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  • Article

Audience Trends for Products with Supply Constraints

Michael TscherwinskiMedia Principal, IRI

Key Takeaways

  • Continue advertising through product supply constraints.
  • Leverage a data-driven approach to connect with the highest value consumers.
  • Advertise the portfolio to mitigate out-of-stock pressure on any one brand.
  • Enrich CRM data, conduct agile “test & learn” now and glean insights to invest at scale when supply conditions improve.

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NYCU: What Happens When Advertisers “Go Dark”?

While a new ARF study explores the long-term impact of different advertising strategies during last year’s pandemic, a new paper in the Journal of Advertising Research provides evidence on a specific strategy: “Going Dark.” When Brands Go Dark: Examining Sales Trends when Brands Stop Broad-Reach Advertising for Long Periods” is the title of a new paper in the Journal of Advertising Research (July 2021). Their study examined the sales performance of beer, cider and spirit brands that advertised intermittently over almost two decades. Of 57 cases, 34 stopped mass media advertising for more than a year. The researchers analyzed changes in sales for the years when brands stopped advertising relative to the last advertised year. Their findings:

  • On average, brand sales declined immediately in the first year and every subsequent year without advertising.
  • The sales decline was faster for smaller brands and for brands that already were declining in sales before advertising cessation.
There are several detailed findings in the JAR paper. But the simple answer to the question “what happens if advertisers go dark?” is that sales are likely to decrease for years. Source: Hartnett, N., Beal, V., Kennedy, R., Sharp, B., Gelzis, A. (2021, July). When Brands Go Dark: Examining Sales Trends when Brands Stop Broad-Reach Advertising for Long Periods. The Journal of Advertising Research.    

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NYCU: TWEET

Jason Furman is an American economist and professor at Harvard University's John F. Kennedy School of Government. He is also a Senior Fellow at the Peterson Institute for International Economics. Source: Furman, J. (2021, August 6). Twitter.

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NYCU: Americans' “Life Ratings” Reach Record High

Good news from Gallup’s survey on Americans’ satisfaction with their lives. The percentage of Americans who evaluate their lives well enough to be considered "thriving" on Gallup's Live Evaluation Index reached 59% in June, the highest in over 13 years of ongoing measurement. During the initial COVID-19 outbreak and economic shutdown, the thriving percentage plunged nearly 10 percentage points to 46% by late April 2020, tying the record low occurring during the Great Recession. Source: Witters, D. and Agrawal, S. (2021, July 7). Americans' Life Ratings Reach Record High. Wellbeing: Gallup (Life Evaluation Index).  

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How Long Can Brands Go Dark before Sales Suffer?

  • JOURNAL OF ADVERTISING RESEARCH

How long can large- and medium-size brands, with stable sales histories, afford to halt broad-reach advertising? The answer, according to a new study, is about two years before sales and market share start to shrink. Those brands are the exception. Previously declining brands, especially small ones, will see sales drop even further when going dark for a year.

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NYCU: In Brief -- Ad Agency Revenue, HH Income Surges

The Bad Overall, U.S. agency revenue tumbled 6.8% in 2020 as fallout from the COVID-19 pandemic pushed the economy—and agencies—into a deep, though remarkably short, downturn. That was the second-biggest drop since Ad Age began publishing the Agency Report in 1945. The sharpest decline (-7.5%) came in 2009 amid the Great Recession. The Good “Things are looking up,” Bradley Johnson writes in the introduction to the just-released Ad Age Agency Report 2021, citing reports of positive, first-quarter worldwide growth by WPP, Publicis Groupe and Interpublic Group of Cos., for starters. Source: Dumenco, S.  (2021, May 3). Your NewFronts need-to-know, plus key insights from Ad Age Agency Report 2021: Monday Wake-Up Call: The Ad Agency Report 21 is Out Today. AdAge. ____________________________________________________________________________ Household Income Surges Higher income, spending and saving are expected to help power a fast economic recovery. Household income rose at a record pace of 21.1% in March, as federal-stimulus checks helped fuel an economic revival that is poised to endure with an easing pandemic. The March surge in income was the largest monthly increase for government records since 1959, largely reflecting $1,400 stimulus checks included in President Biden’s fiscal relief package. Spending was also up sharply, increasing 4.2%, the Commerce Department said on Friday. That was the steepest month-over-month increase since last summer. Source: Cambon, S.C. (2021, April 30). U.S. Household Income Surged by Record 21.1% in March. The Wall Street Journal.  

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NYCU: Three Data Partnerships to Jumpstart in 2021

LiveRamp discusses the benefits of forming data partnerships.  The early advantages for companies that have done well during the pandemic and recession are quickly eroding. To compete moving forward, retailers must be empathetic to the full gamut of consumers they serve. Increasingly, this involves developing a data strategy centered on partnerships, both internal and external, that help you better understand where consumers are and how best to connect with them. Why data partnerships are vital in retail: data partnerships were once the purview of large corporations with the resources to build their own infrastructure for managing these relationships, each of which comes with unique technical, security, and privacy requirements. In my experience, companies enter into data partnerships for a variety of reasons from expanding their understanding of their customers to creating comarketing programs to building media businesses. Retailers looking to partner with CPG brands to deliver relevant, personalized content to consumers is a common example of the latter. What is interesting about the pandemic is that data partnership conversations have become the norm as people see the value and ability to start small in building a stronger, fuller, more complete understanding of consumers. While it’s not possible — or strategic — to enter into a data partnership with every third-party that your brand works with, perhaps you can start by connecting with your internal ecommerce team to gain deeper insight into how your customers are interacting with you and buying your products. This could lead you to shift your content strategy or run custom promotions with your suppliers to capture wallet share while meeting your consumer needs. Three ways to get started with data partnerships: Here are three ways to think about data partnerships that can build or increase your market advantage in 2021: Collect: Does anyone at your company have a single, complete view of the customer? Even at some of the largest retailers, not every team has access to the data they need. Think about the many ways first-party data is collected at your company and inquire as to how your team can gain access to this data to drive relevancy and increase media efficiency A quick win here would be the ability to access more data than you had before — browse data in addition to transactions, for example. The most valuable data you have is collected directly from your customers, so the more you use it, the more you’re able to better serve their needs. Discover three ways to get started with data partnerships by reading this article. Source: LiveRamp. Three Data Partnerships to Jumpstart in 2021.  

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Briggs Nov20 Forecast

  • Rex Briggs
  • Marketing Evolution

At our recent ARF DATAXSCIENCE event entitled, “The Future of Forecasting,” Rex Briggs of Marketing Evolution gave a fascinating presentation with recommendations on how businesses should conduct their affairs in Q1- Q3 of 2021. “Throughout my career in marketing research,” Briggs said, “I've made it a point to study the research designs and analytic techniques of other fields, particularly health care.” Briggs’s unique, cross-discipline approach revealed some fascinating predictions about the end of the pandemic, consumer behavior in the recovery and even some insights into the nature of research and forecasting itself.

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NYCU: The Ever-Changing Language of Marketing

ANA chooses “pivot” as the marketing “Word of the Year” for 2020. Runners-up include "virtual," "agility" and "resiliency.” "Pivot" has been named the marketing word of the year for 2020, according to an annual poll of the Association of National Advertisers (ANA) members. Pivot seems like an apt selection for a year in which many top marketers had to adapt their business models and strategies to a pandemic and economic uncertainty. “We pivoted from physical experiences to digital experiences,” said Raja Rajamannar, chief marketing and communications officer of Mastercard and President of Healthcare at Mastercard. He is also a member of the ANA's Global CMO Growth Council and author of the soon-to-be-released book Quantum Marketing, which is about how many marketers will need to pivot to adapt to a rapidly changing marketing world. “When the pandemic began, we started with a message focused on availability," added ANA council member Morgan Flatley, SVP, and Chief Marketing and Digital Customer Experience Officer at McDonald’s. "We then pivoted to a more emotional message, celebrating that people were still enjoying our food, but in this new socially distanced world. We then went to a message around ‘Thank You Meals’ that supported frontline responders. Through all of this, we’ve let the consumer guide our messaging.” Source: Mandese, J. (2020, December 14). ANA Pivots on Marketing 'Word of the Year'. Media Daily News: MediaPost.


Now let’s pivot to another view on marketing words: The New York Times thinks the language of modern marketing is overrun with buzzwords and acronyms. Here are their favorites:  
  • Adlob
  • B4H (and also B2B, B2C)
  • Brand heat
  • Customer journey
  • Hypertelling (and Storytelling)
  • Humaning
  • Occasion
  • OTT, PDOOH, and other TLAs
  • Phygital
  • Purpose-driven lifestyle brand
  • Snackable content
  • Solutioning
  • Thumb-stopping content
  • Top-of-funnel (TOFU)
Source: Hsu, T. and Maheshwari, S. (2020, November 25). ‘Thumb-Stopping,’ ‘Humaning,’ ‘B4H’: The Strange Language of Modern Marketing. The New York Times. Subscribers of the NYT can read the full article    

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NYCU: The Pandemic’s Uneven Effect on Spending

Consumer spending quickly recovered from the initial shock, returning to growth as early as June, but spending on services is still more than 5 percent off pre-pandemic levels. The reasoning behind these numbers is straightforward: As the pandemic severely limited people’s option to spend on services such as restaurant visits, travel and other leisure activities, which were either restricted or advised against, they shifted their spending to physical goods, trying to adjust to life with the coronavirus.  And while it’s certainly positive to see overall spending levels recover relatively quickly, the sluggish recovery of consumer spending on services is cause for concern. In 2019, personal consumption expenditure on services accounted for 47 percent of the gross domestic product, making it by far the biggest contributor to the country’s economic output. Source: Richter, F. (2020, December 14). The Pandemic's Uneven Effect on Consumer Spending. Per Capita Expenditure, Consumer Spending: Statista.  U.S. Bureau of Economic Analysis  

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