Spillover Benefits of Online Ads

  • MSI

Email advertising can increase spending in actual, physical retail stores, new statistical tools show. If this is not uplifting enough for those who deal with such advertising, analysis published in an MSI working paper found something else surprising. The effects are highest among consumers with fewer recent interactions with that particular retailer.

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Amazon Dominates Retail Media Ad Revenues

eMarketer data illustrates Amazon’s dominance, but also shows good results for Instacart. eMarketer points out that, as inflation and supply chain issues continue to compound, digital ad revenues can help retailers and marketplaces bolster the bottom line amid slowing ecommerce growth. In Q1 2022, Amazon’s ad revenues grew 25% year-over-year and exceeded those of its physical stores—and at a much higher margin, per its earnings release. Instacart, on the other hand, may boast much less ARPU than Amazon, but the delivery platform’s high rank shows it is successfully diversifying its revenues as other providers swarm into the grocery delivery space. Source: Lebow, S. (2022, May 5). Amazon dominates retail media ad revenues, but Instacart looms large. Insider Intelligence, eMarketer.

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Obstacles for the Metaverse

Nearly three-quarters of consumers say they have heard of the “Metaverse,” as of March, according to Marketing Dive. That’s a noteworthy bump in awareness compared to last July (32%). But familiarity does not equate to understanding. A March 2022 survey by Wunderman Thompson Intelligence in the US, UK and China (shared with Marketing Dive) found that 74% have heard the term metaverse. Does that mean the metaverse has already entered the mainstream? The study also found that just 15% of respondents felt they could explain what the metaverse is to other people. Despite this, two-thirds of consumers believe the concept could be life-changing, 68% described it as the “next internet” and 74% stated it is representative of the future. Marketing Dive commented that most people simply have heard the term. That does not correlate to education about its innerworkings, as few would feel confident describing what the metaverse is in practice. Wunderman Thompson Intelligence describes it, at the most basic level, as “an extension of our lives enhanced by technology.” Given the knowledge gap, the growing belief among consumers that the metaverse represents “the future” might need to be taken with a grain of salt. Worries persist around the metaverse, with 72% of parents concerned about children’s privacy and 66% about children’s safety. Still, the study, which surveyed over 3,000 people in the 16-65 age range in the U.S., the U.K. and China, indicates that the metaverse has earned a spot in public discourse that could help hurry along its adoption. In an encouraging sign for brands, 89% of consumers surveyed by Wunderman Thompson Intelligence said the advertising industry would be impacted by the metaverse. Other top-ranking categories included retail (86%), fashion (85%) and finance (82%), while food and beverage landed at the bottom of the list (74%). Source: Adams, P. (2022, May 6). Metaverse goes mainstream, but most consumers still don’t understand it. Marketing Dive.

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Last Words on Day 1

Elizabeth Tarpinian (Senior Director, Consumer & Market Insight, Unilever NA)

  • “We feel we are in this incredible digital and technological revolution.”
  • “You have this context where the consumer is feeling trust issues.”
  • (There is a) “War for attention.”
  • “Continuous disruption where everything is massive, complex and it is moving….… (All of this) can feel unsettling….”
Vas Bakopoulos (SVP, Head of Industry Research, MMA Global)
  • “Some things are still under the radar, although they are huge. For example, retail media has fantastic growth. There are new media companies because of that, the Walmarts and Targets.”
  • “A few years back not a lot of people could have seen the scale of TikTok, (and) it has become a dominating culture.”

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NYCU: 3 Things to Know About the Metaverse

eMarketer offers a quick primer on the latest buzz word. The “new” world: The metaverse has the potential to disrupt everything from business travel and the future of work to gaming, health and fitness, entertainment, marketing and education. Some companies see the metaverse as the evolution of the internet or smartphones, but instead of interacting with keyboards or touchscreens, users are immersed in interactive environments, making them captive and active participants in cyberspace. What the metaverse means for retail today, and what's in store for tomorrow: Though the metaverse remains a fuzzy concept, a growing number of brands and retailers are jumping on the bandwagon. While the promise of the metaverse for retail holds great appeal (shopping experiences integrated seamlessly throughout immersive digital worlds), the development of the technology to support it is still in the very early stages. Insider Intelligence Editors recently took  a look at the factors driving the surge of interest, key opportunities and challenges for brands and retailers presented by the metaverse, and what actions can be taken now to prepare. At National Retail Federation’s Big Show, all eyes were on the metaverse. Retailers are getting excited about the metaverse, seeing it as an opportunity to deepen customer relationships. Emma Chiu, Global Director at Wunderman Thompson Intelligence, held a session discussing why the metaverse shows so much potential: 85% of consumers feel that for brands to be successful in the future, digital presences will be “essential.”

  • The takeaway: Despite not quite existing yet, the metaverse may already be too big to fail.
Source: Insider Intelligence Editors. (2022, January 27). 3 things to know about the metaverse. INSIDER INTELLIENGE,  eMarketer.    

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NYCU: The Supply Chain Crunch Hits the Ad Industry

The "New Normal" isn't very normal yet.

The global supply chain crunch is hitting the ad industry, even before the Q4 holiday shopping season moves into high gear. Brands and their creative and media agencies plan campaigns months or even a year ahead. But those campaign rollouts are being put on pause in some cases, or reined in due to supply chain issues, Business Insider reports. Sometimes, fewer products can be manufactured and delivered, so ad budgets need to come down or the media will be too high a percent of the overall cost of sales. In other cases, brands rethink creative. For instance, Audi changed its electric vehicle ad campaign to focus more on top-level branding and reaching potential future customers or brand identifiers on platforms like TikTok that are new for the company. That's because the car maker doesn't have the raw materials it needs right now to actually make and sell new cars—the point of the original ad campaign. "We're finding ourselves going into planning sessions many times a year that were not budgeted for," says one agency exec. "It's more cost on the clients and more labor requirements for us."

Source: Rittenhouse, L. (2021, October 11). Deliver Or DelayBusiness Insider.

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How Brands Can Use an Endorser’s Smile More Effectively


A study on endorsers’ smiles in service-brand marketing brings new relevance to the slogan, “Service with a smile.” But which type is more effective, broad or slight? Researchers analyzed these two different types of smiles and found that they resonated differently, depending on how consumers relate to other people and the brand. Service marketers can use the study’s methods to more easily develop and test their spokesperson’s smile.

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NYCU: McKinsey’s Key Consumer Trends

A team of analysts at McKinsey & Co. has issued the report, “US consumer sentiment and behaviors during the coronavirus crisis.”  The conclusions, summarized in five key trends, are based on an analysis of Q2 2021 data in comparison with data from a year ago and pre-pandemic data.

  1. Spending Recovered. US consumer spend rebounded in Q2 2021, driven by the confluence of increasing vaccination rates, stimulus payments, an optimistic outlook toward economic recovery and the reopening of the economy. Consumers’ pent-up demand and willingness to spend in some discretionary categories caused spending to grow.
  1. Ecommerce Growth Continued. E-commerce sales maintained a trajectory of outsized growth, with online penetration approximately 35% above pre-COVID-19 levels, and e-commerce showing more than 40% growth over the past 12 months. At the same time, brick-and-mortar spending on retail categories stayed relatively consistent during this whole period.
  1. Recovery Across Categories Remained Uneven. Despite overall spend growth, retail channels have evolved into clear groups of spend performance, ranging from those experiencing continued, large declines (including out-of-home entertainment such as theaters and amusement parks) to those seeing sustained, elevated growth (such as spending on the home).
  1. Brand Loyalty Shakeup Continues. Consumers are again adjusting their behavior: As many as 30 to 40% of consumers continue to switch brands or retailers, driven primarily by younger consumers seeking value, combined with greater emphasis on purpose-driven alignment and quality.
  1. “Homebody Economy” Persists. Consumers and employers are adjusting to a “next normal.” In addition to increasingly hybrid work models, we continue to see a corresponding shift in purchases and investments, focused on home-based working and living. We expect to see this trend continue in the medium term.
Source: McKinsey & Company. (2021, August 19). US consumer sentiment and behaviors during the coronavirus crisis. McKinsey & Company.  

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NYCU: Job-hopping Heats Up

Nearly two-thirds of workers are on the hunt for a new job, while almost nine out of 10 company executives say they are seeing higher-than-normal turnover at their organizations, according to a new survey from PricewaterhouseCoopers (PwC). The number of workers looking for a new job has almost doubled since spring. About 64% reported they were seeking a new job at the start of August, when PwC surveyed 1,007 full-time and part-time U.S.-based employees and 752 executives. That's up from 36% of workers in May. It’s a "significant" jump, Neil Dhar, PwC's chief client's officer, said. "Simply put, many workforces are just tired, and they're looking for change." Hispanic and Black employees are more likely to be looking—82% and 67%, respectively—than white workers, about 57% of whom cited a desire for a new job.

  • The biggest reason for the job search for many is a better salary, with 46% of women saying better pay was the biggest driver compared to 34% of men.
Many companies are recognizing this and increasing the pay rates on certain jobs. Wall Street firms Bank of America, Barclays, Citigroup, Goldman Sachs, JPMorgan Chase and Morgan Stanley have raised the salaries of their first-year analysts this year. What’s more, many retailers and restaurant chains, including Costco, Chipotle, McDonald’s and Under Armour, have boosted their minimum wages to $15 or more to entice workers. After salary, workers cited better benefits and career advancement as other top motivators. "Employees have been clear that they deeply, deeply value nonmonetary benefits like expanded flexibility, career growth, well-being, and upskilling," Dhar said. Source: Leonhardt, M. (2021, August 20). Job-hopping heats up: 65% of U.S. workers are looking for a new job. Fortune.  

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NYCU: Amazon Delivers More Ads

Most people think of Amazon as an online shopping and delivery company. However, as GeekWire points out, an increasing portion of Amazon’s profits come from advertising, that is, charging companies to promote their products on Amazon’s online marketplace.   Amazon’s recent earnings report shows that its advertising business continues to grow rapidly and is now one of the company’s key sources of revenue. As Amazon’s online shopping business has surged during the pandemic, so too has advertising. While Amazon does not break out specific financials for advertising, its “Other” category primarily includes sales of advertising services. The second quarter report shows a 87% growth rate, up from 41% in the year-ago quarter. The “Other” category has grown to a nearly $32 billion annual business, based on the Q2 2021 metrics. Amazon CFO Brian Olsavsky noted that some of the year-over-year growth in advertising was due to the slowdown a year ago. “But the majority of it is all the new products and functionality that we’ve been able to roll out for customers and just more demand for advertising and higher bid rates and click through”. Amazon now has a 10% share of the U.S. digital ad market, according to eMarketer; Facebook and Google combined have more than 50% market share of the digital ad market. Source: Soper, T. (2021, July 29).  Amazon’s advertising business is surging amid industry-wide ad sales boom for tech giants. GeekWire.  

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