2015 Earned Brand Australia

Innovation and the
Earned Brand
Australia

Consumers are embracing innovation
at a faster pace than ever before…
The Earned Brand | Edelman 2015 | pg 2

And yet they feel the pace of business
innovation is too fast
Q349-351. Below are a number of statements. For each, please think about the pace of development and change in business and industry today and select
the response that most accurately represents your opinion. (Not Enough, Too Much) Informed Publics, Australia. (2015 Edelman Trust Barometer)
The pace of development and change in
business and industry in Australia today is…
23%
TOO FAST
JUST RIGHT
22% 53%
TOO SLOW

And what can the
rest of us learn
from this?
Why the contradiction?
How are today’s
fastest-growing
brands convincing
consumers to accept
the risks that come
with innovation?
What are
consumers’
real feelings
about innovation?

What is innovation?
A re-imagination of categories,
products, services, operations,
models, design, etc. that
create more value, for the brand
and for consumers

The Earned Brand Methodology
Timing
April – May 2015
Quantitative Online Survey
10 countries: U.S., Mexico,
Brazil, France, Germany, U.K.,
China, Japan, India, Australia
10,000 respondents, nationally
representative of age, gender,
and region based on most
recent country status data
Behavioral Focus Groups
16 millennials in New York and
London
Mobile Diaries
25 millennials, with them on their
mobiles, for 2 weeks, in Brazil,
U.K., India, China and the U.S.
A global survey of
consumer attitudes
toward brand innovation

People believe in the
promise of innovation.
Insight 1

Q5P1: Please select the statement from each group that best represents how you feel. (Innovation is just an overused
term, it’s not leading to anything) vs. (Innovation is essential for us today and it’s helping us to progress). Q5P4: Please
select the statement from each group that best represents how you feel. (Innovation is making us more and more like
robots) vs. (Innovation is opening the human spirit) 10-country global total and in Australia.
Percent who agreed with each statement:
Innovation inspires people
“When you look at
anything innovative,
it will inspire you
and make you feel
more energetic.”
Zhu X, 22, China
92%
innovation opens
the human spirit
innovation is essential
and it’s helping us
to progress
77%
88%
69%

And they believe that business has
the biggest role to find the next big thing
Q15. Where do you think the next big thing will come from? In Australia.
Consumers in
Australia believe the
next big thing will
come from…
BUSINESS
34%
INDIVIDUALS/PEOPLE
LIKE ME
69%
38%
ACADEMICS/UNIVERSITIES
79% globally

71%
45%
21% 23%
9% 11%
53%
27%
47%
51%
15%
37%
Technology Mobile Energy Healthcare Food and beverage Education
But they believe that innovation should come from
industry sectors beyond technology and mobile
Q65: Thinking more specifically about the innovation in the products and services you use throughout your life, what industries do you see
the most innovation in TODAY? Q66: … what industries do you want to see innovation in TOMORROW? In Australia
Percent of Australia’s consumers who say they see innovation coming from each
industry sector today, and who want to see it from each sector tomorrow:
INNOVATION GAP
26
28
26
6
INNOVATION TODAY INNOVATION TOMORROW
WANT LESS TOMORROW WANT MORE TOMORROW

They believe that brand
innovation should have big
goals with societal impact
Q14. What do you think the role of innovation is for brands today and in the future? (in the future) 10-country global total and in Australia.
to
improve
society
to push our
thinking as
a society
69% 66%63%
agree that brand innovation
needs to impact society
(one or more of the following)
in9 10
73%
67% 63%
to let us be one
step ahead of
other countries

And they question your motives
66%
70%
65%
69%
67%
61%
65% 65%
67%
62%
65%
Global Australia U.K. U.S. Japan France Germany Brazil China India Mexico
Q14. What do you think the role of innovation is for brands today and in the future? (today) 10-country global total and in Australia
Percent who say the role of
innovation for brands today
is “to make more money for
the company”:
consumers globally believe
brands are innovating to make
more money for the company
in2 3

Insight 2
Consumer acceptance
of brand innovation
cannot be bought.
It must be earned.

The stakes:
Because of their concerns, they’re not buying
Q27. Thinking about the below, please indicate which of the following you feel is happening in the world today. … IMPACT ON PURCHASING
DECISION 1 = Has no impact on what I buy … 4 = Makes me not want to buy something. In Australia
say they will not buy
because of their concerns
Percent of Australia’s consumers who feel that each is happening in the world
today, and percent who say their concerns makes them not want to buy something:
87%
Privacy
issues
Being
always on
Security Environment

3 in 4 have privacy concerns
Privacy concerns are especially strong in
Germany, the U.K., the U.S. and Australia.
66%
74%
61%
58% 56%
76%
55%
66% 64%
71%
75%
Global Australia Brazil China France Germany India Japan Mexico U.K. U.S.
Q22. Thinking about the below, please indicate which of the following you feel is happening in the world today. 10-county global totals
and in Australia
Percent who feel that each is happening in the world today –
Privacy issues:
Privacy
issues
74%
“I don’t care if they know I go to the
grocery store—but I don’t want them to
sell information to that grocery store.”
Nick, U.S.
Source: Mobile Diaries

1 in 2 concerned about having to be always on
Germany and Brazil are most concerned; Japan and China are less so.
50%
54%
65%
36%
53%
63%
41%
29%
57%
46%
53%
Q22. Thinking about the below, please indicate which of the following you feel is happening in the world today. 10-country global totals and
In Australia
having to be always on:
Being
always on
54%

2 in 3 have security concerns
Security concerns are highest in Japan and the
U.S., and less of an issue in China.
54%
69%
51%
33%
49%
44% 44%
75%
41%
64%
71%
In Australia
your security being compromised:
Security
69%
“Some back door issues may leak
personal information, including
personal banking details.”
Yao, China

And the majority have concerns
about the impact on the environment
Environmental concerns are global,
but strongest in Europe and Latin America.
58%
61% 62%
52%
62%
66%
54% 52%
62%
54%
51%
In Australia
impact on the environment:
Impact on
environment
61%
“Technology and innovation bring
convenience, but it brings problems,
too. Cars change my life, but too
many cars result in air pollution,
traffic jams and parking problems.”
Yao, China

Insight 3
While the promise of
innovation inspires,
people first need
to be reassured.

Consumers are twice as likely to want to be
reassured than inspired by a brand
Q35: When a brand tells me about something, I
want it to… “Reassure me of quality,” “Inspire me”
10-country global total
people want to be
REASSURED
in2 3
people want to be
INSPIRED
in1 3

We may be innovating,
but we are failing them as marketers
Percent who feel that brands have changed a lot, and proportion who
feel that this is the right or the wrong direction:
say brands are not moving
in the right direction in how
they communicate
in2 3
Q20: Thinking about change in the past 5 years, how do you feel the [ … ] industry has evolved in relation to the following
factors: How brands in this sector…(communicate with me) / (listen to me) // (moving in wrong direction) 10-country global total

They feel like brands are shouting at them
What brands say doesn’t feel real
Q21: Please indicate how much you agree or disagree with the following statements. (I’m getting bored/frustrated by constantly being told I
need to upgrade/update the products I already have.) (Top 2 box). 10-country global total and in Australia. Q8P1: The way magazines, the
internet, advertising, can all enhance photos… (Makes me more inspired than ever before by what I see) vs. (Makes me wonder what is real,
and what I should believe) 10-country global total and in Australia.
57%
because of photo manipulations
in advertisements and online
they don’t know what to believe
are bored/frustrated
by constantly being told
they need to upgrade/update
60%
67%
71%

Insight 4
“I rely on my peers to
reassure me. Because
their experience is
my evidence.”

We’ve always known that peers provide recommendations,
but today peers also help convert purchasers
Q41: Thinking about the conversations you have online and offline with friends and other people like you about brands, products and
services you purchase, what impact do they have on you? 10- country global totals and in Australia
The impact of online/offline conversations about
brands with friends and other people like me:
Build inspiration
Push consideration
Moment
of
Truth
16%
17%
25%
27%
29%
37%
44%
45%
They give me a sense of community
They get me
They push me to try new things
They suggest products/services
They make me trust the brand more
They help me overcome concerns
They help me make decisions
They warn me about the risks
13%
14%
16%
32%
26%
42%
43%
48%

The channels consumers rely on to be reassured are
peer-to-peer, rather than brand-to-consumer
Mobile Diaries
When millennials want to learn about brand
innovation, their go-to channels are peer-to-
peer: Skype, Whatsapp, Facebook and SMS.
Behavioural Focus Groups
Biometric testing and purchase behaviour
showed that peer-to-peer channels (Twitter,
blog posts, word of mouth) had a greater
impact, by a 6 to 1 margin, on changing
opinions of and purchase intent for new
innovations than advertisements.

Brands win if they power the peer conversation
Percent who agree with each statement:
“Our unique asset is
our host community.”
Nathan Blecharczyk,
founder of AirBnB
“Our next innovation is
introducing a peer to peer
platform so that our private
car owners in Europe can
share their cars.”
Tina Muller, CMO, Opel
Q36. How much do you agree or disagree with the following statements? (Top 2 box)10-
country global totals and in Australia
67%
I trust a brand more if
it encourages me and
and other customers
to review its products
and services
I trust a brand more
if I find it easy to
review its products
and services
64%
64%
59%

Insight 5
Messaging alone
doesn’t work.
It’s about how your
brand behaves.

Two-thirds of consumers are undecided about
innovation. What do they need from brands?
Last mover First mover
8% 15%
Percent of respondents who fall into each
consumer innovation typology:
Methodology: Statistical analysis of consumer groupings based on their attitudes to brand innovation showed that 66% of
consumers are open to innovation—but have concerns that need to be addressed before they will buy. They also have specific
expectations for how brands must behave to address those concerns. Other consumers were either “first movers” (15%), “last
movers” (8%), or resistant to innovation (11%).
66%
Undecided Consumers

What undecided consumers need
from brands when it comes to innovation
Reassure me about
my personal concerns
Inspire me by doing
something new and different
Show me how I can
participate in
your brand
Reassure me about
my societal concerns
Statistical analysis of consumer groupings based on their
attitudes to brand innovation, and their risk concerns.
Source: mobile diaries, qualitative
groups and quantitative segmentation

The 4 brand behaviors
that address consumer needs around innovation:
Have a
Purpose
Inform
and Educate
Make
your Mark
Live your
Character
Reassure me about my
personal concerns
Inspire me by
doing something
new and different
Show me how I
can participate
in your brand
Reassure me about my
societal concerns
Brand
Behaviors

Inform
and Educate
inform transparently so that
you can educate consumers
and help them make choices
Brand behaviors:
• Explain your motive for innovating.
• Address concerns about the social and environmental
impacts.
• Engage and educate consumers across different
channels and platforms.
Consumer need:
I am empowered by
information. Give me all
the details and let me go
as deep as I want.
To reassure me about my
personal concerns

Have a
Purpose
operate with purpose
to show how you fit into
the bigger picture and
are an active participant
in society
Consumer need:
I believe in progress—
but not at the cost of
hurting my community or
compromising my values.
Brand behavior:
• Be authentic.
• Show that you value human interaction and have
respect for tradition and heritage.
• Add value beyond your product and service.
To reassure me about my
societal concerns

Make
your Mark
make your mark by
doing something unique
or differentiating that is
worthy of attention
Consumer need:
I like to be inspired by new
ideas—as long as they
really are new and different.
Let’s solve a problem in a
cool, creative way!
Brand behaviors:
• Show how you stand out from the crowd.
• Offer engaging content that is timely, has resonance,
and is entertaining.
• Spark peer conversations and debate on many
channels with a clear and consistent brand voice.
To inspire me by doing
something new and different

Live your
Character
live with character that is
true to your brand and has
a personality that consumers
can buy into
Consumer need:
Brands can help me
express my identity. I
want to look smart,
creative and connected.
Brand behaviors:
• Be transparent when it comes to consumer privacy
and sharing of data.
• Offer inspirational, exciting brand experiences in
which consumers can participate.
And show me how I can
participate in your brand

Brands and innovation:
A new model of marketing in action
Have a
Purpose
Inform
and Educate
Make
your Mark
Live your
Character
Statistical analysis of consumer groupings based on their
attitudes to brand innovation, and their risk concerns.
Brand
Behaviors

The Earned Brand
The Earned Brand’s story is not simply told, it is demonstrated and
experienced, and to do that, brands can’t operate with a style guide
alone.
The Earned Brand has a world view and a belief system; a purpose
and reason for being – one that defines not just the communications,
but how the brands behave online, off, and in all contexts.
An expressed set of values informs what products are made, what
language is used, how customers are treated, and ultimately the
legacy the brand leaves in the communities it serves.
Earned Brands empower conversations among peers.

Innovation and the Earned Brand
People believe
in the promise
of innovation.
Consumer
acceptance of
brand innovation
cannot be bought.
It must be earned.
While the promise
of innovation
inspires, people
first need to
be reassured.
“I rely on my
peers to
reassure me.
Because their
experience is
my evidence.”
Messaging alone
doesn’t work.
It’s about how
your brand
behaves.
1 2 3 4 5

Innovation and the
Earned Brand
Thank you.

Appendix:
The Mobile Diaries
The Earned Brand | Edelman 2015 39

Mobile diaries – methodology and platform
Timing
April – May 2015
Mobile Diaries
25 millennials, with them on their mobiles, for 2
weeks, in Brazil, U.K., India, China and the U.S.
Living with millennial
consumers to explore
their attitudes toward
brand innovation
We asked them to
check in with us every
day for 2 weeks,
to answer questions
about brands and where
they get information,
and to complete
assignments such as
“take me shopping.”

• U.K. consumers are very risk-aware—from loss
of human interactions to environmental concerns
• U.K. consumers think of themselves as rational,
not easily ‘duped’ by advertising or marketing
• Factual information (i.e. cost comparison sites)
drive many purchasing decisions
• Shopping and online communication—Chinese
consumers are never far from peer opinion
• With a fast growing apps market, consumers are
looking for services as well as products online
• Risk-aware but optimistic– issues such as food
safety and environmental issues will improve
• Family comes before everything—shaping their
attitudes and ambitions
• There is far less cynicism in India—brands are
seen as aspirational and trusted
• The in-store experience is enjoyed and linked
with status and leisure time
• Online shopping is becoming more popular and
represents a less stressful experience
• U.S. consumers are concerned about negative
impacts of technology, particularly data security
• Everyday brands were more commonly cited
rather than out-of-reach aspirational brands
U.K.
• Personal interactions are highly valued and the
impact technology has on this is a worry
• Brazilian millennials are focused more on
personal benefits than wider societal ones
• There has been a noticeable shift from in-store
shopping to online in the last 5 years
Brazil India
Consumer Culture
around the world
ChinaU.S.

Food
Food brands that take an ethical stand
or have additional health benefits align
best with millennial beliefs and goals
around the world.
The food sector is strongly linked to
mobile, with respondents capturing
their on-the-go food habits, from food
truck visits to tasting and sharing
adventurous new dishes when eating
out or cooking.
U.S. U.K. Brazil

Brazil
Mobile
Brands in the mobile sector are seen
as cutting-edge, with the most popular
brands omnipresent.
Mobile phones have an integral role in
millennial lives, capturing their day-to-
day movements and letting them keep
up to date with their peers.
U.K. China

Brazil
Travel
The travel sector is seen as reliable
and efficient.
Brands are able to satisfy millennial
needs for adventure and fun, and their
desire to have plans and be inspired.
U.K. Brazil

Wearables
Brands in the wearable sector are seen
as sophisticated, confident and
inspiring.
These brands give millennials the
opportunity to keep their goals on track
and inspire them to live healthier lives,
whether that means going to the gym
or managing personal health issues
such as diabetes.
BrazilChina U.S.

Auto
The auto sector is largely seen as bold
and aspirational—design and
technology pervades the sector.
Car brands are intrinsically linked to the
person. Millennials believe these
brands are a reflection of how they
want to be perceived.
Brazil BrazilU.K.

Millennial consumers and innovation
People believe
in the promise of
innovation…
“Innovation is a way to change your lifestyle from head
to toe. When you look at anything innovative, it will
inspire you and make you feel more energetic” Zhu,
China
“Innovation means change, progression, activism,
whether that be through small things in life, moments
that only relate to you, or even the greater community”
Dempsey, USA
“[Innovation] has made me
more confident,
independent and smart”
Jatinder, India
“technology can be
revolutionary, however …
we need traditional virtues
to preserve basic values”
Chen X, China
“The principal impact has been to make
communication possible with people who live far
away. At the same time, it has introduced that vice of
always sending messages and forgetting what is
going on around you” Luciano, Brazil
“ [Technology] makes people more independent but
[they ignore] moral values and relationship values”
Amber, India
…but not at the
cost of human
values

Where millennial consumers go for information
Consumers rely
on their peers to
inform and
reassure them…
“I don’t want to be sold
something I don’t like, I want
to take control of the
conversation, it’s about the
questions I want answered”
Dulisha, UK
“I go to sites to read about people with the same
objectives as me who had positive or negative
experiences. But I still don’t trust what I read very
much because companies could be using the service
[e.g. forums] to praise themselves” Victor, Brazil
“Before I make a final decision of an online
purchase, I will look at reviews from previous buyers
and will also have a close look at photos and videos
shared by other buyers” Liu, China
“I usually go to a Chinese website named "Li Ba
Wang", people there are a similar age [to me], we
have similar ideas, it can provide me with some
information when I want to buy something” Chen
Y, China
“I share my views through social media with my
friends and family…that gives me a little
confidence” Abbishek, India
“Sharing the shopping
experience is a must-have
part of the purchasing
process for young
consumers” Zhu,China
…because “their
experience is my
evidence”

Appendix:
The Behavioral Focus Groups

Behavioral focus groups
Timing
April – May 2015
Behavioral Focus Groups
16 millennials in New York and London
.
Using biometric testing
to see how consumers
inform themselves
about new innovations
We created 3 new
“high-risk” innovations,
used eye-tracking and
pupil-dilation tests
measured their
engagement with
different channels,
to see which were most
effective in reassuring
consumers about their
concerns.
A payment device
implanted in your palm
A capsule that takes
internal readings to adjust
the dosage
A ride-sharing service that
uses driverless cars

We created three high-risk “innovations”
AutoMed Save Well Smart Ride
A capsule that adjusts the dosage
of your medication based on
internal body readings
A mobile payment device that is
implanted under the skin of your
palm
A ride-sharing service that
uses driver-less cars
Innovation Risk Factors: Privacy Privacy, Security Privacy, Security,
Community Impact

We gave participants different ways of learning about
these new brands. Which worked best?
Advertising Social Media Blog Posts

Blogs and Twitter were more
informative, by a 4 to 1 margin
Blog
Twitter
Ad
Which of the three types of information you were given
was most useful for you to answer the questions?
Source: Generation K Behavioral Focus Groups
(16 participants)

Participants spent more time
with Twitter than with ads
Ad
Time (in seconds) spent reading each content type:
Twitter
(16 participants)
5
10
15
Ad:
95 words + 1 image
Twitter:
52 words + 3 image

Blogs and Twitter were more effective
in changing consumer attitudes
from “no way” to “ok, I would try that”
Blog
Ad
Changes of intention with respect to the product based
on reviewing information in each channel:
Blog
Twitter
Ad
(16 participants)

The human touch matters:
Regardless of channel, those who did switch from “no” to
“maybe I’d try that” focused more on their peers
Did not switch Switched
Source: Generation K Behavioral Focus Groups (16 participants)

Did not switch Switched
Source: Generation K Behavioral Focus Groups (16 participants)
The human touch:
Regardless of channel, those who did switch from “no” to
“maybe I’d try that” focused more on their peers

2015 Earned Brand Australia

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2015 Earned Brand Australia