Insight Exchange 2


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McCann Erikson - Johannesburg, South Africa - Insight Exchange Trend Presentation - 13 August 2009

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  • Sources: Nielsen Online Video Advertising Effectiveness study / NeoEdge Networks M2Moms Online Publishers Association World Wide Worx
  • USA Today reported last week that food makers are combating rising input prices by putting less in the containers they sell us, but charging the same per unit price as the old volume. Since January 2008, Frito-Lay has cut the number of chips in bags across all brands from Lay’s to Doritos. A jar of Hellmann’s mayonnaise that was 32 ounces is now 30. Shedd’s Spread Country Crock was shrunk from 48 ounces to 45. Kellogg downsized Frosted Flakes, Rice Krispies and Mini-Wheats in 2006. Boxes shrank from 24.3 ounces to 24 and from 19 ounces to 18. Henkel of America downsized its Dial soap bath bar from 4.5 ounces to 4.0. And this spring, Bounty cut the number of towels on a roll from 60 to 52. Some experts say it’s a consumer mind game
  • Games are developed exclusively for clients Brings customers to the brand
  • Nielsen-IGA Worldwide research Euromonitor
  • Procter & Gamble attempts to endear Secret deodorant to athletic, young girls with Danica’s Secret, a racing game in which the gamer allies herself with female indy car racer Danica Patrick and competes with a sloppy bunch of boys.
  • A company that’s doing it With the fast demand developing for advanced mapping software incorporating accurate, intelligent spatial information, MapIT geared up to meet the challenge to becoming a dominant player in this market. MapIT recognised the need for spatial information in formats other than the already existing paper-based maps years ago. They acknowledged the mapping requirements of businesses operating in a competitive economy by researching worldwide developments and understanding the need to keep pace with global trends. International companies such as Map Quest, Webraska, Yeoman and Tele Atlas gave them the insight to adjust their strategic thinking in order to align our services with the technological demands being made working against today’s business backdrop. These companies had already started looking at the mapping necessitated by technologies such as the Internet, full-blown vehicle navigation, asset tracking, fleet management and mobile location based services.
  • They can list your company's branches on MapIT digital maps used by the majority of local personal navigation devices, vehicle tracking and fleet management services, emergency services, mobile applications, call centre solutions, business planning and market analysis tools, location based services as well as Internet mapping sites.  Location based marketing represents one of the fastest growing marketing and advertising opportunities available in the world today. Digital maps and personal navigation devices have become important customer communication tools as the world becomes more mobile. It offers daily communication with in-vehicle captive audiences, cellular phones and Internet maps. A POI is a specific coordinate or address on a digital map. On the road, the owner of a GPS, or cellular phone, can locate the telephone number, website address of restaurants, filling stations, hotels, B&Bs, ATMs, supermarkets or emergency services closest to your present location. Then auto-navigate along the shortest route to the front door of the business you selected. 
  • Join the rush to place your company logo and address details on the Southern Africa mapset used by most GPS owners in South Africa - a corporate POI is a guarantee that your customers will find you wherever you are in Southern Africa. Location based marketing – the ability to locate goods and services on a Personal Navigation device or an interactive website and then route yourself directly to a specific address - represents the next wave in direct advertising.
  • Under R4 per sachet
  • Primarily a reaction to ostentatious, is propelled by the current downturn and an accompanying need for less flaunting and more restraint. Last but not least, environmental concerns are leading segments of wealthy consumers to favor the discreet. In short, DISCREET-CHIC represents (or will claim to represent) a more refined, timeless, understated and cultured display of wealth. And where better to look for the first signs of this luxury counter-trend than in the most established urban hotspots, like LA, New York, Paris and London? A few random DISCREET-CHIC spottings: Last fall (2008), the Le Meridian in Beverly Hills underwent a complete transformation to become SLS Hotel at Beverly Hills ( The SLS brand was designed by Philippe Starke, who intended the hotel’s design to move beyond interior design and approach the status of art. The focus is on qualities like timeless elegance and intelligence. The latest addition to the hotel—as reported by W magazine in October 2008—is a second, secret, exclusive restaurant called SAAM which is run by chef Jose Andres and is unmarked and unlisted. (
  • State of the industry survey by RSM:
  • Insight Exchange 2

    1. 1. D130809
    2. 3. FACTS & FIGURES Interesting titbits to intrigue and enlighten
    3. 4. Intro <ul><li>Identify a theme to review </li></ul><ul><li>Highlight key statistics & interesting facts </li></ul><ul><li>Today’s theme: digital </li></ul>
    4. 5. 60% of US users who sign up to Twitter who fail to return the following month 43% increase in traffic to Twitter thanks to the Oprah effect 15% of 25 000 registered blogs in SA are active 43% of women in US (18-75) would give up magazines for blogs 3 of top 5 blogs in SA are rugby related blogging SA ranks 4 th in Africa in terms of internet usage 42 nd globally online marketing Increased by 38% to R419m from 2008 to 2009 Accounts for only 1% of total R34.18 billion ad spend in SA 65% of the SA online population uses Google 500% increase in brand awareness for advertisers using in-game advertising twitter internet usage in-game advertising internet penetration 24.8% LSM A 9.4% total SA
    5. 6. The question is no longer whether digital marketing works but rather “How can digital marketing work for me?”
    6. 7. TRENDS
    7. 8. Trends <ul><li>Product Elasticity, how resilient are products to cost cutting </li></ul><ul><li>Advergaming, brands need to invest in mobile gaming </li></ul><ul><li>Freeeconomics, focus on your core business and give the rest away for free </li></ul><ul><li>Location, Location, Location, put your brand on the map </li></ul><ul><li>Lipstick effect, because they worth it </li></ul><ul><li>Staff Still don’t understand, dare to know what you don’t know </li></ul><ul><li>Rent don’t own, scared of commitment? </li></ul><ul><li>Recession guilt, hold that thought </li></ul><ul><li>Importance of research, know your stuff </li></ul>
    8. 9. Product Elasticity It’s a consumer mind game as you hide your cost cutting efforts. The question is how long till the elastic snaps?
    9. 10. Product Elasticity <ul><li>“ Big companies are protecting profits with subtle repackaging, putting a little less into boxes of cereal, containers of ice cream, rolls of paper towels and other.” </li></ul><ul><li>Michael Bush </li></ul>
    10. 11. Product Elasticity <ul><li>Companies are cutting costs and are doing so at the expense of their customers - it is interesting to consider how far these cuts will go before consumers react negatively </li></ul><ul><li>As manufacturers cut costs, the question arises as to how this will affect demand for the product </li></ul>
    11. 12. Shrinking Packs Trimmed by 2 ounces Boxes shrank from 19 ounces to 18 32 ounces is now 30 17 to 15 sticks 10% smaller
    12. 13. Advergaming Brands are finding success in unusual places
    13. 14. Advergaming? <ul><li>&quot; People will play with your brand for hours; you cannot get better exposure . Advergames are a natural and increasingly accepted evolution from print ads, TV ads and banners .” </li></ul><ul><li>Eberhard Schoneburg, CEO/Chairman, Artificial Life </li></ul>
    14. 15. Profitable & Effective? <ul><li>Parks Associates estimated advertising in the game industry to be $370 million in 2006, growing to $2 billion by 2012 </li></ul><ul><li>Young adults spend an average of six hours a week gaming. The casual online gaming audience is more “mainstream,” skewing female and 30-60 years old </li></ul><ul><li>More traditional marketers, like McDonald’s, Adidas, Nike, Ford, GM and even Procter & Gamble are taking advantage of in-game advertising. It is also important to note that the majority of gamers (82%) have no problem with in-game ads </li></ul>
    15. 16. Gaming Examples Hancock – PS3 – Pain P&G - Danica's Secret Mercedes Benz Second Life Modern & classic advertising sponsored mobile games
    16. 17. Freeconomics You can make money by giving something away for free
    17. 18. Freeconomics <ul><li>Until recently &quot;free&quot; was really just the result of what economists would call a cross-subsidy: getting one thing free if you bought another, or getting a product free only if you paid for a service </li></ul><ul><li>Last decade saw a rise in free products to induce purchase of the line extensions (Energizer and torches) </li></ul><ul><li>Enter the digital revolution </li></ul><ul><ul><li>Apps that support a key offering </li></ul></ul>
    18. 19. Ryanair – Making Money In Other Areas
    19. 20. Examples Citizen Metro Supported by advertising Radiohead gave fans the chance to pay what they think &quot;In Rainbows&quot; is worth Chris Andersons FREE book distributed digitally
    20. 21. Location Location Location Put your brand on the map
    21. 22. Location Based Advertising <ul><li>Location based marketing represents one of the fastest growing marketing and advertising opportunities available in the world today </li></ul><ul><li>Digital maps and personal navigation devices have become important customer communication tools as the world becomes more mobile. It offers daily communication with in-vehicle captive audiences, cellular phones and internet maps </li></ul>
    22. 23. Use Digital Maps To Locate Businesses <ul><li>It is vital that your consumers can find you easily, through the medium of their choice </li></ul><ul><li>What you should do as a minimum </li></ul><ul><ul><li>GPS co-ordinates </li></ul></ul><ul><ul><li>written directions </li></ul></ul><ul><ul><li>downloadable map to print </li></ul></ul><ul><li>Southern African digital maps have over 150 000 Points of Interest already that fall into 250 categories </li></ul>
    23. 24. Brands That Are Doing It
    24. 25. Trend Is Set To Grow <ul><li>By 2010, up to a million people could be using ‘local search’ techniques to locate goods and services in South Africa, to plan their trips, or to facilitate social and recreational activities </li></ul><ul><li>Local sales of personal navigation devices reflect the explosive growth in this field; ownership – including GPS enabled Smart Phones – is expected to grow three to four fold by the end of 2007 - from 100 000 units at the beginning of 2007, to more than 300 000 by the end of the year </li></ul>
    25. 26. Lipstick Effect In times of recession consumers are looking for smaller rewards
    26. 27. Lipstick Effect <ul><li>“ The evidence shows that when budgets are squeezed, people simply substitute large extravagances for small luxuries” </li></ul><ul><li>Dhaval Joshi, analyst with RAB Capital </li></ul>
    27. 28. The History Of The Lipstick Effect <ul><li>The lipstick effect generally occurs during recessions when people are looking to save money, the first to go is luxury items. The strange phenomenon is that lipstick sales soar during these times </li></ul><ul><li>It's a phrase coined by Leonard Lauder, Chairman of Estee Lauder, who saw a huge jump in lipstick sales after September 11 th , 2001 </li></ul><ul><li>The index also climbed during WWII, past recessions (such as in 1990) and depressions </li></ul>
    28. 30. Staff Still Don’t Understand The importance of internalizing the brand message
    29. 31. Staff Still Don’t Understand <ul><li>Staff within companies are not fully trained (you may think they are) or aware of their employers products and services </li></ul><ul><li>The most important area to consider is the first point of contact for the customer </li></ul><ul><li>The easiest way to teach staff about your products and services is by letting them use and experience it themselves </li></ul>
    30. 32. The Reception Test <ul><li>5 out of 12 transferred </li></ul><ul><li>2 out of 7 got it right </li></ul>
    31. 33. What Does Your Company Do? <ul><li>Cathay Pacific: We are an airline, we sell tickets and carry passengers. </li></ul><ul><li>Foodcorp: We are head office for Nola and other companies. That’s what we do. </li></ul><ul><li>General Motors: Cars… we sell cars, engineering. </li></ul><ul><li>Hewlett Packard: IT, we sell Hewlett Packard equipment. </li></ul><ul><li>L’Oreal: OK well I’m temping for the day, ill put you through to the other receptionist > put on hold for 2 minutes > ummmmummm > (put onto someone else > Haircolour, fragrances and cosmetics; we manufacture and sell it to the retail. </li></ul><ul><li>Merck: We a pharmaceutical company and chemicals. Well we sell products, certain products for diabetes, cardiac failure and high blood pressure. </li></ul><ul><li>Mastercard: It does like Mastercard, you saw the brand you choose like Visa or Mastercard to pay. You use it for money. </li></ul><ul><li>Microsoft: We give the support on Microsoft products and licensing information. </li></ul><ul><li>Nestle: Food company. We do milk, instant milk, cream, cremor, Nescafe, Milo, coco, cereal. A number of them and also dog food and cat food. </li></ul><ul><li>SABC: We are the SABC TV license customer service. The SA broadcasting company. (Got very cross) Where do you come from? Don’t you know what SABC does? Are you South African? That is what SABC is all about. </li></ul><ul><li>Telkom: We a landline operator for SA. We have different services that we provide. It all depends on the clients needs so its hard to say. </li></ul><ul><li>UIP: Distribution company of movies. Please can I put you through to someone. This is just the switchboard. </li></ul>
    32. 34. So What? <ul><li>There needs to be an ongoing program to train staff </li></ul><ul><li>10 – 15% of the marketing budget should be dedicated to internal marketing </li></ul><ul><li>Knowledge and understanding needs to be tested as consumer awareness </li></ul><ul><li>Never underestimate the power of a free T-shirt </li></ul>
    33. 35. Recession Guilt Affluent consumers may have money, but are they spending it?
    34. 36. MasterCard Research: July 2009 Black Tulip
    35. 37. Discreet Chic <ul><li>Primarily a reaction to ostentatious, is propelled by the current downturn and an accompanying need for less flaunting and more restraint. Last but not least, environmental concerns are leading segments of wealthy consumers to favor the discreet. </li></ul><ul><li>In short, DISCREET-CHIC represents a more refined, timeless, understated and cultured display of wealth. </li></ul>SLS Hotel, designed to move beyond interior design and approach the status of art
    36. 38. Importance of Research Market research is becoming EVEN MORE important during the recession
    37. 39. Importance of Research <ul><li>&quot;With the economy clouding the future, why throw away your flashlight when it could shine on intriguing consumer insights, hot technology trends and market opportunities” </li></ul><ul><li>Geoff Ramsey, CEO of eMarketer </li></ul>
    38. 40. The Importance of Research <ul><li>Six out of ten researchers have seen their budgets decline (only 1 in 20 has experienced an increase ) </li></ul><ul><li>Research activity in most sectors is expected to experience a net decline, most significantly in the automotive and media sectors </li></ul><ul><li>48% of research companies expect to spend less on face-to-face research </li></ul><ul><li>Web-based data collection will continue to increase, although at a reduced rate compared to previous years </li></ul>
    39. 41. Online software to create and manage surveys easily
    40. 43. Some Ideas <ul><li>Break away from traditional research formats </li></ul><ul><li>Use a dipstick approach to identify research formats to focus on e.g. VoxPops </li></ul><ul><li>Use the Internet: online surveys </li></ul>
    41. 44. Rent, Don’t Own Renting is becoming the more popular option
    42. 45. Rent, Don’t Own <ul><li>Consumers want less risk when purchasing luxury items, and are even willing to pay more </li></ul><ul><li>The rent-to-own industry has a history few retailers would envy but recent sales most would covet, e.g. Aaron's, the second-largest retailer in the $6.3 billion industry, plans to open 200 stores in 2010 on the heels of an 18% increase in same-store sales last year </li></ul>
    43. 46. Rent, Don’t Own Rent to own, electronic products Rent jewellery Rent handbags Rent Art BT Games: console rentals
    44. 47. The Consumer Continues To Evolve
    45. 48. Thanks! [email_address]