M&S says its marketing is going further amid budget cuts
Although its CEO Steve Rowe insisted things were on the “right track”, M&S’ annual results were a difficult read this week. Pre-tax profits fell a whopping 63.5% to £176.4m – something Rowe blamed on restructuring costs – for the financial year to 1 April. And like-for-like sales in its struggling general merchandise division fell 3.4% – a return to decline following a surprise growth over Christmas.
For the period the retailer spent £162.7m on marketing, which amounts to £23m or 12.6% less than the year before. And reducing its advertising budget at a time where perceptions of its fashion quality are at an all-time low appears questionable.
However, M&S CFO Helen Weir insists advertising effectiveness is actually improving. She says the Christmas Mrs Claus campaign proved the retailer could get “more from less” out of its marketing.
“Because we were able to make use of social media, the customer views and customer impact was actually greater,” she told Marketing Week. “Its about using both the traditional advertising through traditional media and overlaying that with social media that enables us to get more bang for a buck.” She’ll be hoping she can also get more buck out of consumers in fashion, and fast.
Walkers Crisps social media fail
The last thing Walkers Crisps would have wanted was a campaign that featured long-term ambassador Gary Lineker appearing next to serial killers Fred West and Harold Shipman, but that’s exactly what they got this week.
The #WalkersWave campaign allowed consumers to tweet in a picture, with a video created automatically on the Walkers Twitter feed showing ex-footballer Lineker holding up their picture and showing the individual doing a Mexican wave.
However, instead of uploading selfies people sent in pictures of notorious killers and sex offenders, including Jimmy Saville and Rolf Harris.
Walkers has since suspended the campaign. It said: “We recognise people were offended by irresponsible and offensive posts by individuals, and we apologise. We are equally upset and have shut down all activity.”
The social media fail matters because it’s yet another example of a brand naively placing control in the hands of the consumer. You have to wonder whether Walkers had any sort of filter to eliminate suspect entries for #WalkersWave.
Equally, the campaign has generated a lot of attention for the crisps brand. Had it all gone to plan, would Walkers have got anywhere near the same level of coverage? Conspiracy theorists; over to you.
Google wants to move us away from last-click attribution
Last-click attribution dominates digital marketing, largely due to its ease of measurement. However, Google is looking for ways to move beyond it.
This week it announced ‘Google Attribution’, an AI-based service it says will “take the complexity out of a very complicated problem”. It aims to help marketers better understand how their marketing efforts work together to lead to a sale, and therefore how to make their marketing more efficient and effective.
“On a daily basis Google Analytics processes half a trillion digital moments across devices. What we are trying to do is use tech and machine learning to help make ad platforms more useful, easier and better connected,” explained Google’s VP of produce management Jerry Dischler in a press briefing.
The announcement matters because attribution remains one of the more difficult areas of advertising, with many marketers critical of the last-click model because it analyses events a marketer can’t influence. It also assigns 100% of the value to the last traffic source and ignores the first or intermediate sources, which often have a bigger impact on purchase decisions.
Heineken puts a big bet on non-alcoholic beer
We’re a nation of pub dwellers so historically non-alcoholic beer launches haven’t gone down too well. However, Heineken is looking to change that.
It has has launched ‘Heineken 0.0’. As the name suggests it has no alcohol, just 69 calories per bottle in fact, and is available in 14 markets. It also has a blue bottle design to make it stand out on the shelves.
A 2016 report by Mintel shows almost one in five (19%) of Brits aged 18 and over do not drink alcohol, while 32% of Brits say they have limited or reduced the amount of alcohol they drink. This suggests the launch is based on sound logic.
Heineken’s biggest challenge will be around taste, according to Anna Ward, alcoholic drinks analyst at Euromonitor. She told Marketing Week: “Convincing consumers that recent developments have resulted in non- or low-alcohol beers comparable to standard counterparts presents a sizable challenge to be overcome.”
According to Mintel, penetration of lower-alcohol drinks is higher among men and significantly above average for 18- to 34-year-olds. So it might also be wise to focus the beer on both men and women, and avoid the mistakes of previous non-alcholic beer launches that almost stereotypically targeted women.
Whether Heineken 0.0 becomes a big success or is quickly forgotten, it’s clear marketing and branding will play a crucial role in its journey.
Marketers return to commission-based pay models as rebate reports turn their heads
Marketers are moving away from using fee and incentive-based agency models in favour of compensation models as they look to “simplify” the relationship with their agencies and ensure they are getting the best value for money, according to a new report released this week.
The research, by the US advertising association the Association of National Advertisers (ANA), says brands are becoming more aware of their agency compensation packages. It found that the involvement of senior management in agency negotiations has more than doubled from 33% three years ago to 77% in the most recent survey, undertaken in December 2016 and January 2017.
The involvement of finance, meanwhile, nearly tripled from 15% to 45% over the same period, with half of the respondents stating they had “recently changed” their rebate and bonus models.
The report is a sign that brands are “waking up” and looking to clamp down on controversial rebate deals, which were thrust into the spotlight after a separate ANA report last year. Or as ANA CEO Bob Liodice explained: “It indicates that marketers are taking up that challenge by aggressively addressing transparency concerns and streamlining and simplifying agency compensation practices.”
The message from marketers appears to be that agencies need to get their houses in order, and fast.