Brands And Social Ecommerce Face Uncertainty As UK Sets Sights On “Critical Third Parties”

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A new UK Bill proposes potentially far-reaching powers over the tech companies driving the social eCommerce boom. In addition, regulatory uncertainty may complicate innovation, sending both in search of a modern banking solution.

Tech companies have long helped to drive consumer-facing payments innovation for eCommerce. Still, they also often serve as the engines of growth for social media companies that have—or plan to—adopt shopping options. Brands marketing products through deep integrations with social media platforms via live shopping events or through virtual pop-up shops have transformed how consumers and brands connect.

But these cozy relationships may face new scrutiny if a new bill is adopted.

The UK’s Financial Services and Markets Bill would allow HM Treasury, the UK’s economic and finance ministry, to expand the range of business categories subject to oversight—including third-party payment service providers. Currently, under review in The House of Lords, the Bill would grant regulators broad powers to impose new compliance tasks on any selected entity or restrict the commercial activity of that entity on a case-by-case basis. 

Under the Bill, HM Treasury would be able to “modify any legislation” under the current Payment Services Regulation of 2017, “confer new powers on the Treasury,” “grant rule-making powers to a regulator,” “enable a regulator to charge fees” about their functions, and “to create among other things, new criminal offenses or modify existing ones.” 

New Treasury Powers Leave Key Categories Open To Interpretation

That’s a lot of power—all of it to be focused on businesses chosen at the discretion of the Treasury, as the Bill’s research brief puts it, “in connection with protecting and enhancing the integrity or stability of the financial system operating in the United Kingdom.”

According to the brief, the broad terms are intentional—the Bill’s teeth lie in its emphasis on potentialities. Its goal is to leverage regulatory power to avert latent risk within the B2B payments and financial services ecosystem. The Bill, presented to parliament in July, was promoted as an effort to mitigate systemic risk to the UK’s economic infrastructure. 

“Even though these third-party providers are not financial services firms,” the research briefing for the Bill reads, “some of them are used widely enough that their failure could significantly impact the financial services sector – for example, by restricting firms’ ability to make payments or access important data.”

Big Brands And Social Media Companies Could Face A New Compliance Regime

The chosen remedy, the briefing continues, is to create a framework to designate businesses as critical third parties (CTPs) when in the event of their failure, there would be a risk to “UK financial stability or confidence.” 

That could include some of the world’s biggest tech or social media platforms companies—businesses that have long been subject to significant regulatory oversight through the Payment Services Regulation of 2017.

Under the proposed definition of critical third parties, any company—such as a social media brand or a platform with a large client base and deep connections to large marketplaces—could be designated a CTP.

In “312M: Power to make rules,” the Bill states that a regulator may “direct a critical third party to— (a) do anything specified in the direction, or (b) refrain from doing anything specified in the direction.”

While much of this legislation was put forth as focused on businesses connected to the financial services industry, the UK government formed a Digital Markets Unit in late 2020 which was designed to examine the role of “tech giants” and designate certain businesses as having “strategic market status,” a term that echoes a  “critical third party” designation concerning financial markets. According to a recent analysis, large businesses with digital roots—or customers—in the UK may also be fair game for this regulatory initiative. 

“The scope of the DMU’s powers are yet to be confirmed,” according to a post on JDSupra in mid-2021. “It is anticipated that the DMU will work to promote online competition, including by ensuring that consumers are given choice and control over the use of their data.”

But the DMU is not only looking at consumer-facing data policy. The DMU, publishing excerpts from a speech by Sarah Cardell, Interim Chief Executive of the Competition and Markets Authority, presented a broad vision for the DMU. According to the posting in November, the DMU will focus on promoting “dynamic competition in digital markets to create an attractive ecosystem for investment and innovation.” That broad definition gets a bit wider later on.

“Network effects mean people benefit from being on the same platform as each other: the more people who join a platform, the better the user experience may be,” Cardell states. But this effect impedes people’s ability or appetite to switch to new platforms when they have lower initial user bases.”

After mentioning Apple, Microsoft, Amazon, and Meta as examples of market domination, Cardell talks about the ramifications of a “winner-takes-all” digital landscape.

“We must be mindful of the risks that come from significant and entrenched market power – particularly in markets that have become essential for our way of life and commerce,” Cardell writes. “But so-called ‘dark patterns’ can emerge whereby consumers end up paying more or being caught in subscription traps, and online fake reviews can significantly distort consumers’ choices. This can be particularly significant for consumers in vulnerable situations, who may already find it harder to access the benefits of digitalization.”

While large brands and social media platforms are on the DMU’s radar, according to Cardell, businesses entwined with the world’s biggest names in tech may be impacted by default. An example might be brands or individuals selling to consumers directly via social media accounts or through eCommerce integrations. 

Of course, UK regulators have traditionally held power to compel those under their jurisdiction to comply with directives under existing law. However, The Financial Services and Markets Bill’s expansive powers to designate businesses of any sector as critical third parties represent a shift that leaves social media platforms and tech companies uncertain.

Gaining Relevance And Connecting To Consumers With Laura Hutfless, CEO And Co-Founder Of FlyteVu

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Laura Hutfless operates at the intersection of brands and culture makers. She works with founders with passion and brands with a purpose, helping them use ad dollars to drive change, understand where their consumers are, and leverage those spaces to change perceptions and earn trust.

In this episode, Laura and I discuss the difference between creating culture versus chasing culture, integrating versus interrupting, the importance of having a two-way exchange with consumers, and why marketers need to lean into Web3.

 In this episode, you’ll learn:

  • How consumers and pop culture need to guide marketing plans
  • Why clients come to FlyteVu
  • The importance of building community, not just follower counts

 Key Highlights

  • [01:40] Becoming a new mom
  • [04:10] Laura’s path to founding FlyteVu
  • [06:30] Why brands need to connect to consumers through pop culture
  • [08:00] Starting with the headline you want to create and work out from there
  • [09:00] Examples of what Flyvu clients are looking for
  • [12:00] What brands should be focused on regarding culture
  • [15:00] Power of having partners who are aligned with brands values
  • [16:30] How marketing leaders should approach marketing
  • [17:20] Why FlyteVu is moving into web3
  • [18:30] Web3 educational workshop series
  • [20:50] What is Fv Incubator
  • [24:25] Underlying purpose to why Laura launched FlyteVu
  • [27:45] The power of the FlyteVu Fund
  • [30:00] Do you need a big budget to make a big impact?
  • [32:20] A story speaking to the power of imaginative deals
  • [33:55] How a sudden loss impacted Laura’s worldview
  • [38:00] Laura advice to her younger self
  • [39:20] Brands Laura thinks people need to take notice of
  • [41:30] How being encumbered by the process is a threat to marketers

Resources Mentioned:

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 Connect with the Guest:

 Connect with Marketing Today and Alan Hart:

Alan B. Hart is the creator and host of “Marketing Today with Alan Hart,” a weekly podcast where he interviews leading global marketing professionals and business leaders. Alan advises leading executives and marketing teams on brand, customer experience, innovation, and growth opportunities. He has consulted with Fortune 100 companies but is an entrepreneur at his core, having founded or served as an executive for nine companies.

ANA: The State Of Diversity In Marketing And Advertising In 2022

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The marketing and advertising industry is more diverse than ever, according to the Association of National Advertisers. For the fifth year in a row, ANA, the oldest trade association for advertising professionals in the U.S., conducted three separate studies among its members and compiled the results into a report readily available online. While the report concludes that the overall representation of women and ethnic minorities has risen, much work remains to diversify leadership roles in the industry.

Diversity Among Marketers In The U.S.

The first study in the report, referred to as a “diversity benchmark,” breaks down the marketing departments of U.S.-based ANA member companies and features four distinct sections looking at the gender identity, ethnicity, orientation and ability of respondents. The final section of the diversity benchmark, which is presented later on in the report, asks participants to share the ways their companies have worked to increase diversity within their marketing departments, as well as any challenges they have encountered in doing so.

Representing 19,966 marketers in total, 81 companies with marketing departments of all sizes completed this study, the highest ever in the five-year history of the project.

According to the study, approximately two-thirds of employees working in the marketing departments of U.S.-based ANA member companies identify as female, with male-identifying and nonbinary employees making up 32.4 percent and 0.1 percent of the grouping, respectively. The authors note female representation is now at the highest it’s ever been since ANA began tallying diversity data for these annual reports five years ago.

This trend also holds true when looking at the position employees hold at the companies included in the study, though senior roles are much more evenly split among genders. For instance, 84.5 percent of female-identifying employees in the study worked in an administrative, clerical or support capacity, as opposed to 15.4 percent of their male-identifying peers. On the flip side, 55.6 percent of senior employees identified as female while 44.2 percent identified as male.

“Representation of women in the industry overall and in leadership positions continues to be strong,” Bob Liodice, ANA CEO, wrote in the report’s introduction, “and I am happy to tell you that we are finally making strides to improve ethnic diversity.”

Results show the industry is also more ethnically diverse than ever, with increases in Black and Hispanic representation in participating marketing departments nationwide. Out of 19,966 qualifying marketers, a little over 7 percent were reportedly African American/Black, while Asian and Hispanic/Latino workers came in at 10.2 percent and 10.9 percent, respectively.

The study does note, however, that representation for Black and Hispanic people in the industry is still significantly lower than their proportion of the U.S. population. Inversely, Asian representation dipped slightly since last year’s report came out, but Asian representation in the industry remains higher than its proportion of the U.S. population.

As for what jobs they hold, ethnic diversity was much higher among entry-level jobs as opposed to senior leadership positions. The one exception being the administrative level, which was the most diverse.

The report credits a “multicultural” younger U.S. workforce, as well as corporate initiatives to diversify talent pools, as the reasons for the rise in ethnic diversity in entry-level marketing roles, an increase that has been documented in every year of the study.

Finally, the study asked ANA-member companies whether they allowed their employees to self-identify as being either LGBTQ or a person with a disability, and by a large majority, they did. Fifty of the 81 companies surveyed provided workers the opportunity to self-identify as being LGBTQ, while 67 allowed employees to self-identify as being a person with a disability. This was a rather confusing way to present this metric, as the study did not specify how companies allowed employees to “self-identify” as a person with a disability and how those efforts benefited or helped those individuals.

Diversity In The Industry Worldwide

Looking beyond the border, the second study in the report looked at diversity metrics in ANA membership worldwide. Marketers and “marketing solutions providers” at ANA member companies were asked to volunteer and anonymously provide information on their gender, sexual orientation and ethnicity.

The study found that while ethnic diversity has improved and is at an all-time high, ANA’s overall membership remains overwhelmingly white. In addition, 68.3 percent of respondents identified as female, vastly outnumbering their male-identifying counterparts, with similar numbers reported in the last four studies.

As for sexual orientation, gay, lesbian, bisexual and “other” representation has risen since last year, though heterosexuals account for 92.6 percent of the 22,916 responses to this question. However, it should be noted that while the “other” category includes anthrosexual, asexual, demisexual and pansexual identities, it also includes “transsexual,” conflating sexual orientation and gender identity when they’re separate and distinct concepts. Not only that, but the term has been overwhelmingly rejected by the transgender community, and its usage is discouraged by several media organizations, including GLADD and NLGJA: The Association of LGBTQ Journalists, both of which offer glossaries on LGBTQ+ terminology to help everyone avoid making this mistake.

Diversity Among Industry Leaders

The third and final study included in ANA’s diversity report looks at the profile of chief marketing officers and their equivalents at 931 of the organization’s member companies. According to the latest numbers, 57.3 percent of top marketers identify as female, a percentage that has risen each year since counting began in 2018.

Ethnic diversity among CMOs and their equivalents has slowly crept up to 14.6 percent, up from 13 percent five years ago, with African Americans/Blacks comprising 5 percent, Asians 5.8 percent and Hispanics/Latinos 3.8 percent of ANA member companies CMOs.

Actionable Plans To Improve Diversity

Respondents in the U.S.-centered diversity benchmark were also asked to identify practices that have helped their companies to improve diversity within their marketing departments, as well as any challenges they faced. The feedback they received spans several topics, including talent recruitment and retention; diversity, equity and inclusion strategy; external engagement and multicultural marketing; and brand recognition.

In the case of DEI, respondents’ recommendations include asking companies to listen to associates to help identify equity and inclusion needs, as well as launch diversity councils comprising employees from varying genders, races and job functions that meet regularly with executives and talent and marketing teams to strategize on how to attract, retain and develop diverse talent. Respondents also recommend expanding DEI efforts to include supplier diversity, the creation of business resource groups and community outreach.

As for success stories, the biggest takeaways seem to be that true progress is made when companies set clear DEI goals that can be tracked and measured long-term, as well as hold senior leadership accountable for building diversity in their organization, with some even going as far as requiring leaders to have at least one diversity and inclusion objective as part of their annual performance goals.

When it comes to ensuring a diverse slate of candidates, respondents said their companies employed a variety of strategies, from requiring a percentage of candidates interviewed come from minority groups to relaxing degree requirements in job descriptions. Internships also played a vital role in attracting diverse talent, with companies launching training programs allowing interns to explore different departments, as well as ensuring that internships are fully paid and cover living expenses, so as to not price anyone out. Some companies also host internship programs for students at the high school, undergraduate and graduate levels, as well as partner with diverse student organizations and historically Black colleges and universities.

Executive mentorship played a huge role in retaining diverse talent, according to respondents, with some companies maintaining a pipeline that moves diverse talent to “destination roles” rapidly, while others had programs to drive advancement opportunities for individuals from minority groups, including female and LGBTQ+ employees.

On the flip side, numerous responses called out the geographic location of their company as a huge obstacle to recruiting younger and more diverse candidates. This was a bigger challenge for companies in rural areas, especially those that hadn’t embraced remote work. In response, one company even moved its marketing department to a larger metro area, which reportedly helped boost the recruitment of diverse talent.

Click here to read the report in its entirety, including a case study with Citigroup Inc. tracking the work they’ve done to diversify their staff of more than 220,000 workers worldwide, as well as links to case studies from past years featuring Verizon, IBM, General Mills, Kimberly-Clark and more.

Trend Set: Brands Innovate On Social To Drive Traffic, Sales

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This week, Ayzenberg trend-watcher Ashley Otah examines how retailers are looking to social media for inspiration on how to engage shoppers directly and even deliver deals right to their phones.

Amazon

Amazon rolls out Inspire, a TikTok-like in-app shopping feed featuring personalized photo and video content based on customer input. Shoppers will be able to peruse and shop for the items they see on their feed. Like other platforms, Amazon aims to seamlessly merge the shopping and social media experience to facilitate shopping. This is something tech companies have struggled with in the past, however, we’re seeing a resurgence this season. One thing is certain: Only the winning features stand out and stay alive in the race for consumers’ attention. 

Glossier

With locations in London, Los Angeles, Brooklyn and more, Glossier is no stranger to brick-and-mortar operations. Not only has the brand succeeded in the “real world,” but their social presence has also exploded as they amassed nearly 3 million Instagram followers — it hasn’t stopped growing yet. The physical stores allow customers to mix, match and try things on in real-time, an element that online offerings miss. Although the world continues to step into a mixture of physical and digital, it is still essential for brands to have an omnichannel strategy to stay alive and thriving. 

Logitech

In its latest organic campaign, Logitech turns to social to get real. As the holiday season buzzes, brands are finding new ways to connect with their audiences. This is why the technology brand is using BeReal for its “12 Days of Deals.” This campaign allows users to get exclusive deals while using the app in its native form, helping the brand reach new, younger audiences. Meeting consumers where they are is as important as ever and will continue to help differentiate brands now and in the future. 

Here Come The Zoomers: 16 To 24-Year-Olds Are Always Connected And Streaming

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A recent report by GWI shows that today’s 16 to 24-year-olds are a lot like The Golden Girls: they spend hours on the couch watching TV and gossiping with their besties. That’s good news for savvy marketers willing to craft a context-aware marketing strategy.

Digital Is The Waking Life: Gen Z Spends Most Of Their Free Time Connected

Digital spaces are now where Gen Z spends most of their free time. According to GWI, Gen Z Americans spend almost three hours daily on social media, more than any other demographic group in the US. They also spend an hour and 23 minutes gaming and an hour and 34 minutes streaming online TV. That’s in addition to the hour and 28 minutes spent watching traditional, linear television.

The Second Screen Echo Effect

Gen Z is not just always connected—they also usually interact with multiple devices simultaneously. While that isn’t a surprise if you’ve been near a teenager in the last five years or so, what is new is the explosion of content choices and mobile tools. Consumers have multiple devices and opportunities to shop without getting off the couch or picking up a laptop. Mobile phone features that allow consumers to shop TV scenes or authenticate in-game purchases instantly from an app mean marketers have numerous opportunities to drive Gen Z consumers towards engagement—or away from it.

The same ad, out of context and on repeat, can deaden viewer interest.

Knowing that Gen Z people are likely connected to multiple content experiences and interacting with friends on social at the same time, brand marketers should be mindful of the echo effect. A good ad campaign is like a great TikTok video—engaging, informative, or amusing, and appears at the right time—based on what the viewer is interested in at that moment. When there’s an echo of something great—like a beat from a sound system—it’s danceable and a pleasure to experience. But ads that are irrelevant and track consumers from device to device are the wrong kind of echo—persistent and slightly creepy. That’s something users never want to see or hear again.

What This Means For Marketers

Digital spaces are now “home” for Gen Z. Online connections are almost always on or nearby. That makes it easier for marketers to find Gen Z consumers, but it also means they are likely already inundated with ads. Because they are always connected, they may see the same ads on repeat. Too many ads appearing on something always on and rarely out of sight may feel like an invasion of personal space. That means relevance is important, as is context.

For Gen Z, context matters a lot. While this demographic reports skipping ads more than other age groups, they are most influenced to make a purchase when viewing ads on TikTok, according to a recent YPulse report. This makes sense, as TikTok adoption has grown by over 40% since 2020, according to the GWI report. Gen Z consumers also use the internet 9% less this year to find information. There may be a reason for that: the rise of social search.

According to the report:

“TikTok is spearheading this shift in finding information online. The appeal of TikTok is real people recounting their real experiences instead of a search engine offering up hundreds of links that may get you the answer you’re looking for.”

That makes the social ads and TikTok-based campaigns especially powerful when they deliver information that can be found easily in a search.

Overall, the study found that Gen Z consumers are more likely to make a purchase based on viewing ads on social media and YouTube than on cable TV, for example.

Learn more by downloading the report.

What Makes A Great CMO With Norm Yustin, Partner And Global Leader Of Customer Activation & Growth Practice At Russell Reynolds Associates

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Norm Yustin spent the first part of his career as a marketing executive. However, after a particularly impactful recruiting experience and some encouragement from friends and family, he made the move into leadership recruitment. Norm is widely published on the future of tech-enabled, go-to-market leadership, and he brings a unique perspective of developing self-awareness in pursuit of your passion.

In this episode, Norm and I discuss why CMOs need to be the most dynamic players in the C-suite, the danger of hyper-specialized teams and why risking leadership changes may be the right thing to do, and where the next-gen CMOs are coming from.

 In this episode, you’ll learn:

  • The state of the CMO role today
  • What should job seekers need to know from a recruiter’s perspective
  • What aspiring CMOs should be thinking about in terms of skill development

 Key Highlights

  • [03:30] Norms transition from being an executive to recruiting executives
  • [07:17] How losing out on a job shaped the way Norm thinks about recruitment now
  • [11:05] What does it mean to be a CMO today?
  • [14:00] Evaluating if a job is a right fit for you or if you just covet the role
  • [16:20] Why marketers tend to job hop more frequently
  • [18:30] Psychosomatic look into CMOs
  • [19:40] The obsession with Growth Titles and what it tells us about the state of change
  • [22:00] What to take away from the Trends of engineers turned markers
  • [23:30] Why are 80% of CMOs external hires?
  • [27:40] Wavemaker vs Waveriders
  • [31:40] Norm’s thoughts on the CMO to CEO trend
  • [37:05] How traveling shape Norms worldview and leadership style
  • [40:45] Norm’s advice to his younger self
  • [43:50] The everchanging quest of understanding consumers
  • [47:00] Positioning yourself as a “Customer-centric tech-enabled leader”

Resources Mentioned:

 Follow the podcast:

 Connect with the Guest:

 Connect with Marketing Today and Alan Hart:

Alan B. Hart is the creator and host of “Marketing Today with Alan Hart,” a weekly podcast where he interviews leading global marketing professionals and business leaders. Alan advises leading executives and marketing teams on brand, customer experience, innovation, and growth opportunities. He has consulted with Fortune 100 companies, but he is an entrepreneur at his core, having founded or served as an executive for nine companies.

Equinox, Lightspeed, Integral Ad Science Name New CMOs; Former Glossier CMO Becomes Chief Executive At Loop

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This week, we track new hires at Equinox, Lightspeed and Integral Ad Science as the companies fill chief marketing officer roles, as well as the journey of a CMO taking over the CEO position at Loop.

Jeff De Korte Appointed New CMO at Equinox

Luxury fitness company Equinox has brought Jeff De Korte on board as their new chief marketing officer. De Korte, who has racked up 25 years of experience as an executive in the travel and hospitality industry, is filling the role left behind by Peter Giorgi, who had held the role since April 2021.

He joins the company as Equinox sets its sights on expanding its offerings beyond fitness, providing a space for members to spend time in between work and home. According to De Korte, the way members use the clubs has changed since the onset of the COVID-19 pandemic and, therefore, in his new role, he will build a marketing and communications program that will allow members to use the clubs in the “best ways they need to or want to.”

Building on his experience working for Caesars Entertainment, which holds hospitality, entertainment, gaming, retail and other brands, De Korte will lead all marketing strategy development for Equinox Fitness Clubs and Equinox Media, as well as the marketing execution for Equinox’s physical and digital brands.

“If you look at the core tenets of the Equinox business — the club experience, our personal training, our classes, our retail — these are all independently, really strong businesses. A lot of our focus going forward will be [about], ‘How do we put together a plan that continues to grow each of those businesses while leveraging the Equinox brand that sits on top of them?” De Korte told Women’s Wear Daily.

Kady Srinivasan Joins Lightspeed As New CMO

Former Dropbox and Klaviyo executive Kady Srinivasan joins Lightspeed Commerce as their new CMO following a tumultuous year full of change for the e-commerce software provider.

Filling the role of chief marketing officer was the “last big piece” missing, according to CEO JP Chauvet, as the company continues to restructure its executive team following the departure of Dax Dasilva, its founder and former CEO, back in February. The position appears to have been vacant for some time; Srinivasan is taking over the role from Lory Ajamian, who worked at Lightspeed as executive vice president of marketing before leaving the company in April.

“I look forward to bringing my tech industry marketing experience to advancing Lightspeed’s position as one of the world’s most innovative and fast-growing commerce companies,” Srinivasan told Betakit. “I can’t wait to get started.”

Ali Weiss Appointed CEO at Loop

Former Glossier Inc. CMO Ali Weiss has been hired by baby equipment rental company Loop Co. to be its new chief executive officer—taking the reins from Henry Vogel, the company’s founder. Operating out of New York City and San Francisco—though plans to expand are in the works—Loop lets paying members rent cribs, toys and other baby gear.

“Our vision is that we’re able to provide this service across many markets, many cities, many metro areas across the U.S.,” Weiss told The Wall Street Journal.

According to Weiss, parents mindful of their clutter and environmental impact will see the appeal of a Loop membership, as baby gear and toys “have very long useful lives in the world, but pretty short useful lives at home because children are growing and changing so quickly.” Therefore, she said, the company sees a hole in the market, where the company can begin to offer products for older children.

Weiss had worked as CMO of Glossier for seven years before leaving the beauty company in July. Weiss said her experience at a fast-growing startup has prepared her for this new role at Loop. “Ultimately, the best CMOs are intrinsically consumer-centric,” she said. “They make all their decisions … consumer-first, customer-first. For us at Loop, it’s member-first.”

Integral Ad Science Names Khurrum Malik New CMO

Integral Ad Science announced today that Khurrum Malik, former head of global business marketing at Spotify, has joined the company as its new CMO effective immediately. As a leader in technology marketing with experience in public and private companies, IAS said Malik will lead its global marketing strategy and boost its market growth initiatives.  

“Khurrum’s impressive background and passion for technology and marketing will be instrumental to driving our go-to-market strategies and increasing awareness of our value proposition,” said Yannis Dosios, chief commercial officer at IAS. “We are excited for him to lead the marketing effort for IAS.”  

Malik also has CMO experience from his time at Compass, a real estate technology platform, as well Meta, where he was head of product marketing.   

“… I look forward to working with the entire IAS team to ensure global marketers, publishers, and media platforms understand how best to leverage our technology and insights to activate brand-safe and ROI-driven campaigns,” Malik said. 

What Marketers Can Learn From Balenciaga’s Wild Q4

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From dropping YE to dropping a $25 million lawsuit against North Six, Balenciaga’s marketing saga has some important lessons for brand marketers.

Lesson One: Influencers’ Power Goes Both Ways

When Balenciaga ended its collaboration with Kanye West (now known as Ye), it was the first company to do so after the musician’s controversial comments launched a firestorm of controversy. Their previous work together—which included the rapper opening the brand’s Summer 2023 show—had placed Ye at the core of the brand’s new marketing ethos, which has highlighted diverse and avant-garde artists such as Ikeuchi Hiroto and attempted to appeal to younger demographics with a 3D Fortnite digital billboard collaboration. Gen Z is a core demographic for Balenciaga, with luxury consignment platform TheRealReal reporting that the brand showing the greatest increase in demand among shoppers was Balenciaga, with a 41 percent gain. 

Despite inflation, luxury brand sales—including Balenciaga’s—have been surging online and in flagship stores, and Gen Z shoppers are predicted to drive luxury goods sales growth from now until 2035. That means a misstep with an influencer can do more than compromise brand values; it can alienate a key demographic likely to be critical to long-term growth. In that sense, influencers have enormous power over the brands they represent. Consumers assume that marketers complete due diligence before establishing a relationship with a celebrity. That can cost brands audience loyalty, especially with Gen Z, 68 percent of whom believe celebrities should face the consequences for harmful statements or actions.

Lesson Two: Brand Affinity Only Lasts Until Your Next Tormented Teddy

“I want to personally reiterate my sincere apologies for the offence [sic] caused and take my responsibility,” stated Balenciaga CEO and president Cédric Charbit in a statement on Instagram. “At Balenciaga, we stand together for children’s safety and do not tolerate any kind of violence and hatred message.”

That message from Charbit regarding Balenciaga’s controversial campaign featuring, among other things, a sad-faced toddler displayed on a bed next to Balenciaga accessories and a dollar store shopping bag, came after the company dropped its lawsuit against the agency that developed the campaign. The campaign’s furor was not simply directed at the content of the images but also at the fact that it skated very close to real issues of vulnerable people, including children, who are regularly bought and sold online using social media, per the BBC.

After initially announcing plans to investigate the incident and sue the creative agency attached, the brand issued a statement on Instagram detailing its plans to review “[each] concept from ideation to final assets.”

Lesson 3: Build Back Smarter—Not Just Better

While Olivia Pope on ABC’s Scandal used a mix of black hat and white hat tactics to repair individuals’ PR disasters, brands can’t really take a shortcut to brand reputation redemption. Companies that earn hundreds of millions per year don’t seem credible when they shift blame to forces (or agencies) beyond their control. Successful brand marketers know that the brand will be held responsible for all of it—from concept to execution—even if dozens of people (or only one) take a look at the final product. But saying sorry and promising to be better is not enough. Consumers want to know this was a lesson, not a fluke. That means presenting a pathway to change and a map showing how the snafu happened and why it won’t happen again. Change means structure, steps, and safeguards—something Balenciaga outlines in their post. It won’t help readers unsee those scared preschoolers, but it’s a start.

Trend Set: Global Brands Center Customer Needs In New Campaigns

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Ayzenberg trend-watcher Ashley Otah explores the ways in which some of the world’s biggest brands are centering the experiences and needs of customers, building community and promoting inclusivity.

Apple

About one in six people worldwide experience significant disability. And yet, the representation of people with disabilities in advertising and beyond remains abysmal. Ahead of International Day of Persons with Disabilities, Apple’s latest campaign, “The Greatest,” centers the experiences of disabled people, showcasing their daily lives, talents, celebrations and more, including how Apple technology assists them in accomplishing tasks. The video exemplifies a broader effort from the technology industry to embrace inclusion. Although there is a long way to go, the ad underscores the strides made to expand accessibility for all.

Spotify

The end of the year heralds the arrival of many things—holiday gatherings, friendly outings and even snow, for some—but it also signals the arrival of Spotify Wrapped. With new features to analyze users’ “Listening Personality” and other usage metrics, the yearly drop keeps audiences on their toes and coming back for more. Its shareability, personalization and community-building attributes are just a few things that boost the success of Spotify Wrapped. Users’ desire to look inward while connecting outwardly is exemplified by the campaign, and although it would be quite a feat to duplicate or defeat, Spotify’s ability to build community provides a lesson all brands can learn from.

McDonald’s

Everything is tastier in Texas—and McDonald’s knows that. The company recently launched a new test restaurant in the Lone Star State designed for the diner on the go. Customers will be able to order ahead and pick up their orders at a dedicated conveyor, skipping the drive-thru lane. The restaurant also features a pick-up room for delivery drivers to retrieve orders and kiosks where customers can place orders to go. This new endeavor shows McDonald’s understanding of consumers’ changing behaviors. Understanding and reshaping the customer experience in a rapidly evolving landscape can elevate brands above the rest.

YouGov’s 2022 Best Brands Report Shows Notable Absences From Top 10

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Amazon and Nike are two of the biggest absences on YouGov’s annual Best Brands list, derived from a survey of thousands of consumers.

Samsung focuses on user experience and rises in rank; Amazon and Nike exit list

Samsung, which also ranks in the top 5 on Interbrand’s Best Global Brands List, is now number one on YouGov’s latest brand value report. According to the company, the brand invested in making its products more amenable to connected experiences through partnerships with Google and Microsoft, providing consumers with new gaming experiences, and ensuring stable supplies for next-generation applications to avoid supply chain delays that impact customer experience. 

The brands on YouGov’s annual Best Brands list are ranked based on YouGov BrandIndex’s Index score, which the company states is “a measure of overall brand health calculated by taking the average of Impression, Quality, Value, Satisfaction, Recommend and Reputation.” The Index Rankings chart shows the brands with the highest average Index scores between September 28, 2021, and September 27, 2022. 

Last year, the top five were dominated by digital brands: Google, Samsung, Netflix, YouTube, and WhatsApp comprised the top five. That reflected different times—tech, streaming, and social media brands had not yet begun the intermittent periods of volatility and dramatic slide in stock market values when the 2021 survey was completed in September of that year. Those stock market values have an explicit connection to how consumers interact and assess their user experience with digital brands, as well as how readily they are signing up for (or abandoning) subscriptions.

YouGov’s top 10 brands in 2021:

Source: YouGov – ‘Google, Samsung And Netflix Top YouGov’s Global Best Brands Rankings 2021’

Brands fighting challenges on all fronts, while customers look for deals and the right overall experience

By late October 2022, a Q3 drop in big tech share values reflected warnings from tech giants, including Amazon about consumers’ hesitant spending. But YouGov’s metrics measure consumer satisfaction—not just general sentiments around a brand. Recently, Amazon’s customer satisfaction hit an all-time low, with the company’s consumer experience ratings lagging behind Nordstrom and Costco in one major survey by The American Customer Service Index. In YouGov’s latest Best Brand survey, Amazon is absent. 

Source: YouGov’s ‘Global Best Brand Rankings 2022’

Another standout absence is Nike. While the company posted an increase in sales in Q3, earlier global supply chain issues have impacted Nike, which boasts 95 percent brand awareness and 90 percent brand loyalty, per Statista. Slow shipping times impact consumers’ user experiences, and even when it isn’t a brand’s purview, customers can associate those failures with the brand’s value. Per a March press statement, Nike revealed that it has overcome previous supply chain issues related to the closure of half of its factories in Vietnam and was able to produce at pre-closure capacity. While amping up production to meet customer demand may have helped alleviate one end of the supply-chain issue, transit times for retail goods have still been erratic in the US in 2022—and this can impact consumer satisfaction and consumers’ patience with retailers.  

For example, a recent survey revealed that 65 percent of shoppers polled stated they will abandon shopping with a retailer altogether after two or three late deliveries. Another 81 percent stated that if a retailer sends an incorrect order two or three times, they will also abandon shopping with that retailer altogether.

Brand loyalty aside, in times of economic uncertainty, consumers tend to reevaluate their purchasing habits and focus on affordability, value, and user experience. All three elements are important to shoppers as their lifestyle needs change and they are faced with a range of shopping alternatives, such as resellers offering the same or lookalike brands with faster shipping. This may make it harder for legacy brands to maintain customer loyalty when external issues—like shipping delays—tamper with user experience.

Download the entire report here.