of two-sided internet businesses. Five early stage internet businesses are analysed to A good read reveal a pattern of evolution from B2C towards B2B Until recently audiobooks seemed to be a product and then to an integrated combination of B2B&C with no future but since 2011 sales have doubled on and B2C&B. This shift is attributed to a change in the back of the increase in mobile devices and have the influence of different business stakeholders. become one of the fastest-growing ways of Industrial Marketing Management, Vol 45 2015, pp139- consuming fiction. Richard Mollet, chief executive of 150 (Muzellec et al) the Publishers Association, says: “Now you can listen on the move wherever you are…previously, to buy Social media an audiobook you were shackled to where your CD Twitter reduces tweets to attract users or cassette player was”. However the consumer Twitter appears to have plateaued at 200m users, book market is worth about £1 billion and around a fifth the size of Facebook. A major problem audiobooks with sales of £10m remain a very small is that the social network requires people to spend a slice of the pie. lot of time maintaining a feed and reading tweets: The Times, 29 April 2015, p21 the company’s product team is looking at ways to address this. Twitter’s new “Highlights” feature curates around a dozen of the tweets which it thinks

© Copyright 2015 CIM 9 Cutting Edge: Our weekly analysis of marketing news will be most interesting in the morning and evening, Television and delivers them as a personalised service to the BBC – understanding audiences user. The BBC has huge audiences and deals with vast Bloomberg Businessweek, 27 April-3 May 2015, p34 amounts of data. This article examines how the Corporation is using research to help it keep up with Social media advertising technological change and to understand what its In the form of an infographic, the FT compares viewers want. James Holden, director of marketing different social media as advertising platforms. and audiences for BBC News, says that the research Facebook is by far the largest with a colossal 1.4 challenge for the BBC remains the same as it was in billion monthly active users, 70% of whom log in 2000. He describes some of the BBC’s research daily. The demographic is young – 76% are aged initiatives. There are also contributions from David 18-34 – but advertising is becoming more Bunker, head of audiences at BBC Television, Nick expensive. Although Twitter doesn’t allow as much North, director of audiences and Chris Mundy of targeting as Facebook, because people like to tweet Clearcast. while watching television, advertisers are able to Impact, April 2015, pp44-48 (Fisher) create ‘two-screen’ campaigns combining TV and Twitter. Advertisers like LinkedIn because it gives Where next for Comcast? them access to a professional audience with twice In the USA cable and broadcast packages are under the buying power of an average web audience but increasing pressure. Consumers are deserting linear users log on less often than with other networks. On television for new, cheaper, on-demand channels. YouTube viewers often skip the adverts and brands Netflix already has 60m subscribers. Apple is can’t request a specific slot. In short the different stepping up its presence in online TV, while Amazon social media have their own advantages and has also got into the digital video business. These disadvantages for advertisers and new plans and were the reasons why Comcast was so keen to initiatives promise to offer new openings for acquire Time Warner Cable and give its 30m advertisers in the near future. subscribers access to those new services. However, Financial Times (The Connected Business), 29 April 2015, after 14 months the regulators decided that the tie- p3 up was not in the public interest. Analysts suggest that Comcast, which has a minimal television and Empathy on Twitter internet presence outside the USA, may look Most large Western companies use Twitter for overseas for expansion. Chief executive, Brian marketing purposes and/or to communicate with Roberts, doesn’t shy away from big deals and a customers. The FT cites the Lady Geek Empathy successful bid for Sky would give Comcast Social Media Index 2015, which lists the top ten immediate entry into the UK, Italian and German companies for using Twitter to create an emotional markets. Alternatively, media commentators suggest connection with customers, investors and Roberts might buy another content company. employees. The top places have been awarded to Financial Times, 29 April 2015, p9 Direct Line Insurance, Sainsbury’s, Next, American Airlines and Tesco. These are followed by Morrisons, Severn Trent, Royal Mail, Lloyds Banking Group and Video Barratt Developments. Some of these names would Video in a multi-screen era probably not spring immediately to mind when it Video ad spend is growing at 26% per annum, more comes to empathy! than double the 12% growth of total digital ad Financial Times, 30 April 2015, p2 spend, according to eMarketer. The author emphasises the need for a multi-screen video planning approach based on insights, opportunities Emojis become internet language of choice and challenges. The approach should examine how Acronyms and slang are out and emojis are in, each screen enhances and complements the other. according to researchers at Instagram. Cartoon-style This article includes data on the growth of video and “emoji” pictograms are replacing “wtf” and “rofl” as video advertising. a way of communicating emotions on the internet. It has found that emojis appear in nearly half of Gulf Marketing Review, April 2015, pp26-28 (Khaund) comments and captions on its social network. Some people believe that we are regressing into a form of Packaging pictorial language, such as ancient hieroglyphics. Light-emitting paper Emojli is an app which allows people to A team from the University of Sweden has created a communicate only in emojis. light-emitting display from paper. It is achieved by The Independent, 5 May 2015, p19 spraying six layers of materials onto a piece of paper, four of which carry a current and turn electricity into light. The paper, which can glow as brightly as a computer display, could be used to

make disposable displays for packaging or London ditched a rebrand earlier this year after newspapers using environmentally-friendly student opposition to dropping college from the materials. This could provide a viable alternative to name, while opposition to Warwick University’s new LEDs and OLEDs. Other applications include the logo has elicited a promise from the authorities that tagging of goods so that they light up when they are it will be used sparingly. near the end of their shelf life or the tracking and The Independent, 1 May 2015, p21 identification of packages. New Scientist, 2 May 2015, p17 Alumni donations British universities have a long way to go to create an American-style alumni culture. Only six Retailing universities received donations from more than 5% Unwelcome change of their alumni in 2014 and only a very small Argos is trying to shift its image as a downmarket number raise substantial sums from philanthropy. analogue retailer. So far 60 of the chain’s 755 Oxford and Cambridge together account for 41% of outlets have converted to the digital format and as a gifts. Nonetheless universities raised a record £807m result printing of the twice-yearly catalogue has from 183,204 alumni last year which represents a been reduced from 40m to 22m. The company is 21% increase over the previous year, while the hoping to halve that number again over the next five proportion received from individual donors rose from years. However, following adverse customer reaction 41% to 44%. According to Carolee Summers-Sparks with customers becoming confused, Argos has had a of the Council for Advancement and Support of rethink and has restored stocks of catalogues to its Education in Europe, “the rise in donors reflects the revamped digital shops. effort that higher education is putting into building The Times, 30 April 2015, p42 lifetime relationships with alumni”. The Times, 30 April 2015, p13 Services Zoopla finds a good deal on uSwitch Transport and travel Zoopla Property Group is paying £160m for price China turns to electric vehicles comparison site uSwitch. Together the two internet China’s government, which has decided to build brands get roughly 100m visits a year. Zoopla electric cars on the mainland, is actively encouraging argues that the combination is a natural step, foreign manufacturers and their local partners. creating a single portal where consumers can find Some 40 electric models will be available in China and manage their home. Both Zoopla and its larger this year according to Bloomberg estimates. Toyota, rival Rightmove have faced growing competition together with its partners Guangzhou Automobile from the recently launched OnTheMarket.com. Group and FAW Group, is to launch the Leahead and However, OnTheMarket has reported that 90% of Ranz electric brands. Other carmakers are working agents using its site have dumped Zoopla rather on EV joint ventures with Chinese partners. But than Rightmove. The stock market has responded analysts are sceptical as to whether unknown joint- positively with Zoopla’s shares jumping 16%. Robbie venture brands can attract large numbers of Capp, an analyst at UBS, described the deal as, “a customers. very attractive acquisition for Zoopla, with a strong Bloomberg Businessweek, 27 April-3 May 2015, pp21-22 fit at a reasonable price”.

The Guardian, 1 May 2015, p33 Military contract could change the industry Curbing appetites In the next few months a $50-billion-plus defence Taxi company Uber has launched a food service contract with be awarded by the US Air Force for a called UberEats in New York, Los Angeles, Chicago new long-range strike bomber, the B-3. This has and Barcelona. It will deliver a meal to customers raised the stakes for the companies that are battling within just ten minutes for a $3 to $4 charge. The to gain the contract. One team comprises Boeing food is delivered to the curb for convenience. and Lockheed Martin; the other is Northrop Gruman. The outcome could result in a shake-up of the New Scientist, 2 May 2015, p7 defence industry: if Northrop were to lose out,

investors may press for it to be broken up and this Protesting against new logos would leave Lockheed Martin in a powerful position. “A visually agile, dynamic image that will allow us to take advantage of advances in technology,” was The Economist, 2 May 2015, pp59-60 how Emma Leech, director of marketing and advancement at Loughborough University, described Keeping up with in-car connectivity the new pink octagon logo for the university. Others Ford has abandoned a project to develop driving were less sure and, after 12,000 people signed the seats which could detect heart attacks. It attributes Revoke the Rebrand petition on Change.org, the the change of plan to the superiority of wearable university has “paused” the project. King’s College technology. Ford and its competitors are keen to be

perceived as leaders in new car technologies. Ford has recently launched a people carrier which can read speed limit signs and adjust the speed accordingly. The motor industry is trying to keep up with consumer demand for connectivity but is threatened by competition from new entrants such as Tesla and Google. Written by CIM’s Knowledge Services Team Financial Times, 4 May 2015, p1 © Copyright 2015 CIM TfL invites Tube ad pitch Media companies are being invited to pitch for Transport for London’s £1 billion contract to manage The views expressed in Cutting Edge are not advertising on the London Underground and to necessarily those of The Chartered Institute of provide “more imaginative” experiences for Marketing. passengers. Graeme Craig, director of commercial development at TfL, says that, “Advertising is at the centre of our plans to innovate”. The current ad contract for the London Underground is currently owned by European ad company Exterion Media. The new, eight-year contract is likely to attract fierce bidding from the likes of JCDecaux and Clear Channel Outdoor. Financial Times, 5 May 2015, p4

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