Festive fever hits UK advertising
Forget Diwali and Bonfire Night – this week has seen the Christmas advertising season begin in earnest, with a number of major retailers fighting to get their festive campaign out first.
Among those adverts to have launched this week was the always much-anticipated John Lewis Christmas ad, which tells the story of a 14-year-old boy who meets a crash-landed alien and introduces her to his family’s festive traditions, before she returns to her home planet.
Where John Lewis once represented the pinnacle of Christmas advertising, this year’s rendition has divided opinion among marketers, with some crediting its emotionally driven story and unassuming diversity, while others criticised it for a lack of creativity and “creepy” vibe.
Some of John Lewis’s critics looked more favourably on Boots’ Christmas offering this year, a film featuring a “magic” bottomless bag of gifts, actress Jenna Coleman and a sweet relationship between granddaughter and grandmother.
The biggest campaign by the retailer in more than four years, Boots’s chief marketing officer Pete Markey told Marketing Week it builds on the notable success of the brand’s summer advertising push, while including more data-driven targeting than ever before.
Disney, meanwhile, is hoping to replicate the success of its first consumer product Christmas campaign last year with a typically Disney-esque animation, which pulls on heart strings with a depiction of a step dad bonding with his step children.
And M&S launched two campaigns, one for its food business and one for clothing and home. The former brings Percy Pig to life for the first time with the voice acting of Tom Holland, the current Spiderman. Interestingly, marketing director Sharry Cramond is anticipating that social media will play a bigger role for the brand’s campaign this year than TV or traditional media.
There have been many other Christmas campaigns, with Asda, Argos, Sports Direct and Etsy to name but a few. Consistent across almost all of these campaigns is the insight behind them: that customers are looking to go big on Christmas this year after last year’s let down, and that people are getting into the festive spirit much earlier.
The season has only just begun and there will be plenty more campaigns to follow over the next two months. While it can all get a bit monotonous by the end, marketers should look at Christmas advertising as inspiration for strong, creatively-driven brand campaigns.
Sustainability dominates the marketing agenda
It was only natural that, with the UN Climate Change Conference (Cop26), kicking off this week attention in the marketing world would turn to the sustainability agenda.
Several brands went live with eco messages, from Glaswegian brewer Tennent’s talking up its use of 100% renewable energy and local barley, to the WWF using stop motion to highlight the devastating effect of global warming on the Arctic.
Meanwhile, reusable bottle and container brand Chilly’s launched ‘Reusable way of living’, its biggest ad campaign to date, which imagines a world where UK consumers ditch disposable packs in favour of a more sustainable life.
Furthermore, this week Ad Net Zero, the climate crisis initiative led by the Advertising Association (AA), ISBA and the IPA, launched a 10-hour online training course offering marketers practical techniques to measure and reduce the carbon emissions related to their advertising, instigate consumer behaviour change and avoid claims of ‘greenwashing’.
Two days later, Mars, EY and Nomad Foods became the latest brands to sign up to the World Federation of Advertisers’ Planet Pledge, a global commitment to make their marketing teams a force for positive change both internally and for consumers.
The brands join the likes of Diageo, Tesco, Unilever and PepsiCo to sign up to the pledge, which is encouraging CMOs to take action across four key areas. These include championing the United Nation’s Race to Zero campaign, scaling their organisation to take a lead on climate action, harnessing their marketing to drive sustainable consumer behaviour and committing to sustainability claims that can be easily substantiated.
The commitments made and action taken by brands this week is commendable, but what matters is not what they sign up to during Cop26. The focus has to be on meaningful, long-term, sustainable change that makes the climate crisis an urgent priority within business, one which marketers have the right to take a lead on.
Airbnb sees fruits of brand-building marketing strategy
In February Airbnb said it would be making a permanent cut to its overall marketing investment, having noted that slashing spend during Covid had little impact on traffic. That cut has primarily been on the performance marketing side, with the business instead investing in building the brand and “educating” customers.
Since then, Airbnb has consistently championed the strength of its decision in its quarterly financial results, and its third quarter update was no different.
In fact, the business posted its highest ever profit this quarter, with net income up 280% year-on-year to $834m (£618m). Adjusted EBITDA broke the billion dollar barrier for the first time, as the business reached a “major milestone” of one billion guest arrivals.
The brand has credited the role of its “optimised marketing strategy” in driving this growth. Over the quarter it increased sales and marketing expenditure by 136% year-on-year to $264m (£196m) as it invested in its brand-building ‘Made by Hosts’ campaign, driving a 15% increase in overall traffic in the countries where it ran.
Airbnb is a perfect example of a business that understands how the performance/brand divide should look for its own brand. The last few years have seen Airbnb’s awareness and relevance rise so high that its brand name is now used as a verb in popular vernacular – so it doesn’t need to use performance marketing to drive traffic. Instead, it needs to remind travellers of what Airbnb offers from a brand perspective that rivals don’t and to ensure it stays front of mind.
Moving forward, the business has said it will remain focused on achieving long-term profitability through “high marketing efficiency”, alongside reduced variable costs and tightly managed fixed expenses.
Sainsbury’s and Next affirm commitment to digital marketing
Given the shift towards ecommerce brought about by the pandemic, brands across the retail spectrum are ramping up their focus on digital marketing.
This week Next reported that surging online sales had helped the business achieve a £4m profit during the third quarter, inspiring it to opt for “further investment in digital marketing”. The focus on all things digital makes sense for Next, which saw total group online sales increase 40% over the third quarter period.
By comparison, the company’s retail sales fell by 6.1% over the period and were down 28.8% for the year, compared to 2019/2020.
Next has been building its focus on digital marketing for several months. In September, the retailer confirmed it had increased its digital advertising spend by £10m in 2021 to £65m, with plans to spend “at least” £100m on online marketing this year. Looking ahead to next year, Next is on track to increase its digital marketing investment by a further £15m.
A similar picture emerged this week at Sainsbury’s, which claimed consumers are “really responding” to its digital marketing messages. This increased focus on online comes as the supermarket reported 39% of its sales came from digital during the first half, accounting for £5.8bn.
Chief executive Simon Roberts described digital marketing as a “strong platform” for the business, which it has “continued to grow” as more customers have shopped online. Sainsbury’s is also increasing the use of its loyalty scheme data to drive targeted digital marketing. The supermarket boasts 8.2 million digital Nectar users, who since September have been offered discounts on their frequently purchased Sainsbury’s products.
Both Next and Sainsbury’s are following the trajectory of their businesses, pumping money into online as the source of their growing sales. While this makes sense with a viewing to surviving in the short term, both brands must ensure that they don’t become blinkered and forget about the other channels in the marketing mix.
Ryanair cuts prices and raises targets
Ryanair is banking on discounted prices to get consumers back into the routine of travelling this winter. The airline will be seeking to drive up the number of holidaymakers boarding its planes by cutting ticket prices, the company revealed at its half-year results.
CEO Michael O’Leary this week told investors that the airline capitalised on the travel industry crisis by placing forward orders for new aircraft while rivals were short of cash.
“Ryanair was one of very few airlines to use the Covid-19 crisis to place a very significant order in December of 2020, with Boeing,” he said. Ryanair increased its existing order for 135 Gamechanger planes to 210 units.
The new models carry 4% more passengers and use 16% less fuel than outgoing models, giving Ryanair an efficiency advantage over rivals and boosting its plans to cut CO2 emissions per passenger kilometre.
The company has also introduced new features to improve the customer experience, such as an app, as suggested by a customer advisory panel.
The airline’s marketing investment lifted during the six months to September. Listed along with distribution and other costs, marketing spend rose by 58%, as Ryanair sought to remain front of mind with customers who may not have been on a plane for the best part of 18 months.
Customers have been returning to book with the brand in large numbers, and engaging in increased ancillary purchases, as travel restrictions have eased, said O’Leary. Ryanair has now lifted its growth targets, saying it aims to carry 225 million passengers a year by 2026.
Whether Ryanair can convince holidaymakers of its ‘green agenda’ and improved customer experience remains to be seen, but by slashing prices it is giving them a stronger incentive to book.