Cutting Edge: Our weekly analysis of marketing news · Direct marketing Three types of data… Marketers rely on data but should they focus on first-, second-, or third-party data?

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Cutting Edge: Our weekly analysis of marketing news

1 July 2015

Welcome to our weekly analysis of the most useful marketing news for CIM and CAM members.

Quick links to sections

Marketing trends and issues

Advertising Global creativity

In this global issue of Campaign, published to coincide with the Cannes Lions festival, creative

directors from 12 geographies consider what creativity means in their different countries, whether

creativity plays a part in their agencies’ work and

asks them to name some of the best work. Miguel Reis, creative director of TBWA\Angola, says that

Angolans are creative people by nature. Go Sohara, executive creative director of J Walter Thompson

Japan, reflects on the fact that creative work used to focus mainly on ideas that would be understood by

the Japanese but now brands are expanding

overseas and are using ideas that reflect brand values.

Campaign Global Issue 2015, 26 June 2015, pp14-18

Sex vs humour Sex, humour and other emotional factors in

advertising can help to sell products. But there has been little investigation into whether sexual ads

contain something that makes them more

persuasive than other types of appeal. This research tested the persuasiveness of sex and humour in

advertising and their effect on pleasure and arousal levels. The main measures used were: attitudes

towards the ad, attitudes towards the brand and

purchase intentions. The results suggested that “highly pleasant” ads enhanced persuasion

regardless of arousal and content. However, sexual appeals outperformed non-sexual appeals only when

there was moderate pleasure and high arousal.

International Journal of Advertising, Vol 34(3) 2015, pp406-420 (Das et al)

Agencies

WPP creates content with Truffle Pig

WPP has joined up with the Daily Mail and Snapchat to create a content marketing agency called Truffle

Pig. The aim of the new business is to create and distribute content for brands on digital platforms and

reflects the growing demand for native advertising. Daily-Mail.com, Elite Daily and Snapchat are to be

used as “test beds for original concepts in story-

driven marketing”. The initiative is part of WPP’s strategy to create links with media brands. The

agency group has been acquiring various media assets over the past decade.

Financial Times, 24 June 2015, p20

Brands and branding Brand good scents?

Smell produces an instinctive reaction which bypasses the logical part of the brain making it a

powerful tool for marketers. Studies suggest that 75% of emotions are generated by smell but people

do not necessarily acknowledge that scent has

influenced their choice. The Landmark London hotel uses the scent of White Tea and Thyme throughout

the hotel to make people feel at home and to create pleasant memories. In some cases, such as spas

and body care, scents and brands are an easy fit.

But brands often overlook the power of scent when brand building. ScentAir is a company which creates

fragrances specially for brands and gives them advice on which smell to use in order to achieve the

results they want. The right scent can help to create

a personal connection with the consumer.

Market Leader, Q3 2015, pp12-13 (Davis)

Brand partnerships

Brands, such as Red Bull, have been introducing their stories into popular culture, a trend that is

being reinforced through branded content. Musicians

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and artists are benefiting from such partnerships, allowing them to create bigger experiences. DJ and

producer, David Guetta, has worked with brands such as Coca-Cola and Tag Heuer to produce brand-

sponsored entertainment. Here he talks about how

he ensures that such partnerships are successful and how brands are playing a part in popular

culture.

The Drum, June 2015, pp20-21

The 21st century brand

The IPA has collated the best of its Excellence Diploma entries to create a book entitled What Is A 21st Century Brand? It pays homage to Stephen

King’s 1970 essay, What Is A Brand? For King, the main issue was the rise of “retailer power” while the

21st century authors focus on the rise of “consumer power” driven by digital and the internet. King

describes a brand as a personality and a set of

intangible added values that consumers relate to. The 21st century brand proves to be far more

complex with the underlying message that the brand is not just a personality but “a community of like-

mindedness”. This article considers 21st century

views in the context of King’s work and how the IPA Diploma has helped to create a new mind-set.

Campaign Global Issue 2015, 26 June 2015, pp30-32

Conferences and events The event scene in Africa According to the latest data from the International

Conference and Convention Association (ICCA), just

3% of international gatherings (375) were hosted in Africa of which 35% (118) took place in South Africa

during 2013. The figures are considered to be out of line with Africa’s potential and its population. Some

international companies are making the move into

Africa, usually by starting in South Africa. Many international conference and exhibition firms are

teaming up with or acquiring local players. A serious barrier to progress is the lack of suitable venues,

although some developments are under way.

Strategic Marketing Africa, Q2 2015, pp10-13

Meeting trends

The number of corporate meetings around the world

is almost at a record high but is levelling off according to data from the International Association

of Professional Congress Organisers (IAPCO). A survey of its 120 member organisations has revealed

that 3,308 corporate meetings were handled by

IAPCO members last year, 0.6% fewer than 2013. In contrast association business enjoyed a 10%

increase with 3,111 meetings held by members in 2014. Government is also proving to be a strong

sector with the number of meetings reaching 656 in 2014, although fewer than their 2011 peak of 707.

meetpie.com, 24 June 2015

Consumer behaviour Consumer buying

The Google Consumer Barometer reveals that British consumers are ahead in terms of mobile technology

adoption but that bricks-and-mortar stores still play

a major part in their shopping activities. Some 46% of people purchase online compared with 44% who

still do their shopping in-store. PCs account for 81% of purchases while 53% of shoppers collect their

purchases in-store. Respondents also indicated that

previous experience (40%) was more important in hearing about a product than pre-purchase research

(24%), word-of-mouth (9%) and advertising (8%).

Retail Week, 26 June 2015, p39

Customer relations Loyalty apps

Plastic loyalty cards may eventually be superseded

by loyalty apps. Harvey Nichols has announced a new loyalty scheme based solely on a mobile app

following research which revealed that 80% of customers preferred an app to a plastic card. Both

Boots and Coffee Club have released apps for their

loyalty programmes. It is likely that mobile will play an increasingly important part in loyalty schemes,

with opportunities for instant rewards, offers and location-based messaging. But brands should also

consider the role of mobile in their brand strategy

before launching a loyalty app. Costa’s app is explored in some detail.

Marketing Week, 25 June 2015, pp23-25

Politeness doesn’t always pay New research suggests that being too polite could

be a bad thing for British business, costing them millions of pounds a year. A poll of managers by

Censuswide has revealed that 78% believe that

politeness could be costing their business money. Some 64% thought that they personally were too

polite when managing situations at work, such as lateness or fraudulent expense claims, while a

quarter of those surveyed said that they had not tackled a client over late payment. However, many

believed that being less polite to a client could cost

their company more in the long term.

The Daily Telegraph, 25 June 2015, p11

Direct marketing Three types of data…

Marketers rely on data but should they focus on

first-, second-, or third-party data? A survey of over 300 senior marketers which used at least two data

categories was carried out by Econsultancy and Signal to find out more about their collection and

use practices. Here, some colourful infographics set

out in Goldilocks and the Three Bears fairy-tale style reveal some of the data trends which the

respondents said worked for them.

dmnews.com, 26 June 2015



Door-drop opt-out scheme never activated Following objections from Royal Mail and other

organisations, the door drop preference service has been quietly dropped by the UK Government. The

scheme, which was due to start in 2012, aimed to

reduce the estimated 12 billion items of junk mail shoved thorough letterboxes every year. Last year

the Royal Mail increased its junk mail revenues to £500m as it delivered three billion unwanted items.

The Direct Marketing Association had argued that if its members signed up to the scheme, then

advertisers would simply go elsewhere. Currently

there are two opt-out schemes ‒ run by Royal Mail and the DMA ‒ but only 1 in 50 households have

signed up to them.

The Times, 30 June 2015, p13

Law Facial recognition These days facial recognition technology enables

companies to identify a person in a public place without their permission. Last week talks between

privacy advocates, the US Government and consumer groups took place to hammer out a code

of conduct for the use of this technology but they

failed to reach a consensus. Facial recognition has reached new levels: California company Face First is

launching a system for retailers which can “boost sales by recognising high-value customers” and send

alerts when “litigious individuals” are on the scene.

Churchix makes facial recognition systems for churches, allowing them to track attendance! Facial

recognition is just one of a range of biometric technologies for which there will be social and

ethical implications as well as the legal

considerations associated with privacy…

New Scientist, 27 June 2015, p20

Getty joins action against Google

Getty Images, one of the largest photographic agencies in the world, has accused Google of

“massive theft” because of the way it displays images in search results. The EC says that the

internet group has abused its dominance in Europe

by cheating customers. Getty has been given interested party status in this action. It claims that

Google has used the agency’s images to enhance and promote its own service.


Court to force ISPs to block e-book sites

The High Court of England and Wales is using copyright law to force the five main ISPs in the UK

(BT, Virgin Media, Sky, TalkTalk and EE) to block seven foreign websites which host pirated e-

books. The off-shore hosted book sites have been offering various pirated e-books, ranging from Harry

Potter to university textbooks. The Publishers

Association, which brought the action, claims that over 80% of material on these websites infringes

copyright. This is the first action of its kind brought by British publishers. Similar powers are to be

introduced into Australian law.

lexology.com, 25 June 2015

Marketing Managing salespeople for new products Salespeople play an important part in promoting

new products. But new products can be unfamiliar to salespeople and managers may need to use

control mechanisms to improve sales performance, such as measuring the new product sales results of

each salesperson. Managers may also be able to

help salespeople’s performance by having a strong market orientation. This study of Taiwanese

salespeople from electronics companies reveals that sales management controls can directly influence

salespeople’s innovativeness which in turn enhances

their new product sales performance. However, it also finds that sales management controls do not

affect performance directly. Market orientation can positively influence the relationship between

salespeople’s innovativeness and new product sales performance.

Industrial Marketing Management, Vol 47 2015, pp147-155 (Chen et al)

Marketing the worst at training provision

Marketing is lagging behind other sectors with

regard to training and is out of touch with its employees. This is according to a survey of 2,300

professionals across all industries by job site CV-Library. Some 92.2% of marketers said they do not

receive basic training compared with the national

average of 43.4%. Yet 94.6% of marketers said that basic training was “essential” for keeping abreast of

technology and trends.

Marketing Week, 25 June 2015, p5

AI for forward-looking brands

The term “artificial intelligence” (AI) was coined in 1958 by mathematician and physicist John von

Neumann and has found its way into popular

culture. AI is already being used by brands such as BMW who employed it in an ad campaign for its first

electric car. The iGenius technology was able to answer people’s questions via text, so reducing the

need for human intervention. Vizeum, BMW’s media

agency, has since used AI for other clients such as Panasonic, to improve sales and in-store

experiences. This article includes an interview with Bina48, a robot based on a real person’s

consciousness, which combines human data with future consciousness software.

Marketing, July 2015, pp16-17

Market research When research fails…

An independent inquiry into the failure of the UK’s election polls will report its findings to the British



Polling Council and the Market Research Society in March next year. The author asks whether the

pollsters might actually have done us a favour by reminding us of the difficulties of interpreting

complex systems. Marketing research findings often

go unchallenged yet the time to find out whether the research could be flawed should be at the start

of the process. Quant surveys can be subject to ‘digital deceit’ while the limitations of focus groups

in qual research are well-documented. One answer is to undertake research less often but to do it

better. Meanwhile marketers should challenge the

assumptions of researchers. Another idea is to use ‘triangulation’, where different methodologies are

brought together to identify underlying currents. Tesco and New Coke are examples of brands that

have simply got it wrong despite their extensive

research.

Marketing, July 2015, pp34-35

Research agencies ‒ the cobbler’s children?

The author argues that research agencies are a bit

like “the cobbler’s children” – they are too busy focusing on their client’s work to pay attention to

themselves. There are three types of research that agencies might consider undertaking: at the basic

level they should be monitoring key metrics using

client and employee satisfaction surveys; on another level they should conduct research which looks

beyond the tactical to the agency’s strategic direction; finally there is research which enables the

agency to become a subject specialist: examples

include Pineapple Lounge with its Little Miss Understood report or BrandZ and Millward Brown’s

BrandZ Top 100. By conducting its own research, the agency can test out new ideas and

methodologies or provide a training ground for new members of staff.

research-live.com, 24 June 2015

Public relations Memorable stories

Although 79% of people are interested in brands’ stories, 85% can’t name a memorable one. This is

according to research by Headstream which says

that 55% of consumers are more likely to buy from you if they like your brand’s story. Three tips are: to

tell stories about ordinary people, to be humorous and to use owned media such as the brand’s

website or newsletter. An infographic provides more findings from the research.

prdaily.com, 30 June 2015

Bad PR for Nottingham recruitment? Nottingham University’s refusal to publish a job ad

because it used the word “junior” has been called “idiotic” by employment lawyers. The ad was

created by Rhizome PR who wanted to recruit a

junior PR consultant. Nottingham’s career service

said it wouldn’t post the ad unless it used the word “graduate” or “trainee”. It argued that the word

“junior” could be perceived as “discriminatory”!

People Management, July 2015, p17

Sponsorship Wimbledon Many brands have had a long-term association with

Wimbledon but others are relatively new to tennis. Marketing Week has conducted analysis of YouGov

data to show that some brands are more effective on the tennis court than others. During last year’s

Wimbledon soft drinks brand Robinsons saw an

upward trend in brand perception but Stella Artois remained flat in this respect while HSBC saw its

score fall slightly. This year is Robinsons’ 80th year of Wimbledon sponsorship. The analysis shows that the

brand choices of Wimbledon fans do not necessarily

correspond with the profile of the sponsors. Some brands may be using the tournament to change

perceptions and target a new audience but this could take some time.


Plus 500 ups Atlético Madrid sponsorship Trading platform Plus 500 has increased its

sponsorship agreement with Spanish football team

Atlético Madrid. It will become the team’s main shirt sponsor for the next two years as well as having

branding rights at the team’s stadium. The sponsorship is thought to be worth millions – the

back of the shirt deal alone is estimated to have cost

£1m. Plus 500 is recovering from an FCA investigation in which it was ordered to freeze

thousands of customer accounts due to poor money-laundering checks. There are other examples of

football clubs, such as West Ham, which have been sponsored by ill-fated companies.

The Daily Telegraph, 26 June 2015, pB5

Agriculture, fishing and forestry British birds – no paltry achievement

The British Poultry Council (BPC) says that poultry

made up nearly half of all meat bought in Britain last year. Chicken has become more popular than lamb,

pork and beef put together. As well as domestic birds, Britain imports £1 billion-worth of poultry.

Chicken benefits from being healthier and more sustainable than red meat and is acceptable to all

religions. Because the UK poultry industry has not

been part of any EU common agricultural policy, it has had to become more “market oriented and

innovative”, according to Andrew Large, chief executive of the BPC. The British poultry industry

contributes £3.6 billion to GDP.




Olive oil hit by poor harvests The price of high quality Italian olive oil has been

rising following last year’s bacteria outbreak in which around one million trees were infected. Currently

Italian oil prices stand at around 65% higher than

those for Spanish oil. But output in Spain has also been affected by the very hot, dry weather. The

2014 to 2015 global production of the crop is expected to fall by 27% according to the

International Olive Council. There have been warnings that rising prices could lead to an increase

in olive oil fraud.


Building industry Student accommodation UK students are increasingly demanding better

accommodation which should be good news for the construction industry. Student accommodation no

longer means tiny rooms and dodgy landlords. Instead it has become a class of accommodation

that attracts global investors. The removal of the

cap on overall student numbers for this academic year could lift student intake by up to 60,000 a year,

according to government estimates. This article looks at the implications for the building industry as

well as the UK’s top, bottom and undersupplied

regions of development.

Construction News, 26 June 2015, pp18-20

European markets

The EU is fraught with uncertainty concerning the possibility of a ‘Grexit’ and the ensuing economic

instability. But what are the main implications for the construction industry both on mainland Europe

and in the UK? In terms of construction output, the

UK is forecast to grow by €25.05 billion from 2014 to 2017, well ahead of Italy, which is expected to

grow by just €9.1 billion. The smallest increase out of the five largest markets will be experienced by

Germany (€5.35 billion). But Poland has put in the

best performance: having declined by 5.8% in 2013 it is forecast to increase its output by 8.2% in 2017.

Construction News, 26 June 2015, pp30-31

Businesses and strategy Sales confidence and pricing Pricing has a strong impact on the bottom line but

many companies tend to neglect their pricing function and it is not well-covered in the literature.

The author aimed to address a gap in knowledge via

a survey of 507 professionals working in sales and account management at B2B firms around the

world. The objective was to measure the influence of five organisational factors on sales confidence

associated with pricing and firm performance. Four of the factors – pricing capabilities; delegation of

pricing authority; incentive and goal systems; and

knowledge before negotiation – were found to

“positively and significantly” influence sales confidence associated with pricing. The conclusion is

that companies which can design organisations, and allocate their resources to maximise pricing

confidence, can expect a better financial

performance.

Industrial Marketing Management, Vol 47 2015, pp26-38 (Liozu)

A question of productivity The UK continues to struggle with “productivity” but

how exactly is it defined? A report entitled Productivity: getting the best out of people from the

CIPD, reveals that 66% of businesses use the term “productivity” widely in their organisation but that

their understanding of it is patchy. It is often the

case that organisations don’t define productivity in the same way as economists but instead regard it as

“performance in general” according to chief economist at CIPD, Mark Beatson. The report

suggests that businesses which spend more on

learning and development perform better than those which don’t. He is hoping that the Government will

conduct a review of spending on skills, having already committed to putting money into

apprenticeships.


The value of CSR

It is estimated that the biggest American and UK

companies spend over $15 billion a year on CSR. There are three ways in which this could add value:

it could signal to consumers that a company’s products are of better quality; customers may buy

the products as a way of indirectly donating to the

cause; and it could set up a halo effect where its good deeds create positive feelings among

consumers. It is hard to ascertain which of these effects is strongest. But now new research from the

US has revealed that among firms that have been prosecuted for their misdeeds, those with the most

comprehensive CSR programmes were more likely to

receive lesser penalties. Spending on employee and community relations has been found to have a

greater effect in this respect than other areas of CSR.

The Economist, 27 June 2015, p68

Three top management errors It is difficult for top managers in charge of strategy

to make good long-term decisions and the outcome

of their decisions could affect their company’s performance for years to come. Traditionally

companies are advised to benchmark their efforts against the best in class, to learn from others and to

be agile enough to change course quickly. The

author argues that managers continue to make bad decisions and seem unable to correct their courses

of action. He identifies three common traps that top



managers fall into which can lead them to misjudge their strategies.

London Business School Review, Vol 26(2) 2015, pp34-35 (Vermeulen)

Charities and NGOs Don’t ignore review sites

In this article Rob Walker, head of resourcing at UK charity Mencap, argues that however much time is

spent trying to protect the employer brand, it is almost impossible to escape negative press.

Traditionally Mencap has chosen to ignore viral

comment. Here he explains how the organisation has changed its approach to sites such as Glassdoor,

which encourages employees to respond to reviews that their staff and others have left. He concludes

that the employer and recruitment brand of any

organisation can be badly damaged by even a handful of unanswered reviews. It is important to

put the record straight but without sounding defensive. Actively engaging with external platforms

can demonstrate commitment and strengthen the

employee brand.


Breast cancer charities rebrand

The new charity formed by the merger of Breast Cancer Campaign and Breakthrough Breast Cancer is

to be called Breast Cancer Now. The name, which conveys the urgency of the cause, also reflects the

charity’s aim of stopping women dying of breast

cancer by 2050. The charity will also have a new logo.

Third Sector, July 2015, p12

Durable consumer goods Make your own virtual reality GoPro is the first major camera company to enable

consumers to produce their own virtual reality footage. It has created a special mount called the

Spherical Array Rig, which holds six GoPro cameras

capable of producing footage for use with Oculus Rift. The product is due to be released in the second

half of this year.

Marketing, July 2015, p22

TV ownership is in decline

The proportion of households in the UK with a TV set has fallen from 96% two years ago to 93.7%,

which is the lowest percentage since 1972. Yet the

BBC reports that there has been an 80,000 increase in the number of homes with a TV licence. This is

because more people are watching TV on mobile devices, which still requires them to buy a licence.


Economy British retail sales Retail sales in Britain reached a five-month high in

May but have been lower in June according to a CBI survey. Its index shows a retail sales balance of +51

for May vs +29 in June. The flatter sales in June

have been attributed to the poor performance of the grocery sector. But economist, Vicky Redwood,

believes that consumer confidence is high, that real wages are rising strongly and that “households have

yet to spend all of their windfall from lower

commodity prices”. Barry Williams, chairman of the CBI survey, adds that inflation is expected to stay

below 1% for this year which will give consumers more discretionary spend.


German consumers remain frugal This has been the best year for real wage growth in

Germany since 1999. Research suggests that

German consumer confidence is climbing and so is spending. Cosmetics and personal care, which are

the fastest-growing sector, saw sales rise by 6.6% in the first third of 2015 and this is having a positive

effect on smaller companies in the sector. Yet German shoppers continue to be cautious spenders

and they love bargains: they prefer to fly Ryanair

rather than use their national carrier Lufthansa and they shop in Aldi and Lidl rather than upmarket

outlets.

The Economist, 27 June 2015, pp67-68

Consumer spending may lead to interest rise

In May US consumer spending rose at its fastest

rate for six years (0.9%). This might encourage the Federal Reserve to increase interest rates for the

first time since the financial crisis.

The Daily Telegraph, 26 June 2015, ppB1,4

US TPA bill passed to aid world trade

The US Senate has passed legislation that will open the way for a new trade treaty, the Trans-Pacific

Partnership (TPP). The Trade Promotion Authority

bill will enable fast-track approval of large international trade agreements. President Obama

believes that TPP will make it easier for “Made in America” goods and services to be sold to fast-

growing markets overseas.




Consumer confidence highest this millennium In June UK consumer confidence rose to its highest

level since January 2000 according to GfK’s confidence barometer. All five measures used in its

survey were higher in June than in May, thanks to

low inflation and stronger pay growth. Consumers are more willing to spend money on larger items

such as furniture or electrical goods.


Energy and utilities SMEs need to tackle energy management SMEs can achieve huge cost savings through energy

management and efficiency. Liam McLaughlin is the principal author of the ISO/ITC/UNIDO handbook

entitled: ISO 50001 – A practical guide for SMEs, which explains that SMEs need tailored advice to help them reduce costs, to be less affected by

fluctuations in energy prices and to make their businesses more sustainable. In this short interview

McLaughlin talks about the energy challenges facing

SMEs today and why they need targeted advice. He also provides some management ideas and technical

tips.

International Trade Forum, Issue 1 2015, p38

New energy

Companies such as start-up Tokamak Energy, are developing new forms of carbon-free energy. Its

prototype fusion reactor is being showcased in

London this week. Other innovative low-carbon solutions are in the offing, such as artificial leaves to

collect carbon emissions. Meanwhile Bill Gates plans to double his investment in green technology to over

$2 billion during the next five years. His preferred technology for the future is the travelling wave

reactor but his funding will also help to enhance the

prospects of other low-carbon ideas. Four energy technologies are profiled.

Financial Times, 27-28 June 2015, p11

Environment Climate change could affect health In June the Climate Health Commission published a

report on the health benefits of tackling climate change and the consequences of not doing so. By

doubling the proportion of renewable energy from

its 2010 level of 18% to 36%, it says we could achieve global healthcare savings of $230 billion by

2030. This is because much ill-health is the result of burning coal, oil and gas. The Commission wants

governments to put $1 trillion into developing

renewable technologies as well as making preparations to offset the impact of global warming.

This might seem a lot of money but it is less than the $5.3 trillion in subsidies which the IMF estimates

the fossil fuel industry will receive this year!

New Scientist, 27 June 2015, p12

Lancashire votes to reject fracking Lancashire County Council has rejected a planning

application by shale gas company Cuadrilla to frack in the county. If its bid had succeeded this would

have been the biggest fracking site in the UK so far.

Furqan Naeem, a Friends of the Earth campaigner, claims that "Many polls show that the public wants

renewable energy, not fracking ‒ and the clean energy and long term jobs it provides." This is

another blow for Cuadrilla – the only company which has undertaken fracking in the UK to date – and

follows last week’s rejection by Lancashire

councillors of a bid by the company to frack at another site.

businessgreen.com, 29 June 2015

Fashion Learning after a fashion In this article Mary Portas, well-known for her

expertise in fashion and retailing, takes a look at the fashion sector and what non-fashion brands might

learn from it. Mercedes-Benz and Coca-Cola are just

two brands that have drawn from the experience of the fashion industry. Portas identifies eight key

principles that brands in other sectors can apply to their own. For example, fashion understands how to

go viral because it knows who its influencers are and

what will appeal to them. Fashion also has an entrepreneurial edge because it is always dealing

with the future – what is new and what will be popular. They cannot afford to get it wrong!

Market Leader, Q3 2015, pp37-39 (Portas)

Financial services Emotions and irrationality in indebtedness This study looks into consumers’ emotional and

irrational reactions towards indebtedness with a

particular focus on the payday loan industry. The recent financial crisis in the UK is expected to have

changed consumer spending, saving and borrowing habits. The research is conducted via interviews in

which people’s experiences in these areas are discussed. A key focus is the influence of emotions

on decision-making and how this affects irrationality.

Journal of Financial Services Marketing, Vol 20(2) 2015, pp107-121 (Brown and Woodruffe-Burton)

FCA wants more creative comms

The UK’s Financial Conduct Authority (FCA) has warned that financial institutions use too much small

print, jargon and complicated technical language which makes it hard for customers to understand. It

would like them to write more creatively and

informatively. This could result in banks receiving fewer complaints and having more satisfied

customers. The FCA also advocates the use of videos and infographics to explain products more

clearly. Australian regulators have started to

produce comic strips for younger consumers to



encourage them to keep track of bills and to provide information on other aspects of finance.


The black horse returns to TV Lloyds Banking Group has brought its iconic black

horse back to TV advertising for the first time since the financial crisis. The nostalgic ad was made by

the same team which created John Lewis’s Monty the Penguin Christmas ad. The new ad campaign coincides with the bank’s 250th anniversary. The

black horse logo was first introduced in 1884 but a real horse wasn’t used in TV ads until the 1980s.

The Sunday Telegraph, 28 June 2015, pB1

FMCG

Beverages Champagne – a Greek revival Despite Greece’s economic woes, the country’s

champagne sales are growing strongly: they rose by 18% last year compared with global growth of just

0.5% according to Euromonitor. Yet overall volume

sales in Greece were just 300,000 litres compared with 107.2m litres in champagne’s home country of

France and 20.4m litres in the UK. In reality tourists probably account for most of Greece’s champagne

consumption. Overall, however, the champagne industry is having a tough time as people turn to

cheaper alternatives.


Carlsberg introduces non-alcoholic lager The first Carlsberg-branded non-alcoholic lager is to

be launched by Carlsberg UK. Carlsberg 0.0% hopes to capitalise on the 30% growth which has been

enjoyed by the alcohol-free sector over the past two years. Earlier this year the company introduced an

alcohol-free version of San Miguel.

The Grocer, 27 June 2015, p32

Food Middle East trend for healthier food Research suggests that consumers want to take

charge of their health and lose weight. Over 40% of

Emirati, Saudi and Egyptian respondents to a Nielsen survey (Aug-Sept 2014) said they planned to

buy more healthy food over the next six months. Over 50% of respondents in these countries

believed that food with natural ingredients was very

important. Natural ingredients came out on top of the 27 attributes covered by the survey but

consumers also said that they were looking for foods that could help reduce their risk of disease or

promote good health. The willingness to pay extra for natural products varied across countries and

purchasing decisions can be complicated.

Manufacturers and retailers are advised to take advantage of the trend for health and wellness by

identifying consumers’ nutritional needs and concerns.

Gulf Marketing Review, June 2015, pp42-44

Thorntons to be swallowed by Ferrero Last week it was announced that Ferholding, a

subsidiary of Italian giant Ferrero, is to acquire Thorntons for £112m. It is hoped that this will bring

Thorntons back to financial health after it issued a

profit warning last December. Thorntons has had a strategy of selling its chocolate at low prices in

supermarkets which have competed with its own specialist retail stores. Chris Brook-Carter, Retail Week editor-in-chief, believes that the Thorntons

brand has “lost its way”. Ferrero has a reputation for building global brands including Nutella and Kinder.

The Grocer explores Ferrero’s intentions in more detail.

Retail Week, 26 June 2015, p2; The Guardian, 23 June 2015, p3; The Grocer, 27 June 2015, pp12-13

A Huel new type of food

Entrepreneur Julian Hearn has produced a “nutrition-complete” powder which is meant to be a

complete food replacement. He claims that Huel,

which contains ingredients such as oat flour and pea protein, can provide 100% of UK and EU

recommended nutrients in the form of a 500g daily portion. The product will target “non-gym goers”

who are looking to get fitter.


Moss is on the menu Raw foraged moss and lichen is being used by

British chefs as a deep-fried bar snack or to infuse meat or fish because it is ideal for holding in the

moisture. The trend may have started in Scandinavian restaurants where ingredients are

often foraged from local woodland.


Health and pharmaceuticals Medical testing On 3 July a new US law was passed enabling

anyone to order a laboratory test without seeing a doctor. Such tests include pre-diabetes, vitamin

levels and fertility. Theranos, a young Silicon Valley blood-analytics company, is already supplying quick,

easy tests through clinics which are held in

Walgreens pharmacies. The implication is that Theranos and its like will disrupt the $60 billion-a-

year US medical testing industry. Currently two companies – LabCorp and Quest Diagnostics – have

a near-duopoly of the US market. Theranos is likely

to experience strong competition from both new and incumbent players.

The Economist, 27 June 2015, pp63-64



India – medical innovation South Delhi is becoming an Indian Silicon Valley by

playing host to a range of medical start-ups. In 2013 the country received $350m in private equity

healthcare investments including money from the

Bill and Melinda Gates Foundation. Here are five examples of medical innovation from India.

Wired, July 2015, p41

IT and telecoms Mobile advertising in the Middle East Mobile penetration in the Middle East and North

Africa (MENA) region is among the highest in the world yet the percentage of ad spend on mobile is

among the lowest. It is estimated that just 4.6% of

digital budgets in the Middle East are devoted to mobile compared with 42.8% in the US and 21.2%

in Europe. Advertisers in the Middle East tend to regard mobile as something to try out rather than a

medium to which a large amount of budget should be devoted. Yet there are some positive trends

including an increase in transactional experiences

among consumers; brands are moving towards experiential mobile advertising and there is

integration between mobile and offline marketing. Two areas to be addressed are: the lack of specialist

mobile agencies in the region and a shortage of local

content for consumers which means that they are turning to apps and sites outside the region.

Gulf Marketing Review, June 2015, pp114-115

Samsung develops folding screen Samsung is believed to be developing a fully

foldable, dual-screen handset. Despite attempts to develop a foldable smartphone, so far

manufacturers have only come up with curved

screens such as LG’s G Flex. Samsung’s phone, which is in the very early stages of development, will

reportedly bend in the middle.

Marketing, July 2015, p22

A tool to prevent embarrassing e-mails

Have you ever clicked on ‘reply all’ by mistake when sending an e-mail? Now Google has introduced a

feature enabling you to recall e-mails sent to the

wrong people. The ‘undo send’ option will be offered to all 900m Gmail users who can recall their e-mails

up to 30 seconds after sending them.

The Independent, 25 June 2015, p19

Leisure and tourism A budding tourist attraction

Tourism is flourishing in China and so is the country’s Buddhism business. In the 1980s the

Government began to free up restrictions on the

building and restoring of temples. Many new shrines have sprung up such as the giant Guanyin Statue in

Sanya which charges substantial entrance fees.

Buddhism is even going global: one of its most famous sites ‒ the Shaolin Temple in Henan – is to

build a $297m, 500-bed hotel and temple complex as well as a martial arts centre and golf course in

Australia! Many Buddhists are unhappy about the

commercialisation of their faith.


KidZania

KidZania, a new theme park, opened in Shepherd’s Bush, London last week. It aims to be an

“Educational Entertainment Experience” – instead of rides and rollercoasters it allows children to play at

being adults by working in different areas. There are

45 to choose from including a hospital, bank and supermarket, spread across a mini, two-storey city.

KidZania has teamed up with real-world businesses, such as BA and H&M, to provide the attractions. The

partners pay to be part of the experience and they supply all the kit. Although strictly speaking this

doesn’t constitute advertising, it does get the brands

in front of young consumers.


Barcelona – overrun by tourists

Citizens of Barcelona feel overwhelmed by the number of tourists visiting the city. This year around

9m visitors are expected in a city with a population

of just 1.6m. The city’s new mayor, Ada Colau, believes that the city will have to place some kind of

restriction on numbers, “if we don’t want to end up like Venice”. She is proposing a limit on new hotels

and apartments that are rented to tourists. Tourists spend €25m a day in the city and the tourist

industry represents 15% of Barcelona’s GDP.

The Guardian, 29 June 2015, p17

Materials and mining Copper falls as new project gets under way In Peru, a Chinese company, Minmetals, is about to

embark on one of the biggest-ever copper projects. The huge investment made by China in the Las

Bambas mine suggests that China expects to be a large consumer of the metal for some time to come.

There are concerns within the mining industry that

copper supply will decline because of mine closures and other problems. Wood Mackenzie, an industry

consultancy, estimates that between 400,000 and 900,000 tonnes of copper production will be lost

each year from 2017 to 2021. This prediction hasn’t

been enough to prevent the price of copper from falling as supplies continue to exceed demand…




Media

Books Grey outsells Brown

Despite bad reviews, Grey, the new Fifty Shades of Grey story by EL James, has achieved record sales. In the UK the book’s publisher Vintage says the

book had broken the record for first week sales of an adult title, with 647,401 copies being sold. It

even beats Dan Brown’s The Lost Symbol which sold 551,000 in its first week.

The Independent, 24 June 2015, p19; The Daily Telegraph, 24 June 2015, p3

Millennials prefer print

Young Britons are reading print instead of e-books

and almost two-thirds of 16 to 24 year-olds have never bought an e-book according to Deloitte’s

Media Consumer report. Strategy director, Matthew Guest, claims that millennials like print because they

have a “psychological need” to own physical objects

and to be represented by those objects. Around 95% of sales of YouTube vlogger Zoella’s book, Girl Online, were in hardback print format.


Film Product placement

This summer’s blockbuster films are likely to be full

of product placements. Entourage, which is just 104 minutes long, will feature a whopping 65 brands.

This article asks whether product placement has gone too far, whether it is worth the brand’s

investment and how brands should maximise their

impact. Analysis of brand placement in Jurassic Park and Avengers: Age of Ultron has found that it can

be effective in creating awareness and engagement and that digital consumption increased for brands

that were seen in these films. The automotive

industry has also benefited greatly from product placement over the past year. Damon Bryant,

creative director at Lotus F1 Team, prefers “patronage not placement”. This is where the brands

become an integral part of the film, such as clothes or watches ‒ “don’t just slap them in for the sake of

it”, he says.


Immersive cinema Secret Cinema is just one of various alternative film

screenings in the UK which target people who are tired of the large multiplexes. Fabien Riggall,

founder of Secret Cinema, is staging a big event this year which will include 400 actors, DJs, bands and

four stages. Immersive experiences such as this

allow people to become a part of their favourite film. Luna Cinema and Floating Cinema are other

examples of alternative cinema formats. But some critics believe that this trend reflects the short

attention spans of audiences and that a film should be enjoyed on its own merits.

Financial Times, 27-28 June 2015, p2

Music Apple – a swift response

After Taylor Swift publicly attacked Apple for not paying artists during Apple Music’s three-month free

trial period, the company agreed to pay artists on a per-play basis. It has also made some deals with

independent record labels. Merlin, the independent digital rights organisation which represents 20,000

labels, says it is “happy to support the deal”.


Festivals ‒ a supply-side problem Big music festivals are in high demand but the music

industry has changed over the past ten years and sales of recorded music have fallen sharply: income

fell from £1.2 billion in 2004 to just under £700m last year. The live music industry is becoming more

important in terms of revenues with much of this

manifesting itself in summer festivals such as the recent Glastonbury Festival. The number of festivals

has risen from 80 in 2004 to 250 and audience attendance has also grown. Both artists and

promoters are benefiting from the trend but there

are not enough big headline acts and music to go round and the business is becoming increasingly

competitive.


Can Google pip Apple to the post?

Last week Google entered the free music streaming arena with the launch of Google Play Music, which

will be competing with Spotify and Apple Music. A

paid version of the service is already available but this new service will rely on advertising revenues.

This article identifies five ways in which Google Play Music could disrupt advertising and marketing. It

points out that Google has introduced the new

service before the launch of Apple Music.

adweek.com, 23 June 2015

Social media Instagram to target ads at teens

Instagram is using its parent company Facebook’s data and algorithms to help it sell advertising.

Instagram’s app, which has 300m monthly users, is

beginning to use targeted data from Facebook to offer advertising to the 2m advertisers who buy ads

from Facebook. Instagram has proved extremely popular with teenagers, the very people whom

advertisers find it hard to reach. Analysts predict

that Instagram could make between $1.2 billion and $2 billion in revenue next year.




Television Measuring audiences

With the rise of YouTube and tablets, broadcasters no longer know how many people are watching their

TV programmes. They want to improve their

audience tracking in order to protect their valuable advertising revenues. Traditional measures suggest

that audience numbers are falling in the US and UK, but these don’t take into account the increase in

viewing on desktop and mobile. European TV groups

are calling for a ‘single currency’ to measure how many people watch an ad regardless of whether it

appears on TV or online. Traditional systems rely on panels of viewers but they have their limitations.

Other systems are just as flawed so panel-based systems may continue. But other obstacles are on

the horizon, such as targeted advertising which will

make the process even harder.


Packaging Unilever shares technology with rivals

Unilever has developed a compressed deodorant can which it plans to share with its competitors. The

system enables a 75ml aerosol can to last as long as a 150ml version. The can uses half the gas and

could have environmental benefits. Unilever has

produced a how-to guide to enable other companies to develop their own compressed cans. Rivals will be

able to use the word “Compressed” on the can and to adopt the green band design which Unilever uses

to differentiate itself. Branding expert Paul Williams

suggests that this could level the playing field ‒ currently Unilever is having to spend a lot on

advertising to explain why its can is smaller than others.


Get on your McBike McDonald’s has come up with new packaging

designed to hang on bicycle handlebars. The

McBike, which is big enough for fries, a burger and a drink, folds up into a case. It has already been

launched in Denmark and Colombia and is soon to be introduced in Amsterdam and Japan where

cycling is popular. packagingnews.co.uk, 22 June 2015

Retailing John Lewis overtakes Co-op

The Co-operative Group has been overtaken by John Lewis as the biggest co-op (a business owned and

managed by members) in Britain by turnover. John Lewis had a turnover of £10.9 billion compared with

the Co-op’s £10.8 billion. The Co-op has experienced

various difficulties which has resulted in it losing control of its bank. However, it claims that its small-

and medium-sized co-ops are in good health. It

remains the largest co-operative group in terms of membership. The Times, 24 June 2015, p44

Ikea to launch small stores Ikea plans to test out three small store formats in

the UK, starting with a 19,000 sq ft ‘order-and-

collect’ store in Norwich due to open in the autumn. The stores are not intended to replace Ikea’s huge

stores, for which it has struggled to gain planning permission in the UK. The small-formats will also be

trialled in other countries with a view to making the retailer more accessible to customers.

Retail Week, 26 June 2015, p3; The Independent, 25 June 2015, p21

Spanish store offers virtual aisles

El Corte Inglés, the Spanish department store, has

produced an app allowing Portuguese shoppers to browse virtual shopping aisles. Consumers will be

presented with a virtual shopping experience featuring aisles, interactive shelves, scales and a

drag and drop feature. Having tested the technology

in Spain El Corte says it has experienced a “surge” in mobile grocery sales. Virtual shopping also offers a

“non-invasive” style of online product marketing.


Services Amazon on its way to pay public for deliveries

Amazon is developing a mobile app, called “On My Way”, which will pay members of the public for

delivering goods to addresses that are on their way

to their destinations. Crowdsourced delivery is also being considered by Deliv, Uber and Instacart.

Amazon is considering other innovative delivery options such as storing deliveries in the boots of

Audi cars in Germany.


Uber could float after Chinese investment

There is speculation that taxi-hailing service Uber

could be launching an IPO in the near future. This follows the news that Chinese investor Hillhouse

Capital Group, one of Asia’s biggest fund managers, has purchased up to $1 billion Uber bonds. Uber has

11% of the Chinese taxi market although incumbent

operator Didi-Kuaidi enjoys the lion’s share (78%) of private taxi services in China. Uber has had a

poor reception in some countries including the UK. A SWOT analysis of the company is included.


Transport and travel Hybrid cars on the rise Ultra-low emission vehicles have more than tripled in

the UK over the past year as electric vehicles finally

start to take off. Plug-in hybrid cars and vans are eligible for £5,000 and £8,000 in grants respectively



but there is a question mark over what will happen when government grants are removed.

Manufacturers will have to find some attractive options to encourage consumers to buy the vehicles.

Plug-ins still represent just one in every 1,164

vehicles on the roads.


European ship building cruising for expansion

Business is picking up for Europe’s big cruise ship builders, such as Italy’s Fincantieri and Germany’s

Meyer. Cruising represents just a small part of the tourism industry but it is significant in Europe

because of the continent’s link to ship building. Data

from Cruise Lines International Association suggests that expenditure associated with cruising has been

increasingly benefiting the European economy since 2009. Last year over 22m people went on a cruise

and operators are keen to expand the market by offering diverse experiences: a Carnival cruise to the

Dominican Republic offers passengers the chance to

tend cacao plants and make artisanal chocolates. So far European cruise ship builders have fought off

competition from their Asian rivals ‒ most of the big commercial shipbuilding takes place in China, South

Korea or Japan ‒ but this situation is unlikely to last

for ever.


McLaren enjoys luxury boom

McLaren’s automotive division saw profits triple last year as wealthy young customers in Asia purchased

models such as the Coupe and Spider, which can travel at over 200mph. Profits in the division rose

from £4.5m to £15m while revenues were up by

67%. Asia is McLaren’s fastest-growing market but it enjoyed growth across all four of its geographic

regions. The market for six-figure, luxury vehicles seems to be booming around the world. The Daily Telegraph offers a SWOT analysis of the company.

The Independent, 26 June 2015, p60; The Daily Telegraph, 26 June 2015, pB2; Financial Times, 26 June 2015, p22

Buzz phrases

Can you Twerk? – Fo’shizzle These don’t sound like real words but they are in

fact just two examples of the vocabulary included in the new edition of the Oxford English Dictionary.

“Twerking” refers to a dance made popular in the

nineties by Miley Cyrus although the OED says it was first used in 1820 with a different spelling:

“twirk”. “Meh” features in The Simpsons as a way of “expressing indifference or a lack of enthusiasm”.

Meanwhile “Fo’shizzle”, which originates in rap and

hip-hop, means “for sure”. Some management jargon has also found its way into the OED, such as

the much-despised phrase “going forward”.


Written by CIM’s Knowledge Services Team

© Copyright 2015 CIM

The views expressed in Cutting Edge are not

necessarily those of The Chartered Institute of

Marketing.



On the Move

Name From To New title Source

Fiona Bousfield Teach First Find A Better Way Communications Manager

Third Sector

Marian Black Baring Asset

Management

Heartwood

Investment Management

Head of Investment

Marketing

Financial Times

Jo French Monsoon

Accessorize

Budgens Marketing Director The Grocer

Dave Hillyard Water Aid Oxfam GB Philanthropy and

Partnerships Director

Third Sector

Shayne Hoyne William Grant & Sons

Bacardi CMO Europe Marketing

Caroline May Octopus Quarto Publishing

Group UK

Director of

International Sales

The Bookseller

Geraldine McBride Bonnier Publishing Quarto Publishing

Group UK

Sales Director of

Children’s Books

The Bookseller

Jon Stefani Simon & Schuster Quarto Publishing Group UK

Sales Director The Bookseller

Promotions

Name Company Previous title New title Source

Scott Richardson Brace’s Bakery Sales and

Marketing Director

CEO The Grocer

Mauricio Vergara Bacardi VP Global Category-Rums

CMO North America Marketing



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Contents To fast forward click on the following links:

Agriculture, fishing and forestry

Building industry

Businesses and strategy

Charities and NGOs

Durable goods

Economy

Energy and utilities

Environment

Fashion

Financial services

FMCG

Beverages

Food

Health and pharmaceuticals

IT and telecoms

Leisure and tourism

Marketing trends and issues

Advertising

Agencies

Brands and branding

Conferences and events

Consumer behaviour

Customer relations

Direct marketing

Law

Marketing

Market research

Public relations

Sponsorship

Materials and mining

Media

Books

Film

Music

Social media

Television

Packaging

Retailing

Services

Transport and travel

Buzz phrases

On the move

Documents

Cutting Edge: Our weekly analysis of marketing news · Direct marketing Three types of data… Marketers rely on data but should they focus on first-, second-, or third-party data?