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WARC TRENDS

TOOLKIT 2013(SAMPLE VERSION)>> How to respond to marketing’s biggest challenges

This is a sample version of Warc’s Toolkit 2013 Trend Report

Subscribers to Warc can download the full report at warc.com/toolkit2013

Warc Trends >> Toolkit 2013

Companies need to change the way they operate so that they are structured to adapt to these trends

© Copyright Warc 2013. All rights reserved. www.warc.com

During a time of constant change, and tight purse-strings in both corporate and consumer spending, the battle for share of wallet has never been more intense. Faced with constrained marketing budgets, busi-nesses are looking to improve their bottom line by ‘doing more for less’ and increasing their focus on the customer.

However, this isn’t one-way traffic – there have been several paradigm shifts in the last decade that have given rise to the empowered custom-er. The nature and affordability of mobile technology, data acces-sibility and computing power, social media and multiscreen digital inter-actions, to name but a few. Custom-ers have consequently never been more connected to businesses and their offerings.

While these macro trends afford a golden opportunity to create sustain-able competitive advantage through enhanced customer engagement,

Viewpoint The challenges of 2013they also bring with them their own challenges – the need to be trans-parent, trustworthy, sustainable and generally useful to society. Compa-nies need to change the way they operate so that they are structured to adapt to these trends. They should also recognise that getting the basics right with customers remains at the heart of this change.

The opportunities aheadTogether with Warc, we are very pleased to be able to explore the key marketing trends for 2013. Through our own research and breadth of cli-ent experience we have contributed insights to underpin the trends dis-cussed in this report, and given De-loitte’s perspective on how marketers can start to address the challenges and opportunities that lie ahead.

One thing is for certain: it will be another exciting year for marketing. We hope you find this paper thought-provoking and empowering in 2013.

Nick TurnerPartner, Deloitte Marketing & Insight Practice

http://www.warc.com/toolkit2013




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The Nike+ FuelBand is an example of ‘small thinking’

Several factors are combining to disrupt the marketing industry. Economic volatility, plus the

revolution in consumer technology, is changing consumer expectations of brands. The same tech develop-ments, plus the data they generate, are creating both opportunities and challenges for marketers. While these pressures are not new to 2013, they are developing fast, and brands are finding new ways to respond.

The squeeze on living standards will be a major theme this year. Confidence in the economic outlook dipped sharply across 2012, and that is reflected in expectations for marketing budgets in 2013.

There are signs that consumers are running out of patience. Data from The Futures Company reveals a sharp increase in anger among consumers, and a corresponding drop in trust of big business. Brands need to be clear about the value they offer for the price; but more than that, they need to show consumers they are trying to help solve the issues society faces.

One response is for brands to do something useful, and the concept of ‘branded utility’ is well established. There is now a lot of talk of ‘small

Executive summaryscreens, combined with access to data and content via the cloud, will throw up several challenges in 2013. Mobile technology is having a major impact on the path to purchase: one particular trend is ‘showrooming’, whereby shoppers compare prices or check reviews while they are in stores. This kind of behaviour under-mines traditional in-store marketing, and suggests the in-store approach should be aligned with areas such as search and social media.

The multiscreen challengeMedia consumption is also chang-ing. Multiscreening – or using a connected device while watching TV – is now a common activity. One response is to join TV campaigns up to areas such as search and online content. Brands such as Coca-Cola have taken multiscreen strategies further by using companion apps to turn TV ads into a promotional game. This is still an emerging area, and it may be worthwhile to take a test-and-learn approach.

The disruption to the path to purchase is also making content marketing a bigger issue for market-ers. Research suggests 2013 will see a lot of brands developing formal

thinking’, whereby brands look to embed products or services into everyday life, helping consumers set goals and achieve tasks. The Nike+ FuelBand is one of the best-known examples. The goal is to give brands a role outside of a normal campaign cycle. One way of achieving this is for marketing and product teams to work more closely.

2012 saw smartphones and tablets really go mainstream in markets all over the world. This proliferation of





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content strategies for the first time. With its ‘Stratos’ skydiving stunt in 2012, Red Bull proved the value of a long-term approach to content. Other advertisers such as L’Oréal have recognised the importance of provid-ing persuasive content (particularly video) at the ‘point of need’.

A new approach to socialMaking the most of social media remains a core challenge, but there was real progress in 2012. Several studies questioned the wisdom of using fan engagement programmes as a means to drive sales. Social media, they argue, is more likely to have an impact on sales if it is used to maximise reach (though fanbases may still have an important role in areas such as product innovation and testing). For its part, Facebook is keen for advertisers to focus on reach, as this looks set to become a key paid-for service.

The thinking around word-of-mouth strategies is also becoming more sophisticated. As a subject, word-of-mouth has been conflated with social media. But studies show most advocacy takes place offline, and can be sparked by a wide range of stimuli – including, in a Dettol

insight to develop relevant marketing programmes.

The data deluge allows marketers to personalise ads and offers. But ad-vertisers should recognise consumer concern about the way data is used. It is clear consumers are most open to personalised offers when they are in ‘shopper mode’. Another approach is to give consumers control over the process, for example by allowing a brand to access their social media profile; they are more likely to give their consent if brands promise to use that data creatively.

Executive summary (continued)

AT&T used Face-book profiles to

create personal-ised content

case from China, a pack innovation. The challenge for brands in 2013 will be to understand how word-of-mouth works in their categories and to respond accordingly.

One of the buzz phrases of 2012 was ‘big data’. In 2013, one of the top priorities for brands is using all the new data sources to produce action-able insight. An interesting approach is to use data to look for big patterns, rather than granular segmentation. Unilever combined data sources to pinpoint the moments consumers dis-cussed meal options, and used that





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CHANGING EXPECTATIONS OF BRANDS

Hard-pressed consumers are taking out their anger on companies. Brands need to show how they are making a difference in difficult times. That may mean a greater focus on corporate ethics and authenticity. It may also mean making consumers’ lives easier, and creating a useful presence in everyday life.

THE DISRUPTED PATH TO PURCHASE

Trends such as ‘showrooming’ and ‘multiscreening’ make the path-to-purchase more complex. It is important to review the ways shoppers now interact with brands. This may mean greater alignment of messaging – for example, in-store with mobile search, or TV with social media and e-commerce.

FRESH THINKING ON SOCIAL MEDIA

There is a lot of new thinking about the role of social media within marketing communications, and the way influence works. The upshot is that ‘social’ is a much broader topic than ‘social media’. Research suggests it is worth reviewing the impact of engagement strategies on social media, and looking offline as well as online for potential advocates.

FIRST STEPS IN ‘BIG DATA’

The opportunities of ‘big data’ are huge, but brands must tread carefully if they are to avoid being overwhelmed by numbers or alienating consumers through poorly executed personalisation. An interesting first step may be to select a small number of data sources and then to ask ‘big’ questions of how a category works – for example, how consumers discuss the category, and where the right moments to influence them might be.

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Four ideas to take from this report






SAMPLE CHAPTER

THE SMALL IDEA >> How can a brand embed itself into everyday life?





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1 Small thinking is an alternative to ‘big idea’-led campaigns. Its focus is on products or services that blend into a consumer’s everyday life, rather than disrupting it. The Nike+ initiative is one of the best examples.

2 The ‘fail fast’ culture of Silicon Valley is an influence on this way of thinking. Advertisers including PepsiCo have in-vested in small-scale tech innovations in an attempt to evolve their offering.

3 One way to think small is to focus on the product or packaging, rather than the communications. In many compa-nies this means aligning the marketing function more closely with the product innovation team.

4 A Tiger Beer initiative shows how con-tent can be used to embed a brand into everyday life. It released a quirky travel guide for tourists in Thailand, a target that was otherwise hard to reach.

KEY INSIGHTS

At a glance Small thinking

[The Nike+ FuelBand creates] a link so much stronger than any-thing you could ever say in com-municationStefan Olander, VP Digital Sport, Nike





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One of the most talked-about launch-es of 2012 was the Nike+ FuelBand. The initiative, which won multiple Golds at the Jay Chiat Awards, involves a wristband that tracks a user’s physical activity, turns it into points, then allows users to track progress and compare scores.

Nike describes the Nike+ pro-ject as ‘functional integration’: the embedding into society and culture of products and services that live outside a traditional campaign.

It is one of the most advanced examples of what some have called ‘small thinking’. This is an alterna-tive to ‘big idea’-led campaigns. The focus is on small ideas (even if they involve major technology innovation) that evolve over time and can blend into a consumer’s life. These ideas work because they fit into consumers’ lives, rather than interrupting them.

Small thinking reflects a dis-satisfaction with a campaign-led approach, and a shift towards an always-on relationship with consum-ers. It is an extension of branded utility (see also the creation of servile

An alternative to the ‘big idea’A guiding principle in small think-

ing is for products and services to evolve incrementally, rather than being launched fully formed. Airline easyJet evolves its digital service via “little and often” changes that over time cut costs and drive revenue.

The Nike+ FuelBand shows the power of reconnecting product inno-vation with marketing. Other brands take a ‘small’ approach via content – useful pieces of content that help consumers achieve goals. A nice ex-ample from Honda involved helping consumers make ‘leap lists’ – lists of things they wanted to do before the next major milestone in their lives.

brands). And it reflects a desire to build ‘participation brands’, which have consumer participation built into their DNA.

Despite all the theory, putting small ideas into practice is tough. Never-theless, some brands have taken in-teresting steps in this direction. One trend is for companies to borrow from Silicon Valley’s playbook: PepsiCo, for example, runs a PepsiCo10 tech incubation project that works with start-ups to develop new technology around its brands. UK supermarket Tesco even ran a ‘hackathon’. The goal is to experiment with lots of little ideas, some of which may catch on.

Brands are looking for products or services that fit seamlessly into consumers’ lives. Ideas today

seem to ‘work’ best when they’re small and inconspicu-ous, rather than big and interruptiveGareth Kay, Chief Strategy Officer, Goodby Silverstein & Partners

The Nike+ FuelBand is a wristband that turns the wearer’s activity into points



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Four trends driving ‘small thinking’BEHAVIOURAL INSIGHT

Ideas such as behavioural economics and gamification point to new ways to encourage behavioural change. Among other things, these sug-gest that small changes can have big impacts, and that big, disruptive ideas may not be the key to encouraging consumer participation.

TECH INNOVATION

Rapid innovation in consumer technology makes small thinking more viable. Apps, for example, provide a way to produce a branded service that lives outside a traditional marketing campaign, and can ‘blend in’ to everyday life. Nike+ is an example of a brand realising the potential of technology to embed a brand in a consumer’s routine.

VALLEY CULTURE

The ‘fail fast’ mentality of Silicon Valley has become influential in mar-keting thinking. This encourages multiple experiments with small ideas, and prioritises a test-and-learn approach.

NETWORK EFFECTS

Advertisers now talk a lot about ‘earned media’, whereby networked con-sumers share content and services that they like. The power of the net-work helps level the playing field; big-budget campaigns are no longer the only way to make an impact. Networked consumers can help brands test ideas, and spread news of new content and services.

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CHALLENGEIn the Thai beer market, Tiger is a niche, imported player whose core drinkers are tourists and backpack-ers. But sales to them had been falling as local beers took over many of the outlets in which Tiger had previously been able to communicate at the point of purchase.

Traditional alcohol advertising is hedged around with restrictions in these markets, and in any case

Case study Tiger Beer

Tiger Beer created an offbeat guidebook for visitors to Thailand, providing useful content that tour-ists would take with them.

Campaign Fifty Must-Do Things in Asia

Advertiser Asia Pacifc Breweries

Agency JWT Bangkok

Market Thailand

Source Warc Prize for Asian Strategy 2012

was likely to be ineffective given the transient nature of the audience. The brand needed a new and cheap way to reach its audience.

SOLUTION

Tiger avoided boring its target with more messaging and instead came up with a useful item that the typical traveller would be happy to put in their limited backpack space and refer to frequently: a guidebook extolling the real Asia.

This guidebook listed 50 offbeat things they could do, such as eating deep-fried insects or chatting up girls called Porn, and invited people

Other examples:Dove, ‘Ad Make-over’, USAmerican Express Open, ‘Small Business Saturday’, US

to post pictures of themselves in action on Facebook. Anyone upload-ing pictures of more than ten things could claim prizes at a Tiger Beer roaming booth. Postcards and an iPad guidebook extended the reach of the brand.

RESULTS

Within two weeks, all 25,000 guide-books were picked up and 1,000 people registered online, with most uploading pictures.

Sales of Tiger in outlets associated with the campaign rose 160% when the brand’s roaming booth arrived. View full case study



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Viewpoint Brands go back to products

Involving the marketing function in product develop-ment is a significant shift for many traditional product-led businesses. But it is vital to meet the consumer’s evolving needs

Aligning the marketing function with product innovation can make ‘small thinking’ a reality.

Several trends are conspiring to return branding to its roots – as a signifier of product origin and qual-ity. Times are changing: from brand being the differentiator of product, to product being the differentiator of brand. Marketers need to foster a greater alignment with the product function to ensure more competitively differentiated products, services and communications.

WHY IS THIS HAPPENING?

Growth of own-label. The propor-tion of own-label and retailer brands is growing, and no sector is immune.

Change in consumer attitudes. Consumers are falling out of love with brands. A 2011 study by Havas Media found most people would not care if 70% of brands disappeared.

Economic change. Price is in-creasingly the motivation for pur-chase, with 44% of purchases made

on promotion, according to a 2011 study from Haygarth.

Technological change. The rise of social media and digital channels give any product or service an imme-diate global platform. Price com-parison sites and the internet make brand information more accessible and transparent.

Ethical concerns. Food miles, locally-sourced ingredients, ethical sourcing and a focus on health are all feeding into more product-focused strategies.

Increased regulation. Regulation is increasingly restricting communi-cations in industries from tobacco to confectionery to pharmaceuticals to drinks, and is set to limit further what brands can say and to whom.

BREAKING THE SILOS

Forward-looking companies are mov-ing from product innovation operat-ing in a silo to greater integration with the business, and, in particular, marketing. They are achieving this by creating collaborative working

environments, redesigning process-es, increasing functional interactions, creating cross-functional teams and building up insights capability.

There are many examples of the results. Starbucks collects customer feedback on its products and ser-vices on mystarbucksidea.com for consumers to vote on, implementing popular ideas. Nike is building a functionally integrated ecosystem of products and services, such as the Nike+ FuelBand, to engage its con-sumers. John West’s ‘Story in a can’ invites customers to enter a unique code found on each tin of tuna on its website to identify which of its boats caught the fish and where.

Involving the marketing function in product development is a significant shift for many traditionally product-led businesses. However, it is a vital shift, needed to meet the consumer’s evolving needs.

Will GrobelManager, Deloitte Marketing & Insight Practice





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PLACE SMALL BETS

Projects such as PepsiCo10 show a desire by big brands to identify new applications of technology, and experiment with small initiatives that may point to a way forward. It may be worthwhile reserving a portion of the marketing budget for this kind of experimentation.

BALANCE BIG AND SMALL

Small thinking does not mean the end of big campaigns. However, initia-tives such as the Nike+ FuelBand show that a brand can play a role in everyday life beyond the ‘big’ moments. Brands should investigate how to strike a balance between an ‘always on’ relationship with consumers, and the short-term spikes in activity around major campaigns.

ENCOURAGE COLLABORATION

On both the agency and the client side, a range of skillsets are required to deliver small thinking. Brands should ask how to facilitate collabora-tion between classic marketing strategists and experts in areas such as product innovation and creative technology.

PLAY WITH ‘OWNED’ FORMATS

Some of the best examples of small thinking come from developing in-novative products, services around those products, or (as in the case of Tiger Beer) useful pieces of content. The common theme is that these are formats ‘owned’ by the brand. When looking for ‘small ideas’, it may make sense to start with items that are already under the brand’s control.

Implications Delivering small ideas

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ContentsWarc’s Toolkit 2013 features ten chapters, focusing on the key challenges facing brands in the year ahead.

1 Consumers Engaging the enraged

2 Strategy The small idea

3 Mobile The mobile shopper

4 Media Generation screen

5 Content Strategic content

6 Social media The role of reach

7 Word-of-mouth Creating advocates

8 Insight Making sense of data

9 Targeting The personal touch

10 Adspend The 2013 outlook

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Read more in the full Toolkit 2013FEATURED CASE STUDIES

1 James Ready, ‘Help Us, Help You’, Canada

2 Tiger Beer, ‘Fifty Must-Do Things in Asia’, Thailand

3 Rimi, ‘Rimi Pluss’, Norway

4 Coca-Cola, ‘Chok! Chok! Chok!’, Hong Kong

5 Procter & Gamble, ‘Mission Control by Super-savvyme’, UK

6 Rom, ‘American Rom’, Romania

7 Dettol, ‘Messages Interrupt, Utility Delights’, China

8 Unilever, ‘CybrTrak’, US

9 Coca-Cola, ‘Share a Coke’, Australia

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www.warc.com© Copyright Warc 2013. All rights reserved.

This report features 10 chapters offering the latest thinking on the biggest challenges facing brands. Each chapter includes case studies, data, and implications for marketers.

Highlights include:

Case studies from advertisers including Unilever, Coca-Cola and Procter & Gamble.

Insight into the role of smartphones and tablets in customer journeys.

New ideas for effective use of social media and word-of-mouth.

Latest adspend forecasts and media channel analysis for 2013.

The full report is available only to subscribers of www.warc.com.

Not a subscriber? You can purchase this report, contact [email protected]

About Warc’s Toolkit 2013 report


SHOPPER MARKETINGWarc’s report on new approaches to Shopper Marketing. Includes analysis of the new path-to-purchase, plus data and case studies. Available in Full and Sum-mary versions.

Download the report

CASE FINDERPinpoint the exact case study you need by searching Warc’s unri-valled database of award-winning cases, organised by campaign objective, country, industry sector, audience, media channels, budget and campaign. Find a case.

More from Warc…

SERIOUSLY SOCIALWarc’s casebook of effective-ness trends in social media campaigns. Includes analy-sis of how social is used in the world’s best effective-ness cases. Available in Full and Summary versions.

Coming soon

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Disclaimer: This report (the “Report”) has been prepared by Warc and Deloitte LLP (“Deloitte”) on the basis of the limita-tions set out below. The Report has been prepared solely for general information and should not be used for any other pur-pose or in any other context. No representation or warranty, express or implied, is given and no responsibility or liability is or will be accepted by or on behalf of Warc or Deloitte as to the accuracy, completeness or correctness of this Report and any such liability is expressly disclaimed. All copyright and other proprietary rights in the Report remain the property of Warc and Deloitte. This Report and its contents do not constitute financial or other professional advice, and specific advice should be sought about your specific circumstances. In particular, the Report does not constitute a recommendation or endorsement by Deloitte to invest or participate in, exit, or otherwise use any of the markets or companies referred to in it. To the fullest extent possible, both Warc and Deloitte disclaim any liability arising out of the use (or non-use) of the Report and its contents, including any action or decision taken as a result of such use (or non-use). Deloitte LLP is the UK member firm of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms,

each of which is a legally separate and independent entity.

Deloitte Marketing & Insight Team

Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients in multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte has 200,000 professionals worldwide, all committed to becoming the standard of excellence.

Deloitte LLP offers professional services to the UK and European market. With over 13,500 exceptional people in 28 offices in the UK and Switzer-land, Deloitte has the broadest and deepest range of skills of any business advisory organisation. Our Marketing & Insight team is the leading prac-tice of its kind in the UK and comprises experienced professionals from a range of backgrounds, including marketing agencies, research and ana-lytics, CRM technologists, industry marketing management and manage-ment consultants. Our capabilities span the marketing value chain, from Marketing Planning and Strategy through to Marketing Operating Models and the latest Marketing analytics techniques and technologies.

ABOUT DELOITTE KEY CONTACTS

Nick Turner Partner

Nick is a partner in Deloitte’s UK Market-ing & Insight practice. He has led global operating model transformations for some of the world’s largest brand and marketing functions, working on integrated business

processes, governance and technology enablement. In 2011 he was voted Marketing Consultant of the Year by his peers in the Management Consultancies Association. +44 7957 483543 [email protected]

Alex Thom Manager

Alex is a manager in Deloitte’s UK Market-ing & Insight practice. He has gained cross-industry experience in consulting, defining and delivering customer-related strategies, with a particular focus on

marketing. Alex leads the brand management proposition at Deloitte, and his work has included specialist support designing marketing processes, analysing marketing spend, designing marketing operating models and evaluating agency models. +44 7900 405103 [email protected]

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