This week WARC launches the Marketer’s Toolkit 2022. This is our guide to the major trends marketers need to respond to, and the new research and techniques they need to be on top of, as we hurtle towards a new year.
It’s always a great opportunity to take stock of what we’ve learned, and to review what marketers are telling us will be important next year – both in one-on-one interviews with CMOs, and via a global survey.
And it’s only fair we go back and look at what we said last year in our Toolkit for 2021. Did we get it right? Or was our crystal ball malfunctioning?
For context: last year’s report was put together pre-vaccine and pre-Delta. But our core assumptions – that H1 2021 would look similar to 2020 then H2 would see some progress toward ‘normality’ – hasn’t been far off in those markets that have been able to roll out large-scale vaccination programmes.
Here are some of the highlights:
1. Responding to recession
Thanks to government stimulus, the economic impact of the pandemic – for example, on rates of unemployment – has not (yet) been as bad as we feared 12 months ago. But many of the implications of economic volatility we looked at last year have been borne out.
What we said
“The increasing focus on short-term KPIs means marketers will prioritise media channels that shorten the purchase funnel, and reduce the number of steps a consumer must take from ad exposure to final conversion. Likely recipients of additional ad spend include Amazon and omnichannel retailers like Walmart and Kroger, which continue to build out their media businesses, as well as Chinese platforms like Tmall and WeChat.”
The rise of ‘retail media’ and the shift of budget closer to the point of purchase has been one of the biggest themes of 2021.
Amazon’s ad revenue growth this year has been astonishing. In Q3 it rose by 50%.The broader ‘retail media’ sector, covering ad revenues on Walmart, Instacart and others, was up 55% in Q2. Now any retailer with strong first-party data is looking at ads as a possible revenue stream – Boots in the UK, for example.
Next up: social commerce, as social media platforms look to capitalise. A recent study produced by WARC and TikTok looked at the promise of ‘community commerce’. There is a lot of road still to run here.
2. Staying effective in the age of e-commerce
Building on the previous trend, we looked at the implications of the rise in penetration of e-commerce on marketing effectiveness.
What we said
“Studies have shown the value of a strong brand in an e-commerce environment, including Google’s recent exploration of the ‘messy middle’ of online purchase behaviour. Advertisers such as adidas have concluded that branding is 'fundamental’ to e-commerce success.”
This has been one of WARC’s key areas of focus over the past year. In June we launched a white paper ‘Rethinking Brand for the Rise of Digital Commerce’. This made two arguments:
- That large brands should be wary of mimicking the performance-led approach of start-ups. The evidence suggests start-ups hit a ‘demand ceiling’ at which point many start investing in brand-building techniques to build ‘future demand’. (In fact, ‘future demand’ may be a more helpful term to describe brand-building.)
- That strong brands retain an advantage over weaker brands in e-commerce environments, based on at least four factors: fame, mental availability, recognition and perceptions of value.
We’ve seen this play out in a few ways. Digital native brands are now some of the biggest spenders on television – a good example mentioned in the white paper is Etsy, which now runs emotionally charged TV campaigns alongside its performance ads.
As marketing and digital commerce move closer, this will be an increasingly important debate.
It’s also worth pointing out what hasn’t happened in the digital commerce realm. Livestreaming was something we expected to see more of in Western markets based on the Chinese experience. We think there’s still potential there as the ‘retail media’ environment is built out, but it’s still at a test-and-learn phase.
3. Engaging at-home consumers
2021 saw continued lockdowns across major markets – and we looked at some of the implications of consumers spending more time at home.
What we said
“When planning media strategy, factor in new viewer behaviours. The surge in use of gaming platforms, for instance, calls for new marketing approaches. Gamers take a dim view of advertising that interrupts game play – but on the other hand, they are amenable to brands hosting customer communities.”
Marketers of a certain age will remember the time in the mid-noughties when every year was going to be the ‘year of mobile’. And then it wasn’t. (Until, of course, the iPhone changed the game completely).
Gaming feels a little like that – time spent gaming keeps going up (some data shows Gen Z and Millennial cohorts spend more time gaming than on social media), but it’s still not clear how best marketers can work in this space. There are great examples of course (Samsung is particularly forward-thinking here). But they’re exceptions rather than the rule.
Yet the importance of gaming in culture is having other knock-on effects, particularly in the ‘creators’ it spawns (via platforms like Twitch) and the audiences they build. ‘Fandom’ is a key aspect of what is called the ‘creator economy’. Brands working with creators to engage gamers is a growing trend.
4. Succeeding in the closed web
We looked at the growing power of the platforms and the death of the cookie – and how marketers were responding with new approaches to media investment and measurement.
What we said
“In 2021, marketers can expect attention measurement to begin to shake up existing media planning processes – for example, by giving new ways of comparing channels and formats, allowing brands to optimise investment.”
The cookie-pocalypse has been delayed somewhat – though the impact of Apple’s privacy changes on Snap’s share price may be a sign of things to come.
But we were spot on with the prediction around attention.
Landmark papers have been released by two pioneers in this field - Professor Karen Nelson-Field of Amplified Intelligence and Lumen. Two particularly interesting ideas that have emerged:
- The idea of an attention strategy – for example, a well known brand with strong assets may choose media with different attention profiles than a new launch.
- Using attention to weight share of voice.
One thing really driving the focus on attention is lack of trust in the data that comes out of the major platforms. There’s no sign of that stopping. Facebook’s rebrand to Meta won’t change the feeling – captured for the past few years in the Marketer’s Toolkit survey – that the digital ecosystem needs fundamental change.
5. Structuring for volatility
Even before the Delta variant hit, 2021 looked like it would be a tricky year to navigate. We asked what marketers were doing to move from tactical responses to events to a more strategic approach to a volatile world.
What we said
“Arguably, purpose has been reclaimed in 2020. Instead of grand gestures aimed at saving the world, many brands during the pandemic looked for tangible ways to help, even if just at a local level. This theme of ‘acts, not ads’ will continue in 2021 as the pandemic rages on and recession begins to bite.”
Well it’s certainly been volatile. And purpose is a bigger focus than ever. We’ve seen plenty of brands ‘acting’ in the wake of the 2021 lockdowns and will no doubt see plenty more on the back of COP-26.
But purpose also remains a lightning-rod issue that polarises practitioners. Critics argue, with some justification, that it is poorly defined. Many question the evidence marketers use to justify it, and argue it is a distraction from the important business of building brands and selling products.
Take a new study from UK researcher Peter Field that looked at the use of purpose in IPA Effectiveness Awards cases. Field’s rather common-sense conclusions – that purpose can work well if executed properly but is near-useless in the many examples where it is not – were drowned out on social media by criticism of his methodology.
6. Finding the white space in wellness
What we said
“Beyond brands that typically fall in the health and wellness sector, the COVID-19 pandemic has made consideration of health and hygiene a necessity for everyone. These sweeping changes range from COVID-secure retail and travel, to financial brands flexing to meet the needs of stressed customers unable to work through lockdown and recession.”
All of the above! Health (both physical and mental) is arguably even more pressing two years into the pandemic than it was in 2020.
A study by Publicis Health earlier this year found this manifesting in several ways:
- Prolonged hesitancy regarding travel due to health concerns – one response has been for travel brands to partner with cleaning brands to reassure customers.
- An acceleration of interest in mental health. (Twitter research also identified this as a major focus for consumers.)
- Digital healthcare consolidating the gains it made during lockdown.
- The long-term impact of ‘pandemic procrastination’ – for example, delayed screening of patients with cancer symptoms.
So, overall we didn’t do too badly – a couple of misses but a lot of hits too, despite the challenges of 2021. Watch out for our guide to 2022 later this week.