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Seven Rules for Winning Q4 in 2020

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Once again, we find ourselves in an ever-evolving economic and cultural landscape. The role of advertising in creating demand has never been so important, but some adjustments will likely be required to account for a different shape of Q4 than we have seen previously.

Here are our seven rules for winning in Q4 2020.

  1. Flex to local behaviours 

Unlike the national lockdown in spring, restrictions are likely to be unevenly distributed.  Local lockdowns such as those currently being imposed in the North East mean that flexibility in media planning will be vital. For any advertisers planning national campaigns, we need to build a winning strategy around flexibility to circumnavigate this.

  1. Monitor market value

Our forecasts for Q4 currently indicate that the market remains in a state of recovery, with the importance of a strong Christmas trading period being hugely influential in keeping ad spend on a growth curve across all channels. As with all planning and buying, the audience being traded will have a significant impact on how cost-effective each channel will be.

  1. Help people make more considered choices

The7stars Lightbox Pulse identified that while 28% of shoppers are worried about the cost of gifts, 1 in 10 are planning to gift to more people than usual over the festive period. It is also therefore likely that gifting choices may become more sentimental, after such an anxiety riven year in which people have re-evaluated the importance of friends and family.

  1. Prepare for the homebound economy to accelerate

Online shopping is set to shift even more online, with around half of UK consumers saying they will do more shopping online than last year, as people become less motivated to browse in-store. It is important to note that the highest growth rates over the past few months came from multichannel retailers, not pure-play online retailers, many of them innovating with click and collect offers that made use of their physical footprint.

  1. Adapt phasing for ’12 days of Christmas’

1 in 3 Brits said they will be hosting more celebrations at home than usual. ​1 in 10 say they plan to have multiple celebrations with different groups of friends/family​. This means that media phasing may need to adapt to reflect a flatter season with less of the extreme peaks we usually witness in the festive period and more of a ‘plateau’ across a sustained period.

  1. Embrace empathy and humour

There is some evidence that over-earnest communication now more than ever lacks the ability to move people and risks being lost among other worthy pieces of communication.​ In fact, 3 in 4 consumers approve of brands providing funny or light-hearted content.​The more agile you can be and control the creative after launch the better.

  1. Offer optimism 

20% of Brits also feel that brands can play a role in boosting morale over the festive period. Brands could also put a more positive spin on 2020, capturing all the things that people made happen or started new hobbies and experiences. Equally, it could be about looking forward, inspiring people to start making 2021 plans around festivals, sport and holidays.

Google Pass 2% Digital Services Tax to Advertisers – Isn’t That The Best Decision For Everyone?

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At the start of the month Google announced that, from November, it will be passing on digital service taxes to advertisers by adding a 2% fee for ads served on Google.

Naturally, the decision has been met with frustration from advertisers, who will now have to decide if they absorb the extra cost or pass it onto their customers. Not an easy decision to make in the current environment.

But is this simply a case of “tech giants” abusing their dominance or is there something else at play here?

Firstly, if any business is to receive a new and increased cost to itself, what would be the standard course of action? They’d naturally find a way of absorbing that cost or avoiding it, if possible. And therein exposes two problems with this tax. One in that it is essentially not fit for purpose, and two in that it does nothing to address the bigger issue of market dominance.

Essentially, one way the digital services tax is not fit for purpose is that it doesn’t acknowledge how tech companies like Google generate the majority of  revenue from auction-based advertising, where the costs are determined algorithmically by the amount of advertiser competition.

Other than this, perhaps Google would have to find a way of paying for the tax through business cost reductions. So, naturally Google have taken the easiest decision and arguably the best one – even for advertisers. Because, eventually, the market will adjust to it. Advertisers have a decision to make themselves when the tax arrives. They either take on the increased cost and accept a slightly lower ROI on their advertising, or they reduce the price they’re willing to pay for that advertising in the first place. In an auction, if enough advertisers choose the latter then everyone should see a reduction in media costs and therefore still achieve the volume of ad delivery they have been used to for their budget.

In the short term it’s more expensive, but in the long-term equilibrium returns and everyone ends up paying what they’re willing to in order to generate the ROI they want.

And Google are quite transparent about it:

“Digital service taxes increase the cost of digital advertising,” said a Google spokeswoman to the Guardian. “Typically, these kinds of cost increases are borne by customers and like other companies affected by this tax, we will be adding a fee to our invoices, from November. We will continue to pay all the taxes due in the UK, and to encourage governments globally to focus on international tax reform rather than implementing new, unilateral levies.”

Basically, don’t hate the player…

Perhaps this is insincere and Google know international tax reform is a pipe dream. Perhaps passing the Digital Service Tax directly to advertisers is more a statement than a necessity. Regardless, the impact to advertisers may be limited in due course once the auction prices adjust. So maybe it’s actually the best decision for everyone.

The Land Of Independents

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This month the7stars joined forces with sixteen of the UK’s biggest independent media agencies to launch an ad campaign that promotes the £1.8bn (Nielsen) indie sector, as the destination of choice for progressive brands.

The ‘Land of independents’ launched on the 14th Sept with a national outdoor, print and digital campaign created by Creature. The growth of the independent sector has been a rapid – almost five times faster than the rest of the market – which is something worth celebrating and why we all united to form this campaign.

The collaboration aims to highlight how crucial the independent sector will be in the UK’s economic recovery, and its contribution to growth within the advertising world. Over the past three years, the independent sector has grown ahead of the market and this campaign is aimed at supporting future positive momentum.

The collaborative effort came about after a series of meetings which began in April and continued through lock-down.

“This crisis is demanding that we reframe ad messaging in new and unexpected ways. Independent media agencies are agile enough to do exactly that,” our very own Jenny Biggam explained. “We are typically built upon open, non-hierarchical structures to foster bold ideas and strategic clarity. It’s a formula for fast, impactful results.”

Dan Cullen-Shute, co-founder and chief executive of Creature, added: “There has been a genuine sense of excitement and collaboration of people who believe in what they’re doing and it’s been amazing to be a part of… In that first meeting it felt like we walked into a different land – we left adland, an introspective make-sure-no-one-copies-your-answers territory, into a brighter, braver place.”

The independent sector is built on the values of collaboration, entrepreneurialism, flexibility and service. And long may it continue.

What Life Looks Like For OOH Now?

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As more people become accustomed to the one-way systems and sanitisation procedures in the dining and retail sectors, the easily observed reduction in consumer visits to stores and restaurants is starting to plateau and hopefully this means a return for one of the channels that was heavily impacted over lockdown – OOH – however, the game has inevitably and certainly changed.

Covid has accelerated the evolution of brand-to-consumer and even B2B interactions and relationships – we only need to look at the increase in use of apps like Zoom and Teams to appreciate this trend. Innovations in the OOH space have also been fast tracked due to Covid  – and we expect to see this include the adoption of DOOH tech. [3]

OOH is famed for effectiveness through high reach but the pandemic has led to its large scale audiences decreasing in certain demographics [3]. Key areas for OOH such as airports and the London Underground are still experiencing a dramatic decrease in footfall[2]. This means that OOH will likely have to become a more targeted and outcome-based channel to justify its use. Luckily there has been ample investment into digital screens and infrastructure over the last decade.

Bitposter and Clearchannel’s partnership with traditional OOH key-players has meant that many paper and paste locations have been digitalised, whilst Global’s purchase and integration of Exterion and Primesite (linking DAX with their digital outdoor sites) has meant data-led buying has become a reality. This also goes beyond media buying and into execution, with Ocean Outdoor releasing mid-air haptic interaction, to replace their touchscreen equipment [4].

Whilst innovation development has been fast tracked, the dynamic of clients that they were designed to serve has shifted.

The ad spend market has shifted in line with the change in consumers priorities. Essential goods, tech, and the high-frequency Public Health England campaigns have recently ramped up media spend [5], whilst industries like the restaurant sector have seen dramatic cuts. Ironically, OOH was a key channel for PHE in communicating key messages and provided a smart, empathetic and trustworthy platform [3].

So, what’s next for the restaurant sector? American super-chain McDonalds have bucked the trend, as even though they reduced their budgets by 100% during lockdown, they are now keen to use their ‘war chest’ of advertising budget for Q3 and Q4 [6].

As for the restaurant sector as a whole, total media spend was down dramatically for May and June YoY (-91% and -86% respectively), and OOH is no exception. Whilst we are seeing an improvement in August spend and expect to see more buoyant results in Q4 overall, it will be interesting to see how brands use OOH in Q4 – particularly for Christmas which is typically a strong period for OOH [1].

1] https://www.marketingweek.com/consumer-spending-retail-footfall-christmas-5-interesting-stats-to-start-your-week/

[2] https://www.telegraph.co.uk/news/2020/07/17/charts-has-covid-brought-end-daily-commute/

[3] https://www.campaignlive.co.uk/article/ooh-back-not-know/1691428

[4] https://www.essentialretail.com/news/ocean-outdoor-touchless-ad-screens/

[5] https://www.campaignlive.co.uk/article/nielsen-uk-adspend-dived-48-lockdown-brands-pulled-11bn/1691019

[6] https://www.marketingweek.com/mcdonalds-spend-marketing-warchest-coronavirus/

Back To School, Back To Reality

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In previous years we’ve looked to September as a time of optimism and a moment to reset after the highs of summer. This year, the backdrop of recession and returning to work and school after many months of life at home means advertisers need to think a little differently about what this period holds for their audience.

2020 has seen uncertainty reflected in a delayed interest in “back to school shopping” with Google search trends rising two weeks later (from the 3rd week in July) vs the last 5 years (typically beginning to rise from early July)1. As the government’s campaign for a safe return to schools gets underway, here are three ways we’ve seen advertisers shift their approaches to Back To School marketing in line with the new reality:

Continued growth of online: Back to school shopping is no exception to the significant growth in online shopping. According to research over 90% of parents with kids and university students will shop online for back-to-school2. For retailers in particular we have seen an increase in “buy online” messaging, with Sainsbury’s and Tesco both reflecting the wider shift to online grocery shopping within their creative copy.

A focus on hygiene: Sanitiser, masks and cleaning supplies have made their way to the top of the list of essentials2, displacing historical focus on items like technology. As a result, new brands are finding ways to be a part of the back to school moment. Dettol’s recent campaign focuses on laundry detergent as parent’s get ready for the school uniform laundry routine while Boots have recently launched a radio campaign focusing on children’s vitamins.

The importance of empathy in uncertain times: Back to School represents a significant milestone for everyone in the context of lockdown easing, and with this reassurance is key. Research in the US has show that advertisers treading the line between positivity and empathy are seeing their ads resonate stronger with consumers3. This sits at the heart of Very’s back to school campaign, which focuses on “back to school joy for everyone” – acknowledging the positives in a distinctive way that helps cut through an increasingly competitive moment4.

For many marketers, seasonal milestones like Back to School involve tried and tested methods and well-established consumer behaviours. But as we move through these milestones in the context of the pandemic, challenging what we know about consumers and their behaviours is key to maximising opportunities new and old.

1https://trends.google.com/trends/explore?date=today%205-y&geo=GB&gprop=youtube&q=%22back%20to%20school%22

2https://blog.rakutenadvertising.com/en-uk/insights/infographic-back-to-school-shopping/

3https://www.marketingdive.com/news/retailers-back-to-school-ads-resonate-by-empathizing-with-uncertainty-stu/583443/;

4https://www.youtube.com/playlist?list=PLfGCjZWWx9n3HkCnu3ElVA_gog4HisSjj

 

VOICES4ALL

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Minority ethnic groups account for 8.1 million people in the UK: that’s 13% of the UK population and is continuing to grow. Yet no matter how sophisticated its techniques, consumer research is somehow failing to break through and extract insights from one of Britain’s fastest-growing and most influential demographics.

The same oversight applies to other minority groups, such as those who identify as LGBTQ+ (2.2% of the UK population). These are all significant consumer groups. So how can brands move from “we think” to “we know” – the golden mantle of all robust market research – if these voices aren’t included as an integral and assumed part of that knowledge?

In short, they can’t and we run the risk of creating generalisations about groups, who can be vastly different. But this lower level of representation is in part driven by a number of practical barriers; reaching robust sample sizes in these groups is expensive. As an example, to send a questionnaire to someone who is LGBTQ+ would be £8-£10 compared to someone who is a main shopper, which would be £1.25-£2. In addition, to translate a questionnaire to Polish (the second most spoken language in the UK) would cost £350-£390. Equally the repercussions of mishandling sensitive data such as ethnicity, religious, sexual orientation due to GDPR paired with a fear of offending has in some instances created an avoidance of ensuring these groups are represented in research.

But when we are conducting nationally representative research, we shouldn’t be hindered by these practical barriers and a definition that doesn’t reflect modern society. Currently within the UK the definition of nationally representative research requires quotas on: age, gender, social grade and region meaning that ethnicity and sexual orientation are not included with the definition. If these aren’t included then research cannot claim to be nationally representative if it’s not based on an effort to reach all sections of society. Worse still, by failing to do this it runs the risk of making clumsy and misleading generalisations.

At the7stars we believe that the research we conduct should reflect the views of all voices in society, therefore one of the first steps we have taken is to come together with five other founding partners to create Voices4All, a movement committed to improving diversity and inclusion standards within research services.

We have signed the open letter that calls for action to make ethnicity and sexual orientation (in addition to age, gender, region and social grade) quotas a minimum requirement for all NatRep research samples. As such, moving forward all new proprietary nationally representative research from the7stars will include ethnicity and sexual orientation within our quotas alongside age, gender, social grade and region.

We invite you all to sign up to join us in raising diversity and inclusion standards across the Market Research and Marketing Industries, https://www.voices4all.co.uk/. Ensuring that all voices are heard.

 

Generation Game

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Lockdown united the nation, but as we emerge, underlying concerns faced by audiences are diverging once more. These play out differently by generation: baby boomers face short-term unhappiness driven by fear of the virus, whereas Generation Z face an uphill uncertainty over their future. Brands should adapt their comms to address these differing anxieties.

Touchpoints’ data from earlier this year showed an increasing divide between the media habits of Baby Boomers and Generation Z.  But then COVID-19 arrived, along with a swathe of lockdown restrictions. The result? The nation was united by Zoom calls, Thursday nights clapping and daily government TV briefings.

Differences in lifestyles were smoothed over as younger audiences, usually out and about, were homebound. They rediscovered the joys of in-home experiences such as live TV and took up new hobbies to pass time, like baking and crafts (1). Meanwhile, older audience adopted new digital behaviours to keep connected with the outside world.  Over half of 55+ used video calling to stay in touch with family and trialled online shopping (1). This gave brands an opportunity to reach both generations in new places.

But as we come out of lockdown, it’s important to acknowledge the differences re-emerging in these audiences – while there may now be more similarities in media consumption than pre-lockdown, their concerns and challenges post-lockdown differ significantly.

On the face of it, Generation Z seem able to bounce back from the disruption of quarantine. They have more spontaneous lives and so are more responsive to changing advice: over a third are already comfortable returning to pubs (2).  However, this short-term confidence disguises the longer-term uncertainty they face. They are now more likely to suffer unemployment and financial concerns, added to their existing worries for the future of the planet more broadly. This makes them more susceptible to two different levers: value and brand values. This means showing why a brand is worth share of their wallet by demonstrating what it stands for in the current cultural context.

By contrast, Baby Boomers, who profited from booming property prices, are less concerned about finances. Despite this security, almost half report feeling less happy than this time last year (1), and 80% are worried about a second wave (2). For them, the worry is not financial health, it is personal health. Their need for short term reassurance means brands should use trusted comms channels and create customer experiences that address these concerns.

Are there new audiences or new advantages that brands can speak to by solving the issues faced today? Likely yes. But first, just as audiences have adapted to the changing world, brands must challenge their pre-lockdown beliefs.

 

1 the7stars QT

2 YouGov “Returning to the Pubs” https://yougov.co.uk/topics/food/articles-reports/2020/07/24/how-do-brits-feel-about-reopened-pubs

 

How Will The HFSS Ban Affect Advertisers

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On Monday 27th the government released their latest policy paper “Tackling obesity: empowering adults and children to live healthier lives” which includes a ban of HFSS products being shown on TV and online before 9pm. The government intends to bring the ban into place by the end of 2022.

During the next year the government intends to research making the ban stricter for online advertising which would ban HFSS products all together.

Next stages in roll out of the legislation:

  • The government will publish the results from their consultation in 2019 on the pre 9pm ban by the end of 2020.
  • The government will launch a new consultation on a full ban on HFSS advertising online as soon as possible.
  • Following this they will then propose the new legislation to the House of Commons and House of Lords for a vote before being presented as a new law which the government aims to have completed by the end of 2022.

Leaders from across the UK’s advertising and media industries have written to the Government. The letter has been signed by the following leaders: Stephen Woodford, CEO, Advertising Association; Paul Bainsfair, DG, IPA; Jon Mew, CEO, IAB UK; Phil Smith, DG, ISBA; Lynne Anderson, Deputy CEO, NMA; Owen Meredith, MD, PPA; Richard Reeves, MD AOP.

“A pre-9 pm watershed ban is an out-of-date solution that has been discredited as an effective solution to obesity, whilst a total ban online is a blunt and totally disproportionate proposal that completely disregards the fact that advertisers target their ads very accurately at adults and away from children online. These measures would have far-reaching consequences for businesses large and small, as well as for broadcasters, producers and publishers. They would ride rough-shod over ASA self-regulation which has proved to be so successful over the last 60 years. Furthermore a complete online ban has not been consulted on.”

Channel 4 have said, “we remain ready to collaborate with the Government to identify solutions and play our part in supporting this vital objective of combating obesity, as we have done in the past through a wide range of programmes that have focused on healthy eating and get fit initiatives”.

This change comes at a time when TV houses have only just started to recover from the impact of Covid-19 and is a further blow to the advertising industry. Estimates are the proposed bans could cost British broadcasters £200M in lost revenue.

It puts greater restrictions on media channel selection with the ban across TV and online channels. This may see advertisers move towards channels which are not covered by the ban such as Radio, Print, Cinema and OOH outside of TFL.

The biggest question for brands, due to the vague nature of the report, is whether HFSS deemed brands will be able to still advertise at brand level with just HFSS products prohibited or if it is a complete ban all together. In addition,  what level of categorisation will be used to determine whether or not a product is HFSS. At the7stars we will keep up to date on the latest developments as we move towards the ban coming into place.

Honesty Is The Best Policy

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Since the start of lockdown brand trust has become more important and consumers are more willing to call brands out for inauthentic and bad behaviour, especially on social media. Understanding and reflecting the mindset of the nation has therefore never been so important for brands.

As we spend more time on social media our expectations of platforms are also evolving. Ofcom’s Online Nation report shows we spend 18 minutes more on social media since lockdown began (vs 3 mins on news sites)1. Alongside this 40% agree they feel less pressure to portray perfect or unrealistic images of themselves on social (rising to 51% of GenZ & millennials)2.

This desire for authenticity and humanity is something consumers expect from brands as well. Kantar’s latest BrandZ report highlights the increasing importance of brand trust as a driver of growth (3x rise in contribution of corporate reputation to brand equity over the last decade), with “honesty & openness”, “respect & inclusion” and “identifying with & caring for consumers” the three main traits shown by trusted brands.3

This emerging ‘Era of the Public’3 is playing out faster than ever on social media. As the most responsive and reactive channel most marketers have, consumers expect progression not perfection from brands.

A recent study by Twitter found that only 7% of surveyed users want brands to return to their ‘normal’, pre-COVID tone of voice on the platform4. And in the context of wider societal issues and injustices that have played out alongside the pandemic on social platforms (from Black Lives Matter to trans rights and misinformation to name but a few) brands must build an open and accountable voice within social channels.

Social media can also drive understanding of the mood and mindset of the nation to inform paid campaigns alongside organic responses. Carlsberg’s recent campaign “Welcoming Back to the Pub” was fuelled by close daily monitoring of consumer sentiment and opinion, ensuring no message was tone-deaf or out of sync with ever-changing attitudes to lockdown easing5.

With ever-increasing scrutiny on social media platforms, brands must take the time to reflect the authenticity and openness that consumers expect from them. Humanity has been one of the defining features of COVID, and brands that fail to use social media to understand and connect with consumers will be called out quicker than ever.

1Ofcom ‘Online Nation’ 2020 – https://www.ofcom.org.uk/research-and-data/internet-and-on-demand-research/online-nation

2Global WebIndex & WeAreSocial June 2020 – https://blog.globalwebindex.com/trends/social-media-covid-19/

3Kantar BrandZ Report 2020 – https://online.pubhtml5.com/bydd/yeib/#p=1

4https://www.campaignlive.co.uk/article/brands-not-revert-pre-covid-messaging-twitter-study-finds/1689652

5 https://www.marketingweek.com/carlsberg-marketing-campaign-welcome-back-pubs/

Pandemic Programming Home (Made) Is Where The Heart Is – For Now

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As the global pandemic pushes every sector to think out of the box creatively, the UK’s commercial broadcasters have played their part, none more so than the production of new TV content in these tricky times – pandemic programming.

Like with any sector the show must go on, as normal routines have been cast aside, it is up to the broadcasters to provide some sort of comforting normality in the schedule. From breakfast to chat shows, from afternoon quizzes to evening news, then finishing with a soap or drama to end the fifth Monday feeling of the week. Since the beginning of lockdown on 23rd March, we’ve all been glued to our televisions, with individual impacts across the major stations up  year-on-year (March +26%, April +20%, May +8%, June +8%) and broadcasters have had to adapt in order to produce new content.

The viewer like anybody has the desire for new material and in the current circumstances broadcasters are making ends meet. Every broadcaster has utilised homemade content, from Channel 4’s The Last Leg: Locked Down Under which broadcast simultaneously from Melbourne, London and Huddersfield to ITV’s Isolation Stories, four short dramas depicting life in lockdown and what families are going through during isolation. Even our very own Smithy has had to perform his Late, Late Show amongst a backdrop of some fetching décor in his garage on Sky Comedy.

In late May, the UK’s biggest broadcasters agreed guidelines endorsed by the Department of Digital, Culture, Media and Sport to resume filming popular programmes such as Coronation Street, EastEnders, Emmerdale and Top Gear as archive episodes began to run out. This came as a timely response, with the UK being one of the most important film and TV locations in the world with a record £3.6bn spent on making more than 300 movies and high-end TV productions last year (Guardian). Yes broadcasters have saved money in producing this pandemic programming, but has it come at a cost of quality? We may in the future see an amalgamation of cheaper homemade programming (instead of repeats), supplemented by our big production shows. The fact that every broadcaster is in this current position aids the popularity of pandemic programming, but no broadcaster will want to be left behind and still show this user-generated content whilst their rivals brush off their shiny cameras and large production sets.

Television has always provided the element of escapism and fantasy for a viewer, such as Game of Thrones (Sky Atlantic), Tiger King (Netflix) & Derry Girls (C4). The popularity of these lockdown created shows may be down to the fact that everybody is doing it and there is no other alternative. Once our lifestyle becomes more ‘normal’ and restrictions pass, everybody will be dying to meet Lord Sugar’s next Apprentice,  gripped to see who’s the latest to have a soggy bottom in front of Paul and Prue,  and keen to see who is who’s type on paper around the firepit in