Mobile Marketing Spend To Grow 73 Percent Over Five Years, Report

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Results from the February 2020 CMO Survey are in. The survey, administered bi-yearly online, covers the opinions of top marketers on budgets, firm capabilities and social media. Here we’re covering the survey’s most important findings.

Marketing budgets will increase, but not as much as last year’s prediction. The survey found that marketing budgets are expected to grow by 7.6 percent in 2021, a decline compared with last August’s 8.7 percent growth. Marketing budget as a percent of firm revenues will grow to 8.6 percent, a nine percent increase since 2018, while marketing budget as a percent of firm budget remains consistent at 11.3 percent. 

Digital marketing is growing faster than traditional marketing with brands spending nine percent on customers, 7.1 percent on brands and 6.1 percent on product innovation. Marketers are spending 15.2 percent of budget on customer experience, a 71 percent increase over the last three years.

Marketing capability development remains the top marketing knowledge priority for service companies, even more than product companies, at 12.7 percent followed by marketing consulting services at 11.2 percent.

Marketers are investing 54 percent of spending on existing markets and offerings while diversification remains the lowest growth strategy. Companies are continuously focusing on domestic marketing with a 13 percent increase observed since 2012.

Current budget spending on China is at 2.1 percent, up 1.7 percent three years ago. Marketers plan to increase Chinese budgets 100 percent to 4.2 percent in three years with the biggest spenders in mining and tech.

When data was collected for this survey in January, Chinese budgets were expected to exponentially grow. However, the outbreak of the Coronavirus may eventually slow international spending given the disruption of consumer spending in China, as cities are currently being described as ghost towns. Similarly, an outbreak in the US could disrupt consumer spending here, which accounts for 70 percent of the economy.

Internet sales as a percent of revenues are at the highest level in a decade at 13.5 percent. The space is dominated by B2C companies at 18.1 percent.

Social media remains important for marketers as spending grew to 13 percent of marketing budgets, the second-highest point in CMO Survey history. Companies with 10 percent internet sales dedicate more than twice the spending to social media than those with no internet sales. Outside agencies now perform about a quarter of all social media activities, the highest level reported since the question was first asked in 2014.

Across all industries and company sizes, social media spend for companies will increase by 62 percent over five years. Despite this, marketers continue to rate it as contributing only moderate value to company performance (3.4 on a seven-point scale).

Mobile spend also continues to rise and is expected to grow 73 percent over the next five years, with companies citing social ads the highest spend in mobile. Companies that sell at least 10 percent online see the most value with mobile, averaging 4.1 percent compared to a 2.7 average for companies that don’t sell online. Difficulty tracking customers across the mobile journey is the top challenge for companies.

Among the quality of companies’ marketing knowledge resources, companies ranked marketing capabilities highest, followed by customer insights then competitive intelligence. Online sellers rated their marketing knowledge resources as higher in quality, dominated by analytics and intelligence.

Survey results are based on a sample of 265 top marketers at for-profit US companies, 98 percent of which include responses from vice president level or above, surveyed from January 7-28, 2020.

Delta Air Lines Transforms Mobile App Into Digital Travel Partner

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Delta Air Lines recently announced plans to overhaul its mobile app, Fly Delta, and shared details about its expanding partnership with Lyft to potentially let customers pay for rides using travel miles.

The airline’s goal is to transform its app into a digital concierge that appeals to mobile-savvy consumers. The improved app will offer customers curated partner services, such as the linking of Delta SkyMiles and Lyft accounts helping customers earn miles during Lyft rides. 

The app will proactively notify users of any travel-impacts such as weather and traffic and is powered by Delta’s new artificial intelligence-driven machine learning platform. Travelers will also be alerted when their seat is boarding when virtual queuing comes to the app later this month. Updates to the mobile app follow Delta’s recent moves to integrate Transportation Security Administration (TSA) wait times in select airports and offer international automatic check-in and pre-select meals. 

“Customers tell us they want Fly Delta to become their ‘home base’ for managing their travel day. That’s why we’re evolving the app to become the ultimate travel companion for all points of your journey–with an eye on expanding the convenience and value of using miles as a form of payment for services with Delta and partners, throughout,” said Ed Bastian, CEO of Delta Air Lines.

Integrating ride shares into the Delta travel experience follows findings from an independent study Delta conducted that shows ride-sharing helps make travel days more enjoyable. Delta and Lyft first teamed up in 2017, a partnership that has since earned SkyMiles members more than 1.5 billion miles nationwide.

A Majority Of Marketers Worry About Rising Cost Of Facebook Ads

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Eighty-five percent of marketers are concerned about the rising costs of Facebook ads, according to a LiveIntent study which polled 200 marketers who spent at least $100,000 on Facebook ads during October.

Research from earlier this year found that Facebook CPM rates have grown 90 percent year-over-year for marketers. Since Q1 2019, CPM cost increased by 11 percent, reaching $7.84. Additionally, 42 percent of marketers are spending more in 2019 than 2018, largely due to the growing cost of Facebook ads. LiveIntent’s data shows that the increased cost is a concern for a majority of marketers, with 13 percent extremely concerned about the trend. If costs continue to grow, nearly half of the marketers polled believe they could be priced out of paid Facebook ads. 

A separate study commissioned by LiveIntent found that 35 percent of new LiveIntent customers had moved to LiveIntent due to either higher Facebook costs or slowing performance. 

Today, 3 million businesses actively advertise on Facebook. More than 70 percent of those businesses are based outside of the US. But with the rising cost of Facebook CPMs, some may be forced to turn to other platforms and channels. To successfully compete against other brands, the report notes that marketers must diversify their ad spend. 

“Marketers who abandon Facebook entirely abandon one of the largest nation-states ever known to humanity. Instead of missing out on this font of audiences, marketers should be aware of when they run into audience fatigue on Facebook (the cost to find new audiences go up) and work to balance their Facebook spend with inventory that has incremental and new audiences,” Kerel Cooper, SVP, global marketing at LiveIntent tells us.

Cooper adds that as a result, marketers will turn towards other measurable media. “Most likely, that will be the email channel, where brands can be sure they are reaching a known person when they are logged-in and engaged. After all, you need to log in and open an email to have the ad served,” notes Cooper.

Listeners Can Talk Back To Pandora’s New Voice Ads

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Pandora has launched mobile interactive voice ads to build upon the hands-free feature, “Voice Mode,” it introduced to users in July. Brands like Doritos, Unilever, Comcast, Wendy’s and Ashley HomeStores have already tested the voice ad functionality, which prompts listeners to answer a “yes or no” question before providing more information about a brand or product. If a user doesn’t respond within a couple of seconds or says no, music resumes playback so as not to disrupt the listening experience.

Pandora says it used a series of voice-based tests within focus groups and internal betas to understand the best practices for marketers looking to utilize the new voice-based offering. It found that voice ads reduce friction within the listener experience as consumers saw the benefit of being able to interact hands-free when content was relevant and when creative allowed for a simple “yes.” To capture listeners’ attention and drive higher verbal engagement, Pandora helped brands use clever, useful content and explicitly informed listeners that the voice ads are a new way to engage.

The streaming platform scripted and produced voice ads for a number of brands that were invited to utilize the capability. Among the major advertisers that tested the new ads were Unilever and Nestlé while others like DiGiorno’s and Hellmann’s also gave them a shot. The audio ads give listeners a brief explanation of how they work before playing a short, branded message. For example, Hellmann’s promoted its Best Foods Mayonnaise with the following: “This is a totally new kind of ad, one you can talk to . . .want to find out how to take your grilled cheese from cheesy to yes-pleasy?” After the user responds, the ad goes on to explain how mayonnaise spreads easier than butter, ending with the sound of a crispy crunch.

Pandora started its audio initiative earlier this year when it gave users hands-free control of the app via “Voice Mode,” which according to Pandora, has been adopted by millions. With the US population spending more time with digital audio, Pandora knows voice-based ads are the new way to reach rapidly evolving audiences. According to eMarketer’s April 2019 forecast, more than three-quarters of US internet users will listen to digital audio formats like streaming music and podcasts at least once a month. Additionally, the average US adult will spend more time listening to digital audio than listening to radio in 2020.

“The rapid adoption of smart speakers has made people more comfortable and excited about general voice habits, whether on a mobile device or smartphone. Marketers, rightfully, always seek to interact with consumers through the most frictionless and native experiences. But there are also gaps in measurement in the audio space. While we know it’s effective and have means to prove that, a quick signal has not been as readily available. Voice enables people to speak back, which also provides a signal to measure,” Claire Fanning, vice president of ad innovation strategy at Pandora, tells us.

Johnnie Walker Launches Digital, OOH Campaign Through Lens of India

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Johnnie Walker Whisky is launching an out-of-home (OOH) campaign featuring the work of India’s influential travel photographers. Accompanied by a digital series, “#TheTravellingBillboard” will travel to the uncharted corners of India. Photographers will capture the billboard’s final destination, with one of them becoming the lead creative for OOH ads placed in outdoor sites throughout the country. 

The campaign is a celebratory personification of the brand’s logo, the striding man, aimed at encouraging fans to get out and explore the world. Destinations highlighted via the billboards include India’s abandoned Kuldhara village and the underwater terrain of Andamas. 

Johnnie Walker is amplifying the campaign with the help of 150 social media influencers who will capture their own journeys through a mini version of a billboard of their own. An Instagram filter exclusive to users in India is available to engage people and encourage user-generated content (UGC) that captures the beauty of Indian destinations.

A campaign targeting India’s consumers is a strategic move on Johnnie Walker’s part as the drink is particularly popular within India. Whisky, in general, is favored by India as a study from Bank of America Merril Lynch found that in 2014, Indians consumed 1.5 billion liters of whisky while the US only managed to drink 462 million liters.

Johnnie Walker received another lift in India after launching a cocktail called Johnnie Ginger in 2017. Sales of the brand have increased more than twofold in outlets where Johnnie Walker introduced the cocktail. 

In 2018, Johnnie Walker launched a multi-million dollar campaign called “Keep Walking” to honor India’s successful Mars mission. The campaign included a 20-minute short film and was activated over multiple channels including television, digital, OOH, malls and airports.

The Cost Of Consumer Attention In Our Cluttered Digital Landscape

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Originally published at AW360 by Sean McCaffrey.

We’re asking consumers to apply their minds at moments where that isn’t possible.

Can I have your actual attention? To read this, you’ll have to sacrifice part of your mind to process what I want to say, so I better get it right or you won’t come back again.

This is the basic transaction we’re making with consumers every day, and it’s easy for us to forget how hard it can be to focus. Right now, you’ve probably considered leaving this article to check that latest Twitter notification or Instagram story update. Some of you already have.

When we break through, it works. When it doesn’t, consumers move on.

That cost is tremendous when taken in total, millions of dollars every day are lost due to viewability issues (Forrester Research found that U.S. marketers wasted as much as $7.4 billion on digital display ads alone last year, 56 percent of those from ads that were either fraudulent or unviewable inventory).

It’s our responsibility to figure out what went wrong—why the message wasn’t right, how the creative could be stronger, why the targeting was off, or how to tell if it’s humans or bots who are watching. Fair enough, our daily challenge as marketers is figuring out how to optimize everything and adapt accordingly.

That’s also why capital-a Attention is creeping back into marketing narratives. Targeting and measurement today are better than ever. Sponsored content looks more like original programming than advertising. DNA-testing giant Ancestry moonlights as a partner for the show Who Do You Think You Are?, returning to NBC after a seven-year hiatus to help celebrities uncover their family histories. We’re so good at these things, yet when campaign metrics and conversions don’t meet expectations, Attention becomes the next factor to test.

It’s very difficult to find moments to reach consumers when they aren’t distracted. We think of true engagement as being deeply engrossed in original programming, binging The Marvelous Mrs. Maisel for a few hours, but 45 percent of viewers often or always use devices while watching TV.

Even the best original programming faces the same challenge brand campaigns do. What good is a great campaign if it’s delivered in a way that the intended recipient isn’t capable of paying attention?

We need to seriously consider Attention as the new engagement and targeting. So, if great content is the “What” we capture consumer attention with, perhaps we also seriously consider where and when they pay attention and give consideration the most?

According to a study GSTV commissioned with Mastercard, consumers are +3.7x more attentive to advertising when on the go. Given that consumers also check their phones 52 times a day advertisers should start addressing viewer attention by reaching them when they aren’t in their homes juggling screens.

Tune out is inevitable, and where brands win the game of Attention is being where their consumers are, leaning on the strengths of a diverse omnichannel strategy to entertain and inform consumers as their attention wanes from screen to screen. GSTV is a measurable solution to help solve the fight for attention. In fact, we have the Attention of 93 million captive adults 18+ every month, for an undistracted 3-5 minutes, in a 1:1 engagement while they fuel up their vehicles—at a natural pause point in their day. GSTV’s reach is a compliment to TV buys, boosting campaign reach and engaging consumers on days we know they are spending more money.

With content more engaging than ever, and distraction at an all time high, Attention is a vital ingredient to accelerating consumers along their journey. Meeting consumers in the right place, with the right messaging and during the right time in their day is a winning Attention formula. Advertisers who understand this and figure out how to get their message across to a captive and broad audience leveraging data and targeting, rise above and win.

What Marketers Need To Know About Amazon Influencer Storefronts

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Originally published on ION.

(Editor’s note: AList is published by a.network. To get up to speed on the rapid changes affecting the influencer marketing landscape, click here.)

In its ongoing attempt to join the likes of the Google and Facebook digital duopoly, Amazon rolled out personalized online storefronts for social media influencers. An extension to the influencer program it launched in 2017, the move could help marketers better tie influencer activity to hard product sales, in addition to amplifying reach and engagement. Here we explore the steps marketers should take to stay in front of the new platform and how to make the most out of Amazon storefronts right now.

The central difference between Amazon affiliate links and the Amazon influencer storefront is that the storefront houses links to products recommended by influencers. The storefront provides influencers with their own page and a URL to showcase their recommendations which is helpful where hyperlinking isn’t possible—for example, on Instagram captions and videos. 

Influencers must have a YouTube, Instagram, Twitter or Facebook account to qualify for an Amazon storefront. Amazon doesn’t provide much detail on how follower size impacts qualifications beyond noting that it “looks at the number of followers and other engagement metrics of the influencers’ social media presence.” Influencers who become verified on Amazon have a verified badge and link on their storefront as well as access to Amazon social experiences, called bounties, and forthcoming new benefits that Amazon has yet to disclose. Once set up, virtual storefronts can be customized through photos and a bio. The influencer program is currently available in the US, UK, Canada and India.

The move helps consumers, too, letting them easily follow storefronts to they can stay up-to-date on products their favorite influencers suggest. From there, shoppers will receive updates via email and push notifications whenever the influencer contributes new content to the site, including reviews and the creation of new “Idea Lists” on the storefront’s page.

According to Liane Mullin, COO of WhatsUpMoms, a parenting network with 1.6 million subscribers on YouTube, sales commission depends on the product category. Marketing Land reported that Amazon approached Mullin’s team about setting up their own storefront. “Our community has always asked for our product recommendations, but we didn’t really have a great solution to aggregate all of our favorite products. Amazon is a trusted site for a lot of parents, so it was an easy decision to partner with them for our first online store,” Mullin told Marketing Land. 

As for commission rates, they vary from one percent to 10 percent, as Business Insider noted. The storefront is equipped with a reporting tab within Amazon that tracks the sales of products and bounties. In addition to tapping major influencers, Amazon is also targeting micro-influencers who have small but highly engaged audiences.

In addition to Amazon influencer storefronts, there is Storr and Like To Know It, two retail concept platforms that allow users to curate collections and shopping experiences much in the same way that Amazon storefronts work. San Francisco-based Storr, which launched earlier this year, allows anyone to open their own store via their phone. Storr owners can make up to 15-25 percent on commission. Similarly, Like To Know It was created in 2017, and by the end of its first year, had over 1.3 million registered users on the mobile app and over $300 million in sales coming from its shoppers. The platform is driving influencer sales at scale, as research mentioned on Forbes noted that four of five of Nordstrom web visits came from influencer-driven referral traffic, 79 percent of which came from Like To Know It and its parent brand, rewardStyle, in 2017.

With Amazon influencer storefronts, Storr and Like To Know It, influencers are crafting experiences that are more shoppable for followers on platforms where it’s not easy to link out to a product. For example, to shop on Instagram, one must remain in the app. Custom links to storefronts simplify the user experience and expose followers to new products they potentially wouldn’t search for on their own.

While the storefronts provide influencers a new way to monetize their popularity, it’s not clear yet to what extent Amazon’s initiative will benefit marketers. The program is in its early stages and marketers currently have no access to influencers’ storefront metrics. In the beginning stages, brands will have to rely on influencers to provide traffic data, making the storefront retail concept not entirely immune to fraud.

The storefronts will, however, move marketers one step closer to understanding the value of influencer marketing beyond awareness raising. After storefronts become more established, marketers will have better insights into the conversion rates of each influencer and that data will help them navigate those relationships accordingly. The question that remains for marketers is whether or not they can retarget influencers’ audiences beyond their storefront and incorporate those consumers into their larger brand strategy. 

Unilever Debuts ‘Trusted Publishers Network’ In Battle Against Ad Fraud

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Unilever is marching forward on its battle against online ad fraud with the Unilever Trusted Publishers network. The new group of strictly vetted networks must meet Unilever’s standards of viewability, verification and brand value.

The Trusted Publishers network is comprised of yet-to-be-named digital platforms and publishers across global, regional and local levels. Each must meet stringent requirements according to Unilever’s “3Vs” that include viewability, verification and [brand] value.

In addition to meeting Unilever’s standards, members of the Trusted Publishers network impose strict expectations on whoever advertises with them regarding ad fraud, ad formatting, brand safety, traffic quality, data access and more, according to a press release.

Keith Weed, Unilever’s renowned chief marketing and communications officer, will retire in May 2019 but not before he issues another blow to would-be fraudsters. Weed will discuss the topic on Thursday at the WFA Global Marketer Week conference in Lisbon, Portugal.

“Online advertising credibility is still a global, industry-wide problem and as the world’s second largest advertiser, we have a responsibility to use our scale and influence to address this issue,” Weed said in a prepared statement. “The Unilever Trusted Publishers will add more rigor to how Unilever advertises online.”

According to a 2018 study by Dianomi, click fraud accounts for up to 90 percent of clicks for online campaigns. Despite this, Forrester found that only 19 percent of marketers had taken systematic action to prevent fraud as of 2017.

Last year, Unilever debuted its Digital Responsibility Framework that focuses what the consumer packaged goods (CPG) giant will and will not invest in. Unilever said that it would not invest in any platform or environment that promotes division, hate, fraud or a lack of influencer transparency. The brand also tackled gender stereotypes with its #Unstereotype Alliance and committed to partnering only with networks that create a better digital infrastructure.

Unilever did more than threaten digital ad networks, however. Instead, it formed an alliance that will, if all goes well, create a global solution committed to privacy, consumer experience (CX) and ad ecosystem innovation first. Partners for this initiative include Facebook, Twitter, Google, Nielsen and Kantar Media.

It’s not often that a company makes public demands of this nature, but Unilever is one of the top ad spenders on the planet. The giant made good on its threats, too—Nielsen reports that Unilever spent 29 percent less on ads in 2018.

Despite lower ad spend, Unilever reported a 51 percent increase in annual net profit for the fourth quarter of 2018. Driven by growth in India and other Asian markets, the company

reported a net profit of 9.8 billion euros ($11.2 billion) in 2018 compared to 6.5 billion euros ($7.3 billion) in 2017.

 

Report On Six Second Ads Shows Narrative Is Key

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Content is getting shorter and so are our attention spans. But, shorter doesn’t always mean better. It’s been reported six-second ads aren’t as engaging as longer ones and because these short spots don’t touch viewers emotionally. Because of the shorter time, it’s harder to build a narrative that connects consumers. Storytelling is still vital for success and new research finds these six-second ads generate a teasing effect.

Teads partnered with RealEyes to analyze the emotional impact of these ads to figure out how to make a six-second spot the most effective. The study called ‘Done in 6 Seconds: How to Make 6 Second Ads Work Harder’ studied reactions of 166 global six-second ads from 75 brands.

“RealEyes assigned each tested ad an EmotionAll® Score, a proprietary measure,” said the press release.

Viewers may be more likely to finish a shorter ad than longer ones, but the shorter ads score lower and often fail to connect emotionally. Longer advertisements have just that—more time to actually tell a compelling, emotionally-effective narrative. The study found on mobile, six-second ads have an average EmotionAll score of 3.6 compared to longer format ads at 5.1.

The study found repurposing an ad for a smaller format drives confusion and lowers its emotional impact—just cutting it isn’t the solution. It must be pre-tested to find the most effective six-second selection.

But some marketers have found ways to make this short window work, and the report offered examples. In a Snickers commercial, a grandmother holds a baby and tells the mother her sister’s baby is cuter. The ad ends with “snarky, eat a Snickers.” It has a clear narrative and ending. In another successful case, Royal Canine shows a yawning puppy with no dialogue.

The study found using a celebrity doesn’t mean an ad will automatically be successful, and these ads actually averaged a 35 percent lower score. Conversely, funny commercials drive better engagement, the more laughs the higher the score.

For a six-second ad to be profitable, it needs to be simple. If there are more than three “messages” in a six-second ad about 19 percent of respondents don’t understand it and engage with it less. The report also found sound doesn’t really matter in terms of emotional connection, they actually had the same score at 3.6. This could be attributed to how people are seeing videos on social media, which are most often muted. And whether marketers use a voice-over or not, these videos should be “optimized for off sound.”

Finally, no matter where you put the brand—start, throughout, midway, or end—it has no impact on emotion or attention. RealEyes and Teads found only 16 percent of these six-second ads had a call to action, but due to their teasing effect, consumers should be able to act in order to drive more engagement.

 

Kenshoo’s Q4 Report On Search Advertising, Instagram Spend

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Kenshoo recently released its quarterly Q4 2018 trends report, which is bursting with data. The report focused on search and social trends—these remained strong throughout the year and still continue to lead in digital advertising spend.

The report suggests marketers look at Q4 as a solid indicator of how the following year will turn out and get vital insights to better prep for 2019.

Search Advertisement

Marketers invested significant amounts in search advertising last year, as search shopping campaigns prove to be a productive return on investment resource. According to eMarketer, in 2018, brands around the globe spent more than $120 billion on search advertising, and the lion’s share came in Q4.

Kenshoo’s report revealed one peculiar data piece related to search volume growth: while spending was up 14 percent, clicks and impressions were up even higher at 31 percent and 47 percent respectively. One explanation is shoppers’ convenience to search for anything, anywhere and anytime, thanks to successful search shopping campaigns tied to mobile. According to the report, three out of every four dollars spent on shopping campaign impressions were on mobile devices.

Social Advertising Performance

Social media advertising surged in 2018, as social video ads, for example, represented 40 percent of social spend in Q4 according to Kenshoo’s report.

Instagram

Instagram, the second largest social ad platform in the world, saw a 120 percent increase in ad spend YoY. However, it is important to note that although Instagram is rapidly growing in terms of social advertising, Facebook is still dominating the field. This could be related to the fact that although widely successful, Instagram is still a relatively new player in the advertising industry arena.

The majority of Instagram ad spend growth came from advertisers who have been on Instagram for at least one year.

Per the report, “advertisers who have been using Instagram Ads since 2017 spent four times more on the channel than those who only started spending on Instagram Ads in 2018.” Also, despite being heavily criticized, Instagram stories grew faster in spending than Instagram feed. Instagram stories made up 10 percent of all Instagram ad spend share in Q4, marking a 2 percent increase from the previous quarter.

Social video ads were also up across the board, “Social video ads represented 40 percent of social spend in Q4 which was the same as Q3 and seems to be where advertisers have landed on its role in the social media plan” said the report.

Pinterest

What made Pinterest numbers unique was the growth of engagement on the platform, even before the holidays. The report shows that the ads skyrocketed in Q3, with a click-through-rate of 0.70 percent versus just 0.56 percent in Q2.

And, as a result, conversions came, Pinterest spending was 58 percent higher in Q4 than in Q3 last year.

This is a common trend on the platform because consumers check Pinterest for gift tips and inspiration in advance of the holiday season. This is what makes Pinterest a great channel for creating buzz around the products in the times when the users are only “shopping” for ideas and not things.