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Volume 6, Issue 4

Digital Predictions for 2014

Innovations in Branding: Pedaling From Talking to Doing

Develop Great Creative for Your Video Ads and Maximize Viral Potential

BrandZ Top 50 Most Valuable Latin American Brands 2013

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POINTS OF VIEW

POINT OF VIEW

Measuring Long-Term Ad Effects: A Meaningfully Different Approach

At the recent Australian Effie Awards, the judges decided not to give an award in the Long-Term Effects category. Journalist Rosie Baker, who found it worrying that there wasnt any work worthy of a long-term award, wrote an opinion piece in which she said: The pressure to deliver instant results means that people are hobbled in their ability to look long term. Its difficult to look long term when the axe falls after two poor quarters. But by not looking longer term, the industry is doing itself a disservice, and it is a hard cycle to break.

Bakers observations are not dissonant with our own. Among the ads we tested during the global financial crisis, we saw an increase in the number that were aiming for short-term returns. That number is now falling, but we still encounter many advertisers who are primarily interested in DAREN POOLE understanding an ads short-term potential, even Global Brand Director, though it is widely accepted that most advertising Creative Development daren.poole@millwardbrown.com doesnt pay for itself in the short term. One of our studies found that only 14 percent of campaigns were able to do thatand our observations are not different from those of other practitioners. Theres nothing wrong with measuring the potential of advertising to deliver short-term sales. But we estimate that only about 5 percent of total brand volume results from short-term ad effects. Therefore, ad assessments based primarily on the prediction of short-term effects may not always result in the best decisions being made for the brand. As advertising and research professionals, we know much more than we did two decades ago. We know more about how brands grow and become successful. We know more about the role of advertising in this process. We need to evaluate advertising with this learning in mind. The result will be more balanced assessments of what an ad may contribute to the long-term health of a brand. IT TAKES TiME TO BUiLD A BRAND Brands are not built in a day or a week or a monthor over the course of one marketing campaign. Look around. With few exceptions, the strongest brands have been around for years, even decades. Brands are built over time. But when we build a brand, what are we really building? Our definition of a brand, which is shared by most in our industry, is the set of associations ideas, memories, and feelingsin the mind of an individual. So if advertising is going to build a brand, it needs to build associations, because it is those associations that will ultimately motivate people to buy. We know this to be true; using tracking data and structural equation modeling, we have repeatedly demonstrated the effect of advertising on key elements of brand equity, and recent modeling work done for a large B2B service company has documented the link between specific impressions created by an ad and subsequent brand revenue. We observed revenue growth that was 12 percent higher among those who endorsed the brand as being easy to work with. In this case, the payoff came in the medium term. (Our measurements were taken six months after the campaign started.) But, as Gordon Brown pointed out some 25 years ago, associations created by advertising can also have latent value when they enhance the brand in a consumers mind long before he or she has a reason to buy it. Gordon observed that many TV commercials, when viewed, would not have an immediate effect on peoples intent to buy the brand. The one time nobody wants to take decisions about brands is while watching TV, he said. But later, when a consumer might be shopping and in the mood to try something different, the impressions and associations established by an advertisement could come to the fore and influence brand choice. This potential long-term advertising effect has not gotten enough attention in ad evaluation up until now. MEASURiNG THE BRAND-BUiLDiNG POTENTiAL OF ADVERTiSiNG Today, Millward Brown understands brands and brand associations in the context of what we call the Meaningfully Different Framework, which is summarized in Figure 1. The foundation for this framework is, of course, the idea that impressions and associations accrue to brands over time. At the heart of the framework is our observation that brands people consider to be meaningful, different, and salient are able to command a greater volume share or charge a premium price, or both.
Figure 1: Meaningfully Different Framework

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Many things besides advertising contribute to the formation of brand associations. Experience with the brand is particularly important, as is word of mouth. But advertising is a critical factor, not only for forming associations for new brands, but also for strengthening and reinforcing existing associations, and for keeping established brands salient. Thus it is essential to understand this aspect of an ads performance. We now have questions in our Link ad evaluation system that predict the ability of an ad to build meaningful and different brand associations. The responses to these questions are summarized in a new output called the Power Contribution, which describes an ads potential to influence brand equity. To create the Power Contribution, the scores on meaning and difference are combined and multiplied by the brands predicted Awareness Index (AI), which is a measure of branded memorability. The AI is used as a multiplier in recognition of the fact that no matter how well an ad conveys that a brand is meaningful and different, it wont achieve long-term effects unless it is noticed and remembered. However, the Power Contribution is only a summary measure that indicates an ads potential to build equity. It doesnt tell advertisers how that equity will be builtthat is, what specific associations will work to establish a brand as meaningful and different. While a message like removes even the toughest stains at 30C will drive short-term sales among consumers who find it relevant, the specific message is not what most consumers will take away from the ad. In a research situation, respondents may pay close attention and recall communication points verbatim, but when they watch the ads in a natural TV-viewing setting, that is much less likely to happen. It is the gist of the ad that is likely to leave an imprint; that is, they will remember hearing something about stain-removing power, or effectiveness at low temperatures. It is important for us to understand what this advertising imprint is likely to be. We do this by showing people an ad and then, after theyve viewed it, asking them for words that describe the brand. We summarize the responses in a word cloud, as shown in Figure 2, which shows that the dominant associations for this ad were modern, stylish, sleek, expensive, and quality.
Figure 2: Advertising Imprint

THE SHORT TERM: ITS NOT ALL AbOUT PERSUASiON Advertising needs to be evaluated in relation to what it can accomplish for a brand. Sometimes, for some brands, short-term persuasion is the objective, and a measurement of persuasion is a completely appropriate action standard. Ads that feature newsof a new brand, a new variant, a new positioning, or a promotionare capable of driving persuasion and are likely to be effective if the news is differentiating, credible, and relevant to consumer needs. However, news, even if you have it, isnt news for long. Therefore, the effects of persuasion are often short-lived and do not always contribute to longerterm brand growth. And many brands, particularly larger, more established ones, rarely have real news to communicate. But large established brands can and do succeed in generating short-term sales uplifts. They do this by creating highly engaging advertising that refreshes and renews existing brand associations. When this happens, the effect is reflected not in the persuasion score but in the Awareness Index prediction. We have found the Awareness Index to be a common factor in both short-term and long-term advertising success, thus confirming that creativity is the common driver of both. Persuasion is a helpful measure when ads contain real news, but because that occurs relatively rarely, we are encouraging the use of the Short-Term Sales Likelihood (STSL) as a more appropriate measure of short-term potential. Derived from the Awareness Index prediction and the persuasion score, and more discriminating than either one, the STSL represents the probability of a short-term sales uplift. It takes brand size into account, giving relatively more weight to the AI for larger and more established brands. Thus it ensures that persuasion isnt overemphasized when it is not highly relevant. MEASURE WHAT MATTERS It will always be important to measure an ads short-term potential as well as its short-term results. Ads that dont have some immediate impact are unlikely to be successful in the long term. However, its important to be clear about what short-term success can be expected and how it can best be measured; persuasion may be a relatively unimportant metric in many situations. While some form of short-term success is necessary, it is rarely sufficient. Short-term growth isnt a guarantee of long-term success. Therefore, it is never appropriate to look only at the short term. Brands are built over the long term, and so for most ads, the ability to creatively frame meaningful and different associations for the brand is the key to both short- and longterm success.

POINT OF VIEW

Innovations in Branding: Pedaling From Talking to Doing

This is no time for branding as usual. Consumers have developed immunity to traditional marketing tacticsthey fast-forward through TV commercials, block online ads, and overlook outdoor displays as they attend to their smartphones. A brand whose basic marketing strategy relies solely on conventional methods is unlikely to survive, let alone thrive, in todays crowded and competitive categories.

And so we are observing a tectonic shift in marketing, as forward-thinking brands are opting to engage with consumers in new and unexpected ways. Instead of relying on traditional methods to tell people about themselves, these brands are finding ways to insert themselves directly into OScAr YUAN peoples daily lives. They are offering solutions Vice President, to problems, even problems that are beyond the Millward Brown Optimor oscar.yuan@millwardbrown.com purview of their product categories. By doing thisby participating in peoples lives without attempting to sell them productsbrands can sidestep that naturally skeptical response: So reallywhats so special about your brand? Instead, they gain an opportunity to connect with consumers whose defenses have been lowered by the brands friendly and helpful overtures. CITI RIDES TO THE REScUE In New York City, known for its crowded subways, surly cab drivers, and pushy pedestrians, getting around town is a problem, and Citibank has championed a new solution. The multibillion-dollar financial giant (known derisively by some New Yorkers as Sh*tty Bank) has shelled out $41 million to sponsor the Citi Bike program. The new bike-sharing system, launched in May 2013, has revolutionized transportation for millions of New York City commuters. While not the first program of its kind, Citi Bike is currently the largest bikesharing program in the United States. For a low daily rate or an annual $95 membership fee, users can unlock a bike, ride to their destination, and return the bike to any docking station. In creating this service, Citi has demonstrated that their concern for their customers goes beyond meeting their banking needs. They are effectively telling people, We understand that getting around the city can be tough. Efficiency, convenience and environmental friendliness are all important to us too, and we are doing something about it. Since its May launch, New Yorkers have traveled more than 5.5 million miles on Citi-branded bikes, and in an informal New York Magazine poll, 40 percent of Citi Bike users rated the program a 5, meaning the world will never be the same. Already, consumers feelings toward Citi have begun to shift. In our research, one Citi Bike user who has ridden more than 100 times told us, I have never paid much attention to Citis advertising, and a commercial certainly would not make me change my bank. But now I would definitely look at them as a possibility in order to support them back for what they have done to change my life. OTHEr BrANDS ArE JUMPING ON BOArD Citi isnt the only brand finding innovative ways to help. Samsung is also leading the chargeliterallyby alleviating another consumer pain point: the flashing one-bar battery signal that indicates there are only a few minutes left on a phone, tablet, or laptop. To help people facing this anxiety-inducing moment, Samsung has outfitted 13 major airports, several college campuses, the Mall of America, and the Las Vegas Convention Center with more than 500 free Samsung-branded universal charging stations. Technology blogging communitiesthe same forums that offer purchase advicehave applauded Samsung for this action. Engadget praised Samsung for giving a nod to the little guy, a sentiment likely shared by many consumers. Samsungs initiative is rooted in a deep understanding of the needs and values of their customers. Travelers rely on their phones every day to stay connected to work and their family or friends, said Dale Sohn, president of Samsung Mobile. The redesigned mobile phone charging stations ensure they stay connected on the road. Samsungs sensitivity to peoples needs is likely to engender a warm regard for the brand that will catalyze future consideration. Even marketers in categories as basic as toilet paper are finding ways to participate in peoples lives. In 2009, the Procter & Gamble brand Charmin launched the Sit or Squat smartphone application to help people find the nearest clean public restrooms, mapping them out and displaying usergenerated reviews. Unsanitary bathrooms are designated as squats, while more acceptable ones are designated as sits. Since the launch of Sit or Squat, Charmin has been flushed with positive buzz. People who ignore ads featuring fluffy dancing bears seem to notice Charmins innovative effort; it has been mentioned on thousands of blogs and has garnered over 200 million total media impressions. One grateful individual told us: Sit or Squat is one of my favorite go-to apps. Clean bathroom options can be scarce, and I love that Charmin has really acted on its mission rather than just telling people how it can improve their lives. DOVES BEAUTIFUL IMPAcT Citi, Samsung, and Charmin have all provided people with concrete solutions to logistical problems, but brands can also participate in peoples lives by offering less tangible forms of support. They can build and strengthen consumer relationships by demonstrating that they understand peoples internal conflicts and tensions. For example, for almost a decade now, Doves Campaign for Real Beauty has been addressing the lack of confidence felt by most women in relation to their own attractiveness. The Real Beauty Sketches video, released this April as part of the campaign, exposes the harsh and unforgiving judgments women make about their own looks. The film records a forensic sketch artist drawing two portraits of the same womanone based on a description from the subject herself, the other from a person who met the woman earlier that morning. Invariably, the portrait produced from the latter description is much more flattering. The video resonated deeply with consumers; according to Dove, it became the most watched video ad of all time just one month after its release. This video, along with other elements of the Campaign for Real Beauty, is not only impacting women and girls around the world, but may also be inspiring other companies and brands to follow Doves lead. For example, the diet company Jenny Craig recently made a widely publicized decision to drop celebrity spokespeople in their marketing. Whether you are creating a tangible service such as a bike-sharing system or helping people feel a little better about themselves, the principle is still the same. Brands need to step

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Brands can also strengthen consumer relationships by addressing peoples internal conflicts and tensions.

Watch the Dove Real Beauty Sketches commerical (Requires internet connection)

up and make a true positive impact on consumers lives. LEArN TO ACT Marketers should not be dissuaded by thinking that all the winning ideas are taken. There is an ocean of unmet needs out there. Brands can provide creative solutions to these problems by transforming their marketing efforts from talking to doing. If youre considering such a transformation for your brand, think of three things, captured in the acronym ACT: Assess peoples needs, Craft an innovative solution, and Test for credibility. Assess Peoples Needs First, assess peoples needs and desires. Think not only about your product or category, but also about peoples lives in general. Research what they care about and find solutions to problems that are not being addressed. Citi understood consumers needs for convenience and efficiency; Samsung understood that consumers feel empowered when they can stay connected. These brands recognize that any successful marketing initiative must be built on a foundation of deep consumer understanding. Craft an Innovative Solution The next step is to craft solutions that address the needs you identified. Brainstorm how you can best serve consumers and improve their lives, even in ways outside of your traditional realm. Citi aptly identified sponsoring a bike share as a way to give consumers the ease and efficiency they wanted. These initiatives can and should transcend your product category. Charmin expanded the notion of its business from being a provider of toilet paper to being a provider of comfort and security, which both their product and the Sit or Squat app exist to provide. Test for Credibility An initiative that lies outside of a brands product category still needs to bolster and support the attributes the brand wants to convey within its category context. Therefore, you must give your solution a credibility test. Ask yourself: Are we a reliable source to deliver this solution to consumers? Are we fit to provide this offering, or does it contradict with other aspects of our positioning? Will people be able to make a mental connection between this initiative and our brand? DONT JUST TALKDO SOMETHING We all know the old clich Actions speak louder than words. While traditionally applied to people, this saying is increasingly being taken to heart by brands. Conventional communications may help improve brand awareness and drive certain associations, but when people are making purchase decisions, a brand that is part of their lives is more likely to get into their consideration sets. By thinking more broadlybeyond their products and associated benefitsbrands can take on more active and appreciated roles in the lives of consumers, thereby positioning themselves favorably when purchase decisions are being made. The challenge going forward, of course, is measuring and valuing these initiatives. Citi Bike was only launched last May, so Citi acknowledges that the exact ROI of the program has yet to be understood in terms of deposits, account openings, or credit card spend. However, if consumer buzz and sentiment are any indication, positive results are sure to follow. For Citi, though, the bicycles are more than just a new marketing initiative. They have set the company apart as an innovative, forward-thinking marketer that understands and participates in the lives of its consumers. Brand builders, let this be your call to action. How will you start moving from communicating to demonstrating and participating?

POINT OF VIEW

Dare to Be Different
Being different is scary. In marketing, trying something different is really scary. Nobody wants to be the marketer that messes up a multimillion-dollar brand. Its easier to play it safe, relying on what has worked before or for others. That must be why Ive often heard from clients that there is a certain way to advertise in their categoryfor example, TV ads for mens razors must start with a 10-second story, continue with a 15-second product demo, and end with a 5-second joke. This is how we must advertise in order to succeed, they say.

Senior Business Analyst, Millward Brown

ALEX HERNANdEZ-BRUN

But copying from a template often leads to mediocrity. In todays world, its ads that are different that stand out and really capture attention, and its ads that capture attention that have a chance to be remembered, to convey brand impressions, and to deliver messages. Therefore, ads that are different are most likely to build brands.

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alex.hernandez-brun@millwardbrown.com

DIFFERENCE MAKES A DIFFERENCE When the Dos Equis Most Interesting Man campaign in the United States launched in 2006, most beer ads featured attractive women being won over by feckless young men (with the help of beer) or relied on sophomoric humor. Often they included both. Instead of trying to mimic the success of category leaders, Dos Equis launched a campaign built around the exploits of the rugged yet sophisticated Most Interesting Man in the World, an aspirational figure for young beer drinkers who embodied the phrase women want to be with him, men want to be like him. Replacing the traditional frat boy jokes with over-the-top but not quite unbelievable snapshots of the most interesting mans life, such as the grainy black-and-white footage of him arm wrestling Fidel Castro, the ads were unlike anything else in the beer category. They captured viewers attention and made them remember the brand. Sales of Dos Equis doubled in the four years following the launch, and the campaign has since won numerous awards, including a 2009 Gold Effie and a 2010 Bronze Cannes Lion. U by Kotex, a feminine care brand launched in the United States in 2010, has also leveraged different advertising to great success. Advertising in this category has traditionally relied on euphemistic images of young women riding horses and performing gymnastics routines; the reality of menstruation is not openly discussed. In its first U.S. spot, U by Kotex parodied these ads in a young womans description of how her period makes her feel. It makes me feel really pure I like to twirl, maybe in slow motion, and I do it in my white spandex. The campaign, which targeted women aged 14 to 22, then proceeded to talk frankly about menstrual cycles and feminine care products. The 2013 U by Kotex campaign, called Generation Know, pushes boundaries even further, debunking myths, speaking matter-of-factly about menstruation, and addressing questions many young women have. As a result of this straightforward, plain-speaking approach, the brand has claimed a sizeable 7 percent share of the $2.6 billion feminine care category after only three years. Difference Is Involving Looking beyond these two examples, we observe that in the United States, ads that are seen as different from other advertising have significantly higher levels of involvement. Thus they have a stronger ability to get noticed by consumers. But this isnt just the case in the United States; its something we see across the globe. As Table 1 shows for countries around the world, involvement is consistently stronger for ads that are different. People pay attention to the unexpected.

Table 1 Ads That Are Different Are More Involving

Involvement Scores, Indexed on Average Level of Difference*

Bottom Tertile

Top Tertile

Brazil

China

France

Russia

Germany

United Kingdom

United States

78 85 73

82

96

93

88

104

109

121

122

124

126

150

Source: Millward Brown, 2013 *Difference tertiles defined by endorsement of top box of Difference scale: Its very different from other ads in CATEGORY.

Difference Creates Enjoyment In the context of TV, a medium we look to for entertainment, offering people something enjoyable is a good way to get their attention. In general, the more enjoyable an ad is, the more likely it is to be remembered. And we have found that ads that are different also tend to be more enjoyable to watch; what makes them different often enhances them in other ways as well. They may be laugh-out-loud funny, such as the ads in the Old Spice The Man Your Man Could Smell Like campaign, which featured non sequiturs and visual humor. They may be edgy, like Kmarts Ship My Pants TV spot from early 2013, which played up the sounds-like pun of Ship My Pants and garnered 13 million views on YouTube in its first week. Or they may be gripping, like the famed Guinness Surfer ad from the UK, in which the drama of surfers riding an enormous wave is enhanced by black-and-white footage, a pulsing drumbeat, and images of mythical horses rising out of the water. (Incidentally, the qualities of ads that are differentbeing laugh-out-loud funny, edgy, or grippingare the same qualities we observe in ads that go viral.) Difference Builds Memorability and Effectiveness Beyond being more involving and more enjoyable to watch, ads that are different can offer another important advantage. The elements that make them different can become strong brand cues. In the case of Dos Equis, phrases like he can speak Russian in French and his blood smells like cologne are readily associated with the brand. We have found that ads that combine strong branding, enjoyability, and involvement are best at generating TV ad awareness for their brands. We measure this using our Awareness Index (AI). Figure 1 shows the predicted AIs for 4926 U.S. ads in the Low, Medium, and High difference groups.

Figure 1 Awareness Index (Predicted) Increases with Difference (4,926 U.S. Ads) 4 5

Low

Medium

High

Difference Tertiles (defined as on Table 1)

Established Brands Can Also Be Different New or little-known brands have an advantage when it comes to creating different advertising as they have little to lose and few existing consumers to alienate. But that doesnt mean its impossible for established brands to create advertising thats different or that they shouldnt aim to do so. A great example of an established brand leveraging different advertising is the Pinky ad from Australia for the New South Wales Roads and Traffic Authority (RTA). Safe-driving advertising across the world has traditionally used scare tactics to frighten consumers into following traffic laws. But in their 2007 Pinky commercial, Australias RTA did something different. The ad showed young male drivers, full of swagger, speeding as they tried to show off to women walking by. Unimpressed, the women wagged their pinkies to suggest that the drivers were overcompensating for a lack of manhood. As a former young male driver full of swagger, I know thats a message I would listen to! More importantly, its a message that stood out to drivers because it was so different from what they expected to hear. The ad, behind a $2 million budget, is credited with saving $264 million in accident-related costs and the lives of up to 56 people. THE DIFFERENCE mUST FIT THE bRANd Its not enough, however, to just have advertising thats different. In 2004, the U.S. sandwich restaurant Quiznos started a TV campaign featuring the Spongmonkeys, a pair of creepy, google-eyed hamster mutants singing about Quiznos toasted subs. That was certainly different, but it wasnt appealing, and it did nothing to make consumers want to go to Quiznos. The campaign was pulled within the year amidst declining sales and negative reactions from customers and franchisees alike. Different for the sake of being different doesnt work. Its ads that are different yet still fit with their brandsads that are appropriately differentthat are much more impactful in market. Table 2 shows the predicted Awareness Index and Persuasion scores for different ads that have a low, medium, or high degree of fit with their brands.

Table 2 AI (Predicted) and Persuasion Scores for Different Ads, According to Degree of Fit*
4,926 U.S. Ads

Low AI Persuasion
Source: Millward Brown, 2013

Degree of Fit with Brand

Medium 5 19 3 7 24

High

15

*Fit tertiles defined by endorsement of top box of Brand Fit scale: How well does the ad fit in with how you think of BRAND?

One brand that has successfully leveraged appropriately different advertising time and time again is Apple. All of Apples advertising conveys the message that the advertised product will help you do the things you love to doand this, in fact, is the meaningful difference that makes Apple so successful. While competitive advertising focuses on technology, which is constantly changing, Apple focuses on delivering an outstanding brand experience. As a result, the brands iPod campaign from 2003 fits just as well with the brand as their 2013 advertising for the iPhone 5C. BREAK THE MOLd WITH CARE Breaking the mold isnt something that should be considered lightly or done haphazardly, least of all when it comes to multimillion-dollar brands. First, consider the strength of your brand and current advertising. Strong category leaders with successful campaigns shouldnt focus on creating something different if what theyre doing is already working. But they do need to keep an eye on what competitors are doing and be wary of and prepared for how to deal with imitation. Second, dont lose sight of what your brand stands for. Unless youre trying to completely reinvent your brand, make sure you build on its legacy and its meaningful difference. Make sure you also understand your market and the type of advertising you can get away with without offending consumers. Third, understand how consumers view advertising for your category. Maybe a product demo is required, but the way you present that demo can be different. Also, keep in mind that what you think of as a big change may be too subtle for consumers to notice; dont be afraid to be bold. Lastly, give your creative team some freedom. Dont put narrow boundaries on what they can and cant do. Make sure they understand your brands heritage and consumers perceptions of your category and then turn them loose. Copy testing will help you understand if the bold efforts of your creative team are working as intended or if the risks they have taken are reckless ones. As weve seen, Link will show the positive impact of differencebut it will also act as an early warning system if that difference is inappropriate. Many advertisers develop effective formulas that they depend on for years. But often, copying someone elses template hinders as much as it helps. So when your goal is to create advertising that will really get noticed, dare to break the mold. Dare to throw out every convention you know about advertising in your category. Dare to be different.

PUBLISHED ARTICLES

Ninety-Five Per Cent Wrong

RESEARCHING THE INSTANT MEANING OF BRANDS YIELDS A DIFFERENT PICTURE OF CONSUMER CHOICE
By Graham Page, Executive Vice-President, Millward Brown

t has become a mantra that cognitive science is challenging the assumptions of our industry. It is, but not necessarily in the way people assume.

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The typical story is that breakthroughs in behavioural economics, neuroscience and the study of heuristics have debunked the idea of the rational consumer. These suggest that we think less than we believe we do and only engage our more effortful (slow) processes when necessary. An often-cited fact is that 95 per cent of what the brain does is unconscious, implying that 95 per cent of brand decision-making is unconscious. There are two problems with this. Firstly, few in the research or marketing industry have ever believed in a dispassionate consumer. In addition, the idea that 95 per cent of brand decision-making is unconscious is every bit as wrong as the idea of an objective consumer. For a start, the gure is a hypothetical construct. It is impossible to nd scientic papers that evidence this number and while it is true that a huge amount of the brains energy consumption is spent on processes below our awareness, much of that is involved in biological regulation and low-level sensory processing which is not the same as decision-making. Furthermore, if the 95 per cent gure were true, then when we measure brands using research tools that tap automatic, nonconscious processes directly, we would see a seething mass of associations and responses. We now have such tools, and Millward Brown has deployed them on hundreds of projects. What they show is that many brands evoke modest emotional responses (typically neutral or mildly positive) and just a handful of ideas or responses, unless people engage in effortful thought. Similarly, when automatic responses to brands are modelled against behaviour, the degree of inuence is way below the 95 per cent wed expect if that proportion of decision-making were driven by unconscious processes. In the case of budget airlines, intuitive reactions to carriers were shown to have very little relationship with behaviour, as people were more willing to override their instinctive responses for the sake of a good deal. For a low-risk choice like social media usage, intuitive responses to brands such as Twitter did show a signicant relationship with behaviour, but only to the same degree as explicit attitudes. These ndings are consistent with the cognitive science that sparked the whole discussion. The core of the science on fast and slow thinking is that both contribute to decision-making, with fast processes such as instinctive emotional reactions framing the slower ones. Where possible we will use our fast processes for decisionmaking, but our slower processes can and do override them when we are motivated to do so or when our instinctive responses are vague or muted. This is the nub of the challenge for brands, because the evidence is that many brands lack the instant meaning that would allow consumers to make quick, effortless decisions that they are wired to favour. This makes them vulnerable to competitors that do create an instantly relevant and positive meaning, and a key objective for brand managers is to create not just rich brand equity, but equity that is immediately accessible. The fact that many brands lack a deep meaning for consumers also has implications for research. There is a tacit assumption in the industry evidenced by ideas such as the iceberg metaphor, that its there to dig beneath the surface to reveal the rich, subconscious world of brands. A better metaphor is that of construction. Most research methods encourage people to reect on their faint brand associations and to see what they can build from them, there and then. Do those ideas mean the brand has a particular personality, or will work better on a particular dimension? This perspective has important implications for research: 1. We need to remember that even if respondents are trying to focus on functional or factual information, they cannot help but be swayed by their automatic reactions. Many research questions encourage more effortful thought than people will commit in reality when making brand decisions. This is still valuable if people dont register the intended brand meaning or advertising message when they think about it, then they certainly wont in the real world. Similarly, brand values, personalities, archetypes and so on are valuable aspirations for a business to rally around in marketing a brand, so understanding if people can construct those ideas for the brand when they think about it has value in measuring progress towards those goals. 2. We need to focus more on gist. It is the gist of a brand that counts for fast decisions. Research questions are likely to be much more nuanced than the associations consumers have in their minds, so looking across metrics at the gist of the answers will give a more meaningful insight than worrying about whether people differentiated between minutiae like tastes delicious and has a satisfying taste. Millward Brown has introduced questions that focus on brand and advertising gist rather than detail for just this reason. 3. We need to complement established measures with approaches that isolate the instant meaning of brands and campaigns, so we can properly understand the nature and impact of brands automatic associations. Fortunately the industry is now adopting such measures extensively, and Millward Browns own work routinely includes: Measures of the instinctive emotional responses that will frame real-world decisions. Reaction time-based measures of intuitive associations, which enable us to understand whether brands have the real-world meaning their owners intend. Automated facial coding of viewers responses to advertising (used on more than 2,500 ads by Millward Brown at the time of writing). Integrating reective thought and measures of instant meaning is key. By including both, we can empirically determine the importance of each. In the Twitter example, measuring fast responses enabled us to improve our prediction of behaviour by 50 per cent. With facial coding, we can improve the ability of Link survey measures to predict ad sales effectiveness by up to 30 per cent. Marketers should strive to give brands instant meaning, and as brand and ad researchers, we should be clearer about our established metrics, which often measure what brands might be if people think about them. By taking a more measured view of the science and integrating the tools to isolate fast thinking directly, we can not only understand the true inuence of fast thinking, but provide more realistic brand guidance. Thats something to build on.

First published in the October, 2013 edition of Marketing Week, www.marketingweek.com

Develop Great Creative for Your Video Ads and Maximize Viral Potential
By Ann Green, Senior Partner, Client Solutions and Innovation, Millward Brown

he strength of creative is an important factor that will inuence whether an ad will go viral. To identify the creative criteria for viral success, Millward Brown recently conducted a research study on the power of viral video ads. We identied 500 ads copy tested, across seven countries, using our Link solution. All ads were also available on YouTube. We used YouTubes publicly available viewing information as our measure of viral success. To create a views per week measure, the number of views (aggregated across all posted versions of an ad) was divided by the number of weeks the ad had been posted. This measure of viral spread ensured a fair comparison regardless of how long the ads had been on YouTube. To help predict in-market viral viewing, we took measures from Millward Browns Link copy testing solutions to build a Creative Viral Potential score. So what creative factors drive viral viewing? Millward Brown identied the following measures that related to views per week: Enjoyment: The industry can consistently demonstrate the importance of liking and/or enjoyment to an ads performance. This also holds true when it comes to whether or not an ad is likely to go viral. Active Involvement: Viral ads are not those that simply wash over the viewer - they tend to have qualities that make the viewer lean in and take an active role. Distinctiveness: Being distinctive is very important. To succeed virally, ads need to stand out from all other ads, not just from those of direct competitors. Buzz: The quality of an ad makes someone want to send the ad to someone else. The act of passing an ad on contains a consequential element personal endorsement. In sending a viral ad along, the sender is saying that he or she thinks its good. Sending a bad viral ad is rather like telling a joke that falls at embarrassing for all involved. Millward Browns research also identied four elements of strong viral ads, summarized below, using the acronym LEGS. Laugh out loud funny: Four of the top ve videos we researched overindexed in terms of being funny. We learned the sender of a viral ad often needs to be sure the recipient will laugh when they see it. The likelihood of this is gauged against the senders own reaction to the video. Generating a wry smile is not sufcient for a video to be sent on. Edgy: Best described as the type of video most people wouldnt show to their mother, these lms operate on the edge of social acceptability. They might be viewed by some as offensive, shocking, sick, or unpleasant. Importantly however, when they combine this edginess with humor, the shock element is felt overall to be funny as opposed to gratuitous. Gripping: Finding a video to be gripping, engaging or involving isnt the same as enjoying the viewing experience. Not many would claim to enjoy looking at a car crash, but the majority of people rubberneck when they pass an accident site. While very gripping videos are not necessarily particularly enjoyable; very passive videos can be extremely enjoyable. Importantly, both positive and negative emotions can drive a consumer to be gripped by a video. The research shows there is no guarantee a video that is very gripping will be forwarded on - but a video that isnt gripping is unlikely to be passed along. Sexual content: We chose not to include any particularly sexually focused lms in the research due to common decency and industry codes of conduct. However, that is not to say we underestimate the importance of sexual content as a motivator for forwarding a video particularly among young males. The pursuit of an edgy or sexually focused viral video should not be detrimental to a brands character or proposition. An ill-advised lm can damage brand equity, if it goes viral, because the brand has no control over its longevity in the public eye. A semi-pornographic lm for many brands would detract from, rather than enhance, the brand promise and position. Working with leading marketers and agencies on Creative Development, Millward Brown is often asked to help predict the extent to which their ad will go viral. In the study, Millward Brown set out to explore the main drivers of viral viewing, and what makes people want to share? In reality, the chance of achieving a major viral success is rather low. There are many factors that determine an ads viral impact. Heres what we learned. Paid media in general has a role in viral success. YouTube videos with paid advertising achieve far greater views than videos that are not supported by paid placements. The ad itself may have appeared on TV, at cinemas or in paid online video slots. Other media such as posters or print can play a supporting role as well. PR can have a major impact, rst in seeing the ad appropriately among opinion formers, and later in fanning the ames to ensure wider awareness. Ads on YouTubes home page generate 86% of all views increasing expected views by over 600%. Holistic campaigns are more likely to achieve viral success. Executions that are linked by a common theme or device seem to benet from being part of a campaign. Make your video easy to find. The name attached to an ad will contribute to it being easy or difcult to nd. Advertisers can only control the name of the ofcial versions of their videos, but they should consider the implications of how they do this. An intriguing name may help drive views among random surfers, but a more obvious name may help increase views among searchers. YouTube promotion ensures weaker ads achieve views - only the very best start to catch up via natural viral. There is a growing trend for brand managers to suggest or request a viral campaign because everyone else is doing it. Before embarking on a viral video project, marketers need to ask the question: Would the lm work on TV or in the cinema? If the answer is no, the ad wont t any better when its watched on a PC or mobile device. Media choice should always be driven by the communication objective, and not the other way around. Finally it should be acknowledged that, despite the analysis presented above, there is still an element of luck involved. Some campaigns will inspire mash-ups, spoof responses, re-edits and other online chatter. At this point, you start to lose control of the campaign, and things may take unexpected twists and turns, but with luck, you could benet from a massive viral surge in brand interest.

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First published October, 2013 www.millwardbrown.com

From Tartan to Tablets: Apple Stores Hire Further Blurs Lines Between Fashion, Tech
By Oscar Yuan, Vice President, Millward Brown Optimor

rom Google Glass to connected watches, to clothing that monitors your activity levels, theres been a lot of conversation about the merging worlds of fashion and technology. This week, Apple added to this dialog when they named Angela Ahrendts to senior vice president of retail and online stores. Coming from a remarkably successful tenure as the CEO of Burberry, Ahrendts brings valuable luxury fashion brand perspective and experience to the challenges faced by Apple. Under Ahrendts seven year reign, sales at Burberry more than tripled and share price quadrupled. Her adept use of social media and digital marketing transformed Burberry into the most connected fashion brand in the world. Ahrendts also drove great success for Burberry in China, an achievement that so far as eluded Apple. Outside of simply growing sales, however, the decision to bring Ahrendts aboard, combined with Apples earlier hire of Paul Deneve of Yves Saint Laurent and Enrique Atienza, formerly of Levis, could signal an intent to grow the Apple brand in a way more similar to the great houses of fashion than to the great houses of Silicon Valley model shifting consumer choices from rational, technical specications to what the fashion houses understand: the most intense relationships are built on passion and emotion lust, even not rational benets. In an increasingly competitive and imitative market, with its retail and product experience being emulated, and at lower price points, Apple is seeking to differentiate from cheaper, copycat competitors, and expand accessibility to a wider variety of markets all while maintaining a premium perception. Ahrendts is familiar with reenergizing brands and enhancing their premium potential. While at Burberry, she turned around perceptions of the brands classic plaid from tired and tacky to a chic and luxurious fashion statement, through more selective use of the pattern and a carefully cultivated in-store experience. But Ahrendts new role is hardly the rst move Apple has made in blurring the lines between fashion and technology. Apple has already led the way with projects like the Nike Fuelband, which merged Apples smart technology with a wearable and functional workout tool. Other brands are following suit. From the funky brand identity of Beats headphones to new, nearly science-ction innovations in fabric and design that cross fashion runways around the world, what we wear in our everyday lives will increasingly be combined with the technology we use. Certainly, if anyone is going be the vanguard of changing our daily interactions with technology, its Apple. Barely a month ago, in fact, Apple partnered with Burberry to launch the iPhone 5s at a Burberry fashion show, and all photos were taken with the new iSight camera. Christopher Bailey, Burberrys Chief Creative Ofcer and second in command to Ahrendts, commented, This collaboration celebrates our relationship and shared foundation in design and craftsmanship. We have a mutual passion for creating beautiful products and unlocking emotive experience through technology, which has made it intensely exciting to explore the capabilities of the iPhone 5sWere inspired by what this could mean for the future as we continue to explore the merging of physical and digital experiences. Ahrendts noted the similarities between Apple and Burberry earlier, when, in a 2010 prole in The Wall Street Journal Magazine she remarked, If I look to any company as a model, its Apple. Theyre a brilliant design company working to create a lifestyle, and thats the way I see [Burberry]. And while many Silicon Valley analysts are surprised by Ahrendts appointment, from a brand perspective, it is clear that in her new position the apple will not have fallen far from the tree.

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First published in the October 18, 2013 edition of Wired, www.wired.com

Five Tips to Help Take Advantage of the Olympic Effect

Young people believe the Olympics added a new dimension of friendliness, opportunity, hope and sense of community in London, writes Firefly Millward Brown So how can marketers and brand managers capitalise on this newfound sense of optimism, and take advantage of the socalled Olympic effect among young people today?

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1.POSItIVE mENtAL AttItUDE Young people are more ambitious than ever, and they understand more than ever that success in their careers and life comes only from hard work, commitment and a positive attitude in todays highly competitive global market. This attitude was highlighted at the Olympics last year, and made a lasting impression. There is potential for this new positive stance to be used as a big idea by marketers, according toAnne Collins, research director at Firey Millward Brown: Marketers need to capitalise on these emerging post-recession values. Theres a palpable hunger to achieve amongst this generation that was never as strident with Generation Y. 2.OLD-fASHIONED VALUES In this complex digital world, there is also a longing for oldfashioned values. Young people appreciate the sociability, closeness, mutual respect and belonging highlighted during the Olympics, and desire more of the physical in their lives today. Marketers can benet from having a strong focus on the experiential, as part of their multimedia-campaigns. Brands can do this in different ways Coca Colas Share A Coke campaign this summer is a brilliant example of bringing young people together, and giving them a way to show love, care and respect for family and friends, says Collins. It has been a tremendously successful campaign which supports the importance placed on old-fashioned values and interactions by young people. 3.THE PHYSICAL VS. tHE DIGItAL Emphasis on the physical place rather than the digital space is becoming more important for young people. The report suggests that there is a strong affection for, and pride, in London and its iconic landmarks. Individual areas have also taken on their own unique sense of style and identity, like energetic Brixton and the hipster vibe of East London. Thisrepresents an opportunity for brands in terms of alignment with places or physical areas. One example of this is O2. Following in the footsteps of Apple, O2 has recently created physical workshop spaces in-store where young people can meet, learn or lounge; these forward-thinking technology brands who are visionaries for the digital future also know the importance of keeping it real for the young adults, saysCollins. 4.A mORE LIbERAL APPROACH Young people are far more liberal than their parents generation. They embrace diversity, and understand they can be enriched by learning about and experiencing different cultures, different nationalities, people and places. Their liberal stance was highlighted at the time of the Olympics last year where they enjoyed the coming together of different people and nationalities to support teams and celebrate sporting achievement. In the build-up to the World Cup in 2014 the global unity and connections young people desire represents a signicant opportunity for marketers who target young people. 5.FRAmE Of REfERENCE Young peoples frames of reference have been extended. They are born into globalisation, and personal ambition extends beyond London and the UK. They want success at work, and to gain a diverse range of life experiences along the way. Brands must get to know young people better, and those that best reect their needs and aspirations will reap rewards in the future. Adidas has managed to do this well, capitalising on its sponsorship of the Olympics; its collaboration with designer of the moment Stella McCartney, choosing young, rising, sporting personalities as ambassadors, and various initiatives aimed at young people with passion at the core reaped great results. Adidas raised its game, its global credentials and cool factor at the same time.

First published in the Novemeber 13, 2013 edition of Research-Live, www.research-live.com

KNOWLEDGE POINTS

KNOWLEDGE POINT

What Are the Benefits of Celebrity-Based Campaigns?

CELEBRITIES ARE USED IN ADVERTISING AROUND THE WORLD. THE RIGHT CELEBRITY, USED IN THE RIGHT WAY, CAN UNDOUBTEDLY BE A POWERFUL BRAND ASSET. BUT USING A CELEBRITY IS NO GUARANTEE OF EFFECTIVE ADVERTISING; OVERALL, THERES VERY LITTLE DIFFERENCE BETWEEN THE PERFORMANCE OF ADS WITH CELEBRITIES VERSUS THOSE WITHOUT. AND THERE ARE PITFALLS TO USING CELEBRITIES. TO GAUGE WHETHER A CELEBRITY IS RIGHT FOR YOUR BRAND, YOU NEED TO ESTABLISH WHETHER THEY ARE KNOWN, WHETHER THEY ARE LIKED, AND WHAT THEY STAND FOR, AMONG YOUR TARGET AUDIENCE.
WHO USES CELEBRITIES?

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The use of celebrities in advertising varies enormously around the world. Its highest in Japan and Korea, where over 40 percent of TV ads feature celebrities, and lowest in Ukraine, Sweden, and Canada, where the proportion is under 5 percent. It is 10 percent in the U.S., and 12 percent in the UK. There is no pattern of celebrity use by category, as this comparison of U.S., UK and China data shows.

There is no consistent pattern by category on use of celebrity in ads

% of total ads Personal Care Drink Food Telecommunications Appliances Apparel Technology Household Automobiles Medical 1 UK 14 12 10 8 7 7 7 6 6 4 2 10 11 4 16 11 32 9 10 18 11 7 24 46 USA 14 14 23 CHINA 32 52

The type of celebrity used varies a lot by region. In Asia Pacific, around half of ads featuring celebrities use film stars; this drops to 12 percent in Latin America. The second most popular type of celebrity is TV presenters; this is at 35 percent in Latin America, but drops to 10 percent in Africa. It is also apparent that in Asia, local celebrities are far more likely to be used, whereas in the U.S. the split between local v international celebrities is closer to 50:50 (probably because U.S. celebrities are more likely to be internationally known).

Use of local v international celebrities varies by country

Japan Korea China Thailand India Philippines Indonesia Brazil Russia United Kingdom USA 8 18 14 16 36 47 49 51 International 13 15 34 92 82 86 84 64 53 51 49 Local 87 85 66

Overall, there is virtually no difference in performance between ads featuring local or international celebrities. China makes the greatest use of international celebrities in Asia; while foreign celebrities lack familiarity, particularly in tertiary cities, they are more likely to be viewed as different and as trend-setters.
ARE THEY EFFECTIVE?

Celebrity-based campaigns can be very effective. In the U.S., one client had used a celebrity in some of its ads over a ten year period, and wanted to know if they should continue the relationship. Our analysis showed that the ads featuring the celebrity performed better on key measures than those without the celebrity. The celebrity had also become a strong branding device. We were able to estimate that the celebrity was worth over $5 million per year to the client. Since the contract cost considerably less than this, the client continued the relationship. In the UK, Barclaycard used the popular comedian Rowan Atkinson during the 1990s in a highly successful campaign. It was hugely enjoyed and well recalled, and it communicated the intended messages. Barclaycards share of new cardholders rose from 15 percent to 25 percent in five years. However, there is very little difference overall between the performance on most key measures of ads with celebrities versus those without; this includes enjoyment and involvement. Some countries, notably the U.S., Chile, Australia and China (except Beijing), find celebrity ads more involving; but in others, particularly where celebrity ads are more common, this is not the case. Overall, branding levels tend to be similar.

Celebrities make very little difference overall on most key measures

Average global percentiles

Ads with Celebrities

Ads without Celebrities

Enjoyment:

56

(7407)

54

(39,313)

Involvement:

53

(8468)

49

(48,274)

Branding:

53

(7178)

50

(37,864)

Finished Films

However, for some long running campaigns, particular celebrities have, over time, become synonymous with the brand: for example, William Shatner and Priceline in the U.S., Gary Lineker and Walkers in the UK, Carina Lau and the cosmetic brand SK-II in China. This example shows the gradual build of one celebrity brand cue over 15 ads. In Japan, however, branding scores are slightly lower for ads with celebrities possibly due to the celebrities endorsing too many brands.

Celebrities can wear in as brand cues

What happened in the advert to help you know that it was for Brand X?

Celebrity brand cue %

M 77 G 58 F E 42 40 L 66 H I 48 47 K 55 J 43

N 74

O 81

C 51 B 34

D 50

A 5 Base:
(164) (117) (81) (126) (102) (85) (67) (96) (109) (161) (154) (149) (161) (128) (126)

15 executions over time

Ads featuring celebrities are no more likely to be seen as conveying new, relevant, credible news than others; so, unsurprisingly, they are no more persuasive than other ads.
THREE KEY QUESTIONS FOR EFFECTIVE USE OF CELEBRITIES

Given that using a celebrity does not guarantee a successful campaign, what are the guidelines for getting it right? Wed suggest there are three key questions you need to answer. Who are they? Where the celebrity is central to the core idea, its important to establish how well known they are among your target audience. In the U.S., a lipstick brand was launched using a British model. Among those who recognized her, communication, enjoyment and purchase intent were much stronger.

Those who recognized the celebrity expressed stronger purchase intent

Recognized Didnt recognize

Definitely would buy / probably would buy for the price of $4.97

74% 56%

However, less than a quarter of the audience recognized her, severely limiting the effectiveness of the campaign. Conversely, advertising can make celebrities. In the UK, Halifax bank used staff members in its ads one of whom, Howard Brown, became a celebrity in his own right. Also in the UK, Nescafs Gold Blend coffee campaign of the 1990s created a long running series, following the slow build of a romance. When the couple first kissed, it made the front page of The Sun, the biggest selling UK newspaper, making celebrities of fictional characters. There may be merits to running a campaign which works even if the celebrity is not recognized; but it is useful to be clear how important the celebrity is in your campaign. Are they liked? While it isnt essential for a celebrity to be liked, this can have a significant impact on emotional response to an ad, as the example below shows.

Likeability of a celebrity can signicantly impact on emotional response

Like celebrity % Enjoy a lot Enjoyment of ad Quite enjoy 13 34 Dont like celebrity % N/A 6 48 Wont mind 38 29 Wont enjoy much Wont enjoy at all Mean score: (+5 to +1) 11 4 3.42 20 2.37

A snack food client in Turkey wanted to explore whether to use celebrities in their campaign, and researched two ads with us, both with and without celebrities. The presence of a (much liked) celebrity made a slight difference to the first ad, improving its enjoyment and impact; but the celebrity in the second ad was found pretentious and arrogant, and had almost no effect on the ads performance; both versions performed poorly. In particular the likability of the celebrity needs to be assessed among the target audience. In one project for a cereal brand in the UK we asked about celebrities considered positive role models. One particular TV and radio presenter was rated highly; but this ranking was driven by the 40+ age group. When we researched an animatic version of an ad for the brand featuring him, he was dismissed by the younger target respondents as being too old and old fashioned. In the ad he played with a younger womans hair; a scene which was found disturbing and uncomfortable. The ad was not progressed. What do they represent? You also need to understand how well the celebrity fits with the brand, or with where you want to take the brand. When the celebrity is perceived to be appropriate, communication can be enhanced.

The right fit celebrity can enhance communication

Find celebrity Dont find celebrity Difference appropriate % appropriate % Are made from natural products Suitable for the whole family Ideal for everyday meals Are new and different Create tasty meals without effort Are high quality Combination of different textures Taste great/delicious Moving with the times 79 68 61 61 60 56 51 42 40 59 41 31 21 41 21 21 24 14 19 35 30 18 26 20 27 30 40

The choice of the right celebrity for the campaign is important. One automotive client in India came to us asking for advice on the right celebrity to use to represent the brand values and aspirations. We explored which celebrities were best known across India, which were most popular on Twitter and Facebook, and how many brands they already endorsed. But we also explored their personalities, to establish which was the best fit with the brand. The client adopted our recommendation, and saw an almost immediate improvement on brand health and sales.
POTENTIAL PITFALLS

Unlike, for example, an animated character, celebrities are human, and subject to human failings. So there are a number of ways in which a celebrity could become a liability to the brand. These are discussed in our Point of View paper, Celebrity Power: Can Less Be More?. The Chinese athlete Liu Xiang was in the London Olympics, but had apparently disguised an injury; the injury flared up and he had to pull out. Public opinion turned against him for his perceived dishonesty, and still hasnt fully recovered.

Perceptions of Liu Xiang in China

20 18 16
Average Dishonest - Liu Xiang

14 12 10 8 6 4 2
London Olympics 2012

0
Ap 2 r1 2 M ay 12 Ju n 12 Ju l1 Au 2 g 12 Se p 1 O 2 ct 1 Ja 3 n 1 Fe 3 b 1 M 3 ar 1 Ap 3 r1 M 3 ay 13 Ju n 13 ar 1 M

Data Source: Millward Brown CelebrityZ 2012-2013 Personality Results

In addition, there is the risk of the celebrity becoming the hero of the ad, rather than the brand. A new campaign was developed for a tea brand in India, featuring popular movie actors. We researched, in animatic form, two versions of the ads; one with the celebrity, and one without. The research showed that, in the versions with the celebrities, the message takeout was weaker; the celebrities were drowning out the communication. And while the celebrities were intended to help gain attention, the versions without celebrities were just as impactful. The client went ahead and filmed and aired versions without celebrities. But experience suggests that this is more an issue of ad structure than the fame of the celebrity. Testimonial ads, for example, with their clear focus on the brand, tend not to suffer this problem. But the celebrity needs to come across as likeable and genuine, or the endorsement may lack credibility. Alternatively, the celebrity may just be a poor choice. In the UK, two ads were tested for a brand. They had identical scripts, but one featured a genuine former pop star, while the other featured an actor playing the part of an old pop star. The version with the actor was preferred. The celebrity was considered inappropriate, and weakened the credibility of the ad.

The celebrity weakened credibility

What was put across about the brand was believable With celebrity % Agree Strongly 27 Without celebrity % 27 UK average % 26

Agree slightly

28

44

36 19

Neither/nor Disagree slightly Disagree strongly Mean score: (+5 to +1) Base:

16 14 13 3.43 (99)

15 9 6 3.77 (108)

10 9 3.60 (>278 ads)

SCREEN AGNOSTICISM VIDEO 1 BECOMES A FLUID MEDIUM

The notion of marketing activity being online or offline or mobile will cease to be a meaningful debate in 2014. Screen Agnosticism refers to both the way consumers watch video content and the mindset marketers need to adopt when planning video campaigns. Marketers will move beyond preoccupations with classifying the full array of screen sizes and the appropriateness of content for each. Instead, they will adopt an agnostic viewpoint where the benefit of maximizing audience has primacy over optimization by channel. Meanwhile audiences will consume video content by whichever means is most convenient in a given moment. Content is king and the screen is simply the most convenient window through which to view it. This might be long-form content on mobiles or short-form content on connected TVs. It could mean beginning an episode of your favorite series on your mobile during your evening commute, switching to the TV when you get home, and then deciding to watch the next episode on your tablet in bed. Similarly you may receive a great piece of viral content on your laptop at work, which you then show to your partner via your smart TV later that evening. The availability of video content and the technology to view across devices have coincided to create the conditions required for this behavior change to become the norm over the next 12 months. Products like Chromecast and AppleTV make syncing content across screens effortless, and YouTube now remembers where logged-in users left off when they restart a video at a later point in time, on any device. At the same time, ads are seamlessly optimized for the screen size at the point of exposureessentially a YouTube ad campaign running as online video and mobile video can also appear on TV the screen is simply dictated by consumer behavior. So for marketers, the implications are clear. If, when you create a video ad or a piece of video content, you picture in your mind a nuclear family sitting on the couch watching a TV, youre misunderstanding the multitude of ways video content will be consumed globally in 2014. This will necessitate an ever greater focus on research to understand exposure across devices in order to plan the optimal utilization of media in an agnostic way and deliver strong creative assets efficiently to video audiences. Rob Valsler, Head of Media, Millward Brown Singapore

Changing Channels recommendation

Find out how your target audience consume video across screens and plan against that.

2 MICRO-VIDEO MULTIPLIES CHALLENGING MARKETERS TO KEEP PACE

In 2013, the internet exploded with a new trend: micro-video. There are now many websites that allow users to upload short videos, typically shot on a mobile phone. The trend started with Vine, a Twitter service allowing for sixsecond looping videos. However, competitors were quick off the mark and include Instagram video (15 seconds), MixBit (16 seconds), Tumblr GIFs (short animated images, similar to Vine) and numerous smaller players like Viddy, Qwiki, Tout and Klip. In 2014, this trend will continue with more video uploads across a fragmented set of platforms. This phenomenon is likely to continue to be largely mobile focused, but already desktop Vine aggregators are becoming popular and Vine content is being shared on established platforms such as YouTube. For the short term, micro-video will continue to be dominated by Vine, Tumblr and InstagramVine due to the fact that it largely popularized the format, Instagram due to its already massive user base, and Tumblr GIFs due to the extreme resurgence in the formats popularity. Micro-video offers the promise of more engagement than traditional online video for brands, with branded Vines four times more likely to be shared than traditional online video. This makes the trend an enticing one for those brands willing to leap in feet first. These short formats, however, demand a focus on creativity coupled with simplicity, a trend that may well transcend micro-video and start to influence more traditional online video and perhaps even TV advertising. Marketers may be tempted towards the longer timeframe offered by Instagram, since this is closer to a traditional length execution, but this risks not taking advantage of the unique audience that both Vine and Tumblr provide. At the moment, the bulk of the branded content will be shared virally as opposed to paid promotion, but if the history of advertising on platforms such as Twitter and YouTube repeats, then within a few years commercialized advertising on these platforms is a near certainty. The popularity of micro-video ads, coupled with the ease with which the content can transcend the mobile, tablet, PC and even TV gap, could eventually result in micro-video becoming the most portable video format across screens. Brands should remember that the existence of a platform does not necessitate brand presence. Rather, brands must make fundamental decisions about where they should be active, how appropriate these formats are to their target consumers, and whether they can adequately pursue a micro-video strategy before embarking in this direction. Getting the creative and the tone right within these restricted formats is not straightforward, but many more brands will no doubt follow the leads of Coca-Cola, Oreo and Red Bull to experiment further in this space. Jarrod Payne, Associate Account Director, Millward Brown South Africa

Changing Channels recommendation

Actively explore experimental micro-video opportunities, learn from early-adopter brands.

3 THE BREAKTHROUGH OF WEARABLE SCREENS

Hot on the heels of rising tablet and smartphone ownership, wearable technology looks set to be the next big thing that will start to break into the mainstream in 2014. The health and fitness market will continue to play a key role in bringing wearable technology closer to consumers; many mobile health wearables such as Nike+ and the Fitbit tracker are already available and growing rapidly. Smartwatches such as those from Pebble and Omate have recently been joined by offers from Sony and Samsungs Galaxy Gear; Apples longrumored iWatch may well appear in 2014 too. Tackling things from a slightly different viewpoint, Google Glass is also likely to expand its restricted Explorer Program to a wider public launch in 2014. The collective ingenuity, competitiveness and marketing muscle of these firms means that 2014 could see the start of a wearable tech explosion. Wearable devices look set to evolve from nice to have tech to something I want and then to something I need. Wearables will transform the way we interact with our existing screens since they enable users to read instant messages, take photos, listen to music or conduct a search, all without reaching for their smartphone. No single device has yet nailed this perfectly and some safety and privacy concerns are emerging, but wearables are getting ever smarter and improving iteratively. With virtually limitless applications to a number of verticals, the wearable technology market will represent a huge value proposition for many ecosystem members, from manufacturers to app developers through to advertisers. Wearable technology will offer unique media opportunities for brands to captivate target audiences and build meaningful differentiation. Brands could create a device of their own such as Nissans Nismo watch or work through friendly apps to enhance the consumer experience. The challenge will be developing a deep understanding of what consumers want from these new wearable screens so that brands can deliver something useful and relevant to their existing proposition Adriana Sousa, Head of Digital & Media, Latin America, Millward Brown

Changing Channels recommendation

Consider whether a wearable presence is a good opportunity for your brand to build a meaningful point of differentiation.

4 MULTI-SCREEN BIG DATA CONNECTIONS ENHANCE EFFECTIVENESS INSIGHT

Consumer use of screens as a primary media vehicle is not new news. Television has been the mainstay for years to reach the broadest number of consumers. But think of the recent explosion of other screen-based devices; we interact with screens in taxis, airplanes, billboards, ATM machines, and video games as accepted and expected parts of our daily information flow. Screen-based mobile devices such as tablets and smartphones are becoming universal, adding a social, local, mobile, and highly personal component to our consumption of messages on screens. For example, my new mobile device describes itself as Life Companion when switched on and, given how many times I feel compelled to check it each day, it is an apt description. In this always on world of interaction with many media, the importance of understanding each consumer encounter with a brand grows dramatically. This understanding requires a 360 lens, since no interaction is isolated from all the others. They continue throughout the day, across various moments we all experience, but are often delivered in personal ways. From a marketing effectiveness perspective, this means that granularity is the key to insights and decisions. Marketers need windows into the specifics of each consumers interactions with each screen for each brand. However, marketers struggle because the digitized data that sits behind this is not yet fully linked across screens. The perfect single-source data set with all of an individuals exposures, attitudes and actions is yet to exist. However, in the era of Big Data, this is changing. Consider that the totality of a households exposure to advertising on TV is recorded by set-top boxes, and viewers mobile devices are being equipped to listen to TVs via audio fingerprinting. These mobile devices already capture numerous interactions from social media and can be leveraged for short attitudinal surveys. Those survey responses are in turn being linked to panels that are tied to other consumer behaviors and choices (specific sales, traffic patterns, etc.). In 2014, the technology to tie together the pieces of the multi-screen puzzle will be leveraged on a much wider scale than in the past. The central question will remain: How are all brand encounters uniquely and synergistically impacting sales and brand perceptions? The ability to passively tie together multi-screen interactions will gradually enhance our ability to answer this question. Bill Pink, Senior Partner, Millward Brown USA

Changing Channels recommendation

Investigate how emerging multi-screen datasets can improve your marketing effectiveness research.

5 MULTI-SCREEN MINIMALISM DELIVERS MUCH NEEDED TRANQUILITY

Less is more. In a multi-screen world, we focus on various stimuli in quick succession. More often than not, we use Fast Thinking to make quick decisions about what we will interact with, taking only 1/20 of a second to make decisions on the appeal of digital stimuli. Brands that design their content with a direct and to-the-point approach will tend to succeed. Minimalist designs such as Apples icons and the tiles of Windows 8 help us focus on specific information and have been designed to work well across multiple screens. Other brands will also increasingly adopt a minimalist multiscreen mindset as they architect their future brand aesthetic. In the latest installment of the James Bond series (Skyfall), Daniel Craigs character has an encounter with his new, younger Quartermaster (Q played by Ben Whishaw). They meet in the National Gallery and admire a painting together before Q hands over a gun and a radio. Compared to the more exciting gadgets of yesteryear (jetpacks and wristwatches with lasers), these offerings seem benign and dull. Yet later on in the film, they prove invaluable. Our own eyetracking results for digital display ads suggest that just one appealing visual is enough to attract attention. That attention is retained more by ads with a crisp, clear appearance that require minimal cognitive load. A brand such as Dove (and its Real Beauty campaign) has exactly the right kind of visual identity to benefit from this learning and deliver strong impact across online, TV, and mobile screens (as well as in print and outdoor media). The 2013 BrandZ Top 50 Most Valuable Latin American Brands positions Corona (a beer from Mexico) as the top brand in the region. Most people have seen Corona advertisements; sunny beach backdrop, sounds of waves gently crashing into each other, the bottle front and center; a sense of tranquility minimalism at its finest! This approach continues to transfer quite seamlessly across screens. Brands that interface with their consumers with this in mind, will most likely capture their attention faster and retain it for longer. With so many screens to look at and so many competing distractions, instant recognition via minimalist design is increasingly the aim of great brands. Jorge Bueso, Senior Research Executive - Innovations, Millward Brown Honduras

Changing Channels recommendation

Review whether your brands advertising aesthetic is appropriate for a multi-screen world.

6 MESHING, STACKING AND SHIFTING GIVE BIRTH TO A NEW ERA OF MULTI-SCREEN ADVERTISING
Multi-screen device usage is creating a new landscape for content consumption that can be simultaneous or sequential and can be driven by related or unrelated content. Meshing is simultaneous usage of multiple devices for related content. For example, this could be watching the cooking channel on TV and searching for the recipe online. Marketers will tap into this by ensuring their advertising content is an extension of the programming content. Messages will be relevant, fluid, and related. Real-time social marketing is a specific application of meshing that requires brands to be ready to respond immediately to social media comments and will be increasingly expected as more brands seek to be part of the social TV conversation. Oreos You can still dunk in the dark tweet during the 2013 Super Bowl blackout set a bar that others will now seek to surpass. Stacking is simultaneous usage of multiple devices for unrelated content. For example, this could be checking social media while a football game is on TV. Marketers will tap into this by understanding that unrelated distractions can sometimes be just as welcome as an extension of whats happening on TV. Brands with no connection whatsoever to sports may reach out online to the long-suffering partners of sports nuts during games. Shifting is sequential usage of multiple devices for related content. For example, this could be browsing for airline tickets initially via a smartphone but completing the purchase via a laptop. Marketers will tap into this by ensuring the consumer experience is consistent across all platforms. Responsive web design (adapting web content to every devicemobile, tablet, PC) will become non-negotiable in 2014. Added to this, being able to track the consumers path to purchase across devices will be key, so that there is no break in the brand experience journey. The final piece of the multi-screen media puzzle is sequential, non-related content. The same person reads news on their smartphone during their evening commute, and then tunes in to a TV drama at hometwo completely unrelated events, but still two opportunities for a single brand to contact that consumer. Marketers will tap into these opportunities via deep audience understanding. The exact multi-screen sequences will be hard to predict, but precise targeting and consistency of messaging will deliver success. All of these multi-screen behaviors offer brands new opportunities for connecting with people if they can understand and navigate the landscape. Monique Leech, Director of Digital Solutions, Millward Brown South Africa

Changing Channels recommendation

Assess the multi-screen media consumption of your target consumers, and then tailor your marketing to best exploit these new behaviors.

7 AT LAST TRADITIONAL CHANNEL INSIGHTS AND MULTI-SCREEN DIGITAL INSIGHTS TIE THE KNOT
2014 will be the year in which we truly start to understand the consumer path to purchase across all off-line and online touch points. The concept of the omni-channel consumer is well understood, with businesses striving to ensure a seamless consumer experience across all touch points, including brick-and-mortar stores, call center interactions, and direct mail outreach as well as screen-based personal computer browsing, mobile device usage, and TV advertising exposure. Although consumers seamlessly move across these channels, many businesses have yet to set up systems to optimize the consumer experience across them. This situation is exacerbated by the fact that market research to help organizations understand these channels and their interplay has been disjointed at best. There was a time not long ago when organizations had little visibility into the tactics that actually bore fruit. The industry responded to this challenge by devising smart but not entirely satisfying ways to measure success. The emergence of a digitally-enabled world promised an eminently more measurable environment. However, there were now two disparate measurement realms: the traditional non-digital realm and the digital realm. Organizations had their traditional research and their digital research, with little overlap between them. Then the mobile revolution rapidly changed consumer behavior, compounding the measurement challenges and introducing yet another silo of market intelligence. The good news is that the market research industry is responding. Market intelligence vendors are standardizing, aligning, and integrating measurement systems and metrics. 2014 will be the year in which a standardized omnichannel view of consumer behavior will become a reality, allowing organizations to truly understand the path to purchase for their consumers. For instance, we already know that 32% of flat-panel TV shoppers will consult online reviews before visiting a store, 72% of shoppers want to see TVs in a store before considering a purchase, and that 53% of shoppers will subsequently visit that retailers website. And soon we will be able to go deeper. We will have integrated data to understand the role of each online and offline touch point on the consumer path to purchase, across all channels and all digital devices. We will then be able to segment that path to purchase data to derive valuable insights to power both strategic and tactical marketing investments. Conor OMahony, Vice President of Products, Millward Brown Digital

Changing Channels recommendation

Embrace new research approaches which provide integrated insight rather than treating data from digital screens as a separate silo.

8 SOCIAL TVS PROMISE IS TIGHTLY COORDINATED TARGETING ACROSS CHANNELS AND SCREENS
Consumers are spending more time in front of the TV with digital and mobile devices, and social media is the main way people are interacting with TV content. In the past year, its become clear that social TV is, for all intents and purposes, Twitter TV. There will be other platforms, like Facebook or other niche networks, that will now amplify their presence in the space and may expand the arena; however, Twitter will continue to define social TV in the immediate future. One way advertisers are already taking advantage of this is via TV ads with hashtags and promoted tweets using that same hashtag. Another way is via branded tweets targeted at the chatter around a specific TV show. In 2014, the social TV opportunity will be expanded as Twitter introduces additional audience-based targeting opportunities. Based on their data connecting TV to social media usage on the second screen, Twitter will be able to define likeminded communities organized around TV viewing habits. Eventually this will lead to more sophisticated psychographic targeting when those audiences are further segmented based on other interests and habits. For brands that are title sponsors of a show or an event, this means they will be able to continue targeting their show-specific audience long after the event itself, and not necessarily just when those people are tweeting or reading about show-specific content. This puts less pressure on real-time meshing of TV and a second screen, as brands can also target these audiences at other potentially less distracting times. It also opens up opportunities for advertisers to participate in social TV in a broader way, by replicating a TV target audience in the Twitterspherefor example, by targeting people interested in all kinds of sports programming, not just those watching one specific sports show. In this way, social TV marketing will evolve from being just a narrative to becoming part of an audiences lifestyle. Anne Czernek, Senior Research Analyst, Millward Brown Digital

Changing Channels recommendation

Align TV media buying with Twitter promotional efforts to maximize your social TV audience.

9 SMARTPHONES ARE THE ONLY SCREEN THAT COUNTS FOR THE CONNECTED YOUTH OF TODAY
Smartphones are at the hub of young consumers lives. Mobile use is deeply personal for this generation, and the bulk of their living, learning, and buying will shift to smartphones even as they continue to multi-task across their other digital devices. Because of this, youth-focused brands will lead the field in providing a seamless multi-screen experience across devices in order to retain attention and to drive brand consumption among this audience. These marketers will need to keep in mind that the younger generation is very fickle. Even on the smartphone, they move constantly between social media sites, micro blogs, internet browsers, and instant messaging applications. Only the most innovative, forward-thinking and relevant marketing, offers and products will succeed in holding their attention. Creating a buzz in their digital sphere and being able to connect with them at their level, in a language and style that is youth-centric, will be crucialespecially for niche brands that depend on word-of-mouth referrals. Marketing efforts will therefore focus on multi-screen strategies that primarily reach the younger generation via social media with something exciting and fun, since these social networks are rapidly becoming the platforms for all their information-seeking and decision-making. A brand that can befriend them will in turn be assured of loyal brand ambassadors who endorse and broadcast their choice to their world. These brands will also be perceived to be more credible. Constant innovation will be key in 2014 since the youth of today are attracted to game changers as well as trendy and fashion-forward brands. Therefore, successful youth-targeted mobile ads will be noticeably different from conventional TV ads or even online ads, in order to demonstrate that the brand is on-trend and up to date. Rakesh Kumar, Head of Africa - Middle East - Asia Pacific, Firefly Millward Brown

Changing Channels recommendation

Youth-targeted brands should adopt a mobilefirst marketing approach. This should likely have a heavy social emphasis and be innovative, nimble and fashion-focused.

10 VIDEO BUDGETS CONTINUE TO SHIFT FROM TV TO MULTI-SCREEN

It is clear that consumers now live in a multi-screen environment, where TV consumption is being supplemented by ever more time spent viewing other screens. Adapting to this change remains a huge challenge to marketers, especially those big advertisers who historically relied on mass TV media. Marketers want to follow and communicate with consumers as they journey across multiple screens, but some still have concerns about whether laptop, tablet, and smartphone screens are large enough or delivering high enough video quality to ensure good advertising attention and effect. Our evidence suggests these concerns are unfounded and that appropriate budget allocation across screens will increase ROI. One recent Millward Brown study in China found that transferring 40% of the TV budget to other screens increased total reach by 20% and reduced investment required by 30%. Evidence such as this will continue to drive growth in online video advertising, especially pre-roll, during 2014. As marketers increasingly plan for multi-screen video success, we will see many interconnected developments. More video advertising will be created to work well across all screens, and not just optimized for TV. Organizations will restructure as they realize that TV and digital media buying can no longer be split. Many multi-screen video strategies will be defined by a focus on optimizing cost-effective reach. To enable this, more use will be made of unified media measurement currencies (e.g. TV and Internet GRPs) as well as multi-media reach-based optimization tools. Last, but by no means least, further effectiveness learning about the roles of different screens in building specific brand associations will prove the value of multi-screen strategies and will also be used to improve future campaign performance. Peking Tan, Director of Research and Development, Millward Brown

Changing Channels recommendation

An appropriate video budget allocation across screens will increase ROI. Use new planning and effectiveness tools to inform your transition from TV to multi-screen.

11 DIGITAL OUTDOOR BLOWS UP THE IDEA OF A SIMPLE SCREEN

More than ever before, our lives are filled with colorful glowing rectangular screens that show us anything from revolutions in Cairo to recipes for kale, all in an instant. Marketers are obsessed with the four screensTV, PC, tablet, smartphoneand how to get their messages across via these platforms. But, before that conundrum is solved, the very question itself may be changing. Technological innovations are taking the traditional screen beyond the TV, PC, tablet, and phone and onto gadgets from glasses to watches to clothingand dont forget elevators and taxis and bike shares. The screen as we know it is changing into something we may barely recognize. Now, beyond our multiscreen strategy, we must answer the question: How do we market across clothing, wearable devices, and LED light-up cars? Those who thought that Google Glass was innovative because it could project a message literally in front of the wearers eyes will be astounded to see some of the platforms that will be coming in the next year: clothing woven with flexible LED thread and flexible processors built in that can deliver messages and capture data (Nike is already experimenting with this), advertising infused with heat sensors to market ice cream on a hot day (as was done in London), and LED-covered taxis that geo-locate to deliver messages relevant to the neighborhood it is passing through. The very idea of a simple screen is being blown up. For marketers, the challenge now becomes: How do I create and deliver a message that is constantly contextually relevant and what data do I need to have that message evolve? An added challenge is the question: How do I ensure that the creative is even more appealing, given the proliferation of messages is exponential? Now is the time to start thinking about these questions, before you see someone on the street with a T-shirt that flashes an ad for your competitor whenever they walk by your store. Catie Williams, Analyst, Millward Brown USA

Changing Channels recommendation

Dont get obsessed with the four screens. Think creatively about the evolving digital outdoor landscape and its potential to deliver arresting and powerful marketing firsts.

12 SUCCESS WILL NOT GO TO THOSE WHO FOCUS ON SCREENS ALONE

Before digital came along, many marketers almost exclusively obsessed about TV as if it was the only touch point that mattered in brand marketing terms. Many now risk swapping one obsession for another by focusing on multiscreen alone. However, the most successful marketers will be the ones that implement truly integrated multi-channel strategies that stretch well beyond screen media. In truth this narrow mindset has in part been a product of the inadequacies of the approaches used to evaluate multi-channel performance. However, the advent of more sophisticated evaluation methodologies such as our own CrossMedia Research shine a clearer light on the truths of integrated marketing performance. The most telling facts are that: We have found that nearly 40% of campaign impacts derive from true multichannel synergies by this we mean 1+1=3 style media multiplier effects, where consumers are more persuaded by the brands message if they encounter it in more than one media. Often the biggest synergies arise between screen and non-screen media, such as Posters, Print and especially Point of Sale. Across our global CrossMedia database the single most impactful brandbuilding medium per dollar spent is magazines and other non-screen media have also held their own against screen media in this respect. All this has happened despite the explosion of digital (or screen) media options across the globe. Screen media do perform well within our CrossMedia studies, but we are sure that marketers who think more holistically than screens alone, and who implement truly integrated multi-channel strategies will be the biggest winners in 2014. James Galpin, Media Director, Africa - Middle East - Asia Pacific, Millward Brown

Changing Channels recommendation

Consider the role your multi-screen media plays in the overall channel mix. People dont yet spend their entire lives staring at screens (though it may sometimes feel that way!).

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ARGENTINA

Rising Tides: Consumption and Ination

IN RECENT YEARS, ARGENTiNA HAS MANAGED TO SUSTAiN THE GROWTH OF iTS ECONOMiC ACTiViTY. CHARACTERiZED BY STRONG CONSUMPTiON THERE ARE CERTAiN iNDUSTRiES, SUCH AS THE AUTOMOTiVE AND TECHNOLOGiCAL (LED TVS, MOBiLE PHONES AND OTHER APPLiANCES) THAT HAVE PERFORMED PARTiCULARLY WELL.

By Martn Schijvarg, Millward Brown, Argentina

ompared to the global context of economic stagnation in the United States and in several European countries, Argentina has managed to maintain employment rates and the social development funds designed to improve them, including the Plan Trabajar, Jefes y Jefas de Hogar and the Universal Child Allowance. An important feature of the Argentinean economy and approach to employment in various sectors remains collective bargaining (for example over workers pay and conditions). In many cases, this has created agreements at or even higher than the inflation rate, which has exceeded 20% annually over the past five years. (Note that the gap between this figure and INDEC officiala figures of 10% annual inflation is very pronounced). The government has tried to address the sustained increase in the cost of living by controlling prices, with varying results depending on the type of goods. Higher consumption levels have forced Argentina to import more and more energy and gas to meet the growing demand. This has generated strong growth in imports and in order to strike a positive trade balance, the government has restricted imports of many products. Earlier this year it also announced that the tax on credit and debit card purchases made abroad would rise from 15% to 20%. Another issue the government has been tackling is the capital leakage caused by the flight to the dollar (a common Argentine response to economic uncertainty). Since 2011, the purchasing of dollars has been restricted to certain commercial activities, leading to a 50% increase of the parallel dollar rate (also know as the blue dollar) this year. This has severely damaged the construction industry in particular, since properties are quoted in dollars and currency disparity between the official and parallel market creates tension, as some sellers want to reap dollars from the sale and buyers face difficulty in obtaining them.

ARGENTINEaN BRaND VaLUE

ROBErTO DE NAPOLI BrandAnalytics Associate

Argentinean brands have experienced a very big drop in the BrandZ Top 50 Most Valuable Latin American Brand Ranking 2013, losing almost half of their value (43%) with a fall from US$4.7 billion to a mere US$2.7 billion.
2012
Beer 7% Financial Institutions 4% Energy 66%

2013

Beer 22% Financial Institutions 5% Energy 48%

Communication Providers 23%

Communication Providers 25%

ARGENTiNEAN BRAND VALUE % CHANGE BY SECTOR

-28% Energy 9% Communication Providers 206% Beer 34% Financial Institutions

OVERALL BRAND VALUE CHANGE 2012-2013

-43%

+
Source: BrandAnalytics

BRAZIL

What Brazilian MacroEconomics Mean For Brands

ANY PLaNS FOR STRaTEGIC DEVELOPMENT OF LOCaL OR GLOBaL BRaNDS WITHIN BRaZIL MUST RECOGNIZE THE MaJOR DEMOGRaPHIC, SOCIaL, ECONOMIC, CULTURaL aND POLITICaL TRENDS THaT aFFECT CONSUMPTION PaTTERNS, aND THE CHaNGES THaT aRE OCCURRING WITHIN THEM. HERE WE CONSIDER SOME OF THE KEY FaCTORS THaT aRE SHaPING THE BRaZILIaN CONSUMER PROFILE TODaY.

By Aurora Yasuda, Business Development Director, Millward Brown Brazil

THE ALtERED AGE PYRAMID Improved quality of life has increased the average life expectancy of the Brazilian population. This, combined with the fact that the large contingent born between 1950 and 1960 the baby boomer generation has now reached maturity and has now begun to change the age structure of the population. The over 65s population represents the highest growth, and may well exceed 4% year-on-year between 2025 and 2030. Meanwhile, the growth rate of the 0 to 14-year-old population has been declining in absolute value from 1990 to 2000. This is due to families having fewer children, even among lower classes (and despite the fact that the infant mortality rate has also shown a downward trend). In 2008, 0 to 14-year-olds represented 26% of the total population and the over 65s accounted for 6%. The projection for 2050 shows a reversal: children will represent 13% while the over-65s are expected to exceed 22% of the population. The value of pester power will perhaps be sidelined for brands by the growing importance of the more considered approach of the older consumer. CHANGES IN tHE MAKE-UP OF tHE FAMILY UNIt In a more open society with greater tolerance and acceptance of separation and divorce, new family compositions and household profiles arise and significantly affect consumption patterns: Single-parent families (households with one adult, usually mothers living with their children). Large families where the children return to their parents home with their own children and receive help from grandparents to raise them. Blended families couples in their second or third marriage where their children from previous marriages all live together with them.

A cOLLISION BEtWEEN cONSUMERISM AND INDEBtEDNESS With economic stability and a steadier employment rate, Brazil experienced a phase of increased consumption, giving many of the population access to consumer goods that they once believed to be beyond their reach. However, the perils of easy credit and high interest rates led to an indebted population that was unable to make ends meet, generating a very high default rate. The indebtedness rate has more than doubled in eight years according to Central Bank from 18% in 2005 to about 43% now. This indebtedness is already affecting the decision-making process for the purchasing of staples; it may well result in a trade-off where the strongest brands earn the loyalty of consumers by offering the best value combined with an emotional reward.

THE FORMALIZAtION OF DOMEStIc WORK INcREASES HOUSEHOLD cOStS For a long time, the employment circumstances of many domestic workers were characterized by high informality with limited access to social rights. However, starting this year, this segment formalized its working relationship with access to labor rights from other categories. Thus, the cost for maintaining maids, nannies, elderly caregivers, drivers, caretakers and so on has substantially increased, forcing families into new agreements and arrangements. The impact of this on disposable income for both employee and employer may yet to be fully felt.

ADOPtION OF GLOBAL cONSUMPtION PAttERNS, DRIVEN BY tEcHNOLOGY As elsewhere across the globe, Brazil has seen the growth of e-commerce and online shopping; the penetration rates of tablets, smartphones and social networking are also rapidly increasing. This window on the world has strengthened the presence of global brands, but it is the brands that fulfill the mantra of glocalization that are at an advantage. Consumers engage easily with brands that reflect or are part of the local culture. In the face of these major and ongoing changes, brands have greater challenges and responsibilities. Brazil remains a market of great opportunities but to capitalize upon them, brands must consistently deliver something beyond the product or service itself. That something must be differentiated enough to attract the consumers interest, and meaningful enough to merit their engagement and loyalty.

CHILE

Chilean Consumers Make Their Voices Heard

IN CHiLE, THE GROWiNG PARTiciPATiON AND EMPOWERMENT OF cONSUMERS iS A HOT TOPic. IN FAcT, cONSUMER cOMPLAiNTS ARE BEcOMiNG MORE FREQUENT AND HAVE EVOLVED FROM SiMPLE cRiTiciSM TO ORGANiZED AcTiONS. CONSUMERS HAVE BEcOME MORE cLEAR AND DiREcT iN DEMANDiNG THEiR RiGHTS iN GENERAL, AS WELL AS THEiR RiGHTS TO iNFORMATiON.

By Marcela Prez de Arce, Client Service Director, Millward Brown Chile

opics of complaint have changed. Whereas previously, criticism tended to centre on retail, and later banking, now there is a return to issues of mass consumption and especially food.

This phenomenon has found resonance in the media, generating a proliferation of TV programs dedicated to denouncing breaches, not of civil or human rights, but of consumer rights. The media itself has given rise to a need for new regulations of consumer issues in Chile. As a result, in the second part of this year, a new law will be enacted to regulate nutritional labeling. A clear sign of the strength and impact of consumers increased organizational capacity is the governments recent creation of agencies like SERNAC (Servicio Nacional del Consumidor - National Consumers Service, a Government institution) on finance which protects consumers rights. How are brands reacting to this new context of consumer participation? Insufficiently, it seems. Brands havent redefined their relationship with consumers, who are now clearly social actors as seen especially clearly in online social networks. In Chile, social networks still represent the fastest growing platform for participation and organization, its where consumers express themselves most clearly and fully. But, brands have not yet grasped the fact that the demand coming from these new consumers is for a more horizontal and candid relationship. Instead, brands limit their use of social networks to two areas: promotional advertising and complaint departments. Similarly, brands apparently have misunderstood or ignored the demand for more transparency. Brand managers seem to believe that the more horizontal, candid approach will leave them vulnerable. However, the transparency consumers want doesnt imply a larger quantity of information, but rather more sincerity and honesty, a relationship built around dialogue, not monologue. Consumers seem to be saying, Dont leave me in the dark. And when you do provide information, dont insult my intelligence. Todays consumers demand two things: plain talk, and to be informed about how problems will be resolved. This demand for transparency doesnt necessarily mean a desire for more data or more detail about aspects that dont interest consumers. They just want to be leveled with. Two recent cases exemplify the fact. One study revealed that packaged bread labeled light provides more calories than the regular, unlabelled marraqueta (a traditional Chilean type of baguette). Another study showed that olive oil is not always as beneficial to health as people have been led to believe. So, consumer mistrust is on the rise. Brands make and break promises or are vague and insincere in their communications. Consumers themselves are questioning regulations not just product quality itself, but the actual norms regulating that quality. They are focusing on the distinction between whats legal and whats legitimate. This is especially evident in the case of health insurance and retirement funds, where consumer organizations currently have over eighty thousand petitions for legal recourse pending. In the light of this trend, the telecommunications industry has moved a step ahead by establishing self-regulation; something other industries have failed to do. They changed their language and stopped talking about volume in terms of number of megabytes (which by the way, they were not really providing) and responded to consumers new status, proactively heading off potential problems before they could arise. The most recent example regards call centers: the day after a news item appeared denouncing irregularities, SUBTEL simply stopped all sales by phone. The company didnt wait for an investigation, but ended the problem almost instantly. Another example that speaks of sincerity is H&Ms arrival in Chile with a very publicized promise of fair price for fashion; a promise the company has apparently been successful in keeping. H&M is an international brand that probably has experience in these issues, and knows how to relate to consumers on their new terms. It has recognized that in a socially networked economy, every individual is empowered to be either an advocate or badvocate (critic) of a brand. Its clear that Chilean consumers are determined to exercise this power, so brands must hasten to develop strategies to mitigate against its effects and capitalize on its potential for good.

MEXICO

A Rich Brand Environment, But Concentrated in a Very Few Hands

WITH THE COUNTRYS OPENNESS TO INTERNATIONAL MARKETS, ITS GEOGRAPHICAL LOCATION, AND THE PLETHORA OF LOCAL OPTIONS AVAILABLE, MEXICAN CONSUMERS HAVE HISTORICALLY BEEN IN TOUCH wITH A wIDE ARRAY OF BRANDS. FURTHERMORE, THIS POOL KEEPS GROwING AS BIG INTERNATIONAL PLAYERS REALIZE CONSUMERS IN THE COUNTRY ARE BRAND ORIENTED, SAVVY AND wILLING TO SPEND IF THE RIGHT BUTTONS ARE PUSHED.

By Fernando Alvarez Kuri, Director of Millward Brown Optimor Mexico

rom beer to bakery, passing through financial institutions and cement, Mexicos BrandZTM Top 15 ranking illustrates the brand richness in the country, showing also another crucial characteristic of the Mexican market, which is that power is concentrated in a very few hands. Tycoon Carlos Slims empire owns at least four brands on the ranking (Telcel, Telmex, Inbursa and Sanborns); Walmarts Mexican branch, the largest Walmart operation of the world after that of the US, owns two brands, including the most valuable retailer in the country (Bodega Aurrer and Superama); and Grupo Modelo, the largest brewer in Mexico, appears in the ranking with two, including the one occupying the spot as the most valuable brand (Corona). Of all the categories included, one of the most dynamic has been retailing. Historically, Mexico has developed a strong retail culture yet it has been dominated by just a handful of local powerhouses such as Bodega Aurrer, Liverpool and Sanborns, and complemented by international retailers (namely Inditex and its whole brand portfolio). But things have changed lately. Chinas entry into the World Trade Organization in 2001 has forced Mexico to lower its tariffs for imports of said country, meaning that international players whose production depends heavily on China and Southeast Asia are now considering Mexico as an attractive market to enter. Some of these players include heavyweights such as Gap, H&M and Forever 21 and their entry is forecasted to have an important impact on the countrys retailing outlook, since local brands have grown isolated, protected by the governments past international trade policies. But apparel is far from being the only category that is suffering the effects of past protectionist practices. Take for instance the Mexican furniture industry which, by the end of the nineties, occupied third place by sales volume in the world after the US and Italy, and which has been facing a hard scenario when confronting imports from Brazil and China. Competitiveness in the country is still an issue but, more and more, Mexican brands have started searching for ways to overcome an increasingly attractive and thus challenging market, taking advantage of their brand heritage as well as their position as locals. THE tIMES tHEY ARE A-CHANGIN Mexico may be traditional, but it is also open to the new: the country is one of the regions largest Internet markets and it is set to grow. Mexican consumers spend more time online and doing more activities than they did in the past (internauts in the country spending over four hours a day doing more than three simultaneous activities). Nine out of ten Internet users in the country use social media, thinking of it as the second most relevant media to obtain information from (the first place being search engines); in fact, between internauts, Internet is the most used and trusted media, surpassing public and paid television, radio and print. In this scenario, mobile is key. 70% of the 46,600,000 users in the country navigate through mobile devices. Alongside Mexicos competition laws on telecoms, this has pushed the importance of a few brands in the sector, namely gigantic Telcel, the second most valuable brand in the country. But telecoms are not the only category in Mexico in which competition is an issue. Media is also an industry concentrated on a very few: only two broadcasters, Televisa (third most valuable brand in Mexico) and TV Azteca, hold most power in the market. Yet, competition laws in the country are set to change. Aiming to increase Mexicos competitiveness, the government is progressively planning to open more and more sectors and industries. In the case of media, the renewal of legislation is set to change the panorama swiftly, opening up possibilities for new competitors foreign satellite and cable operators and maybe even one new broadcaster led by Carlos Slim to try and shape Mexican opinion. With high penetration, TV is still seen as the key media to start marketing activities with, but more and more, brands are changing their approach towards it. The perceived safety offered by this media has led to an important stage of saturation: in 2012, there were 595 ads a month aired in primetime, a huge change compared to 2005s 462. Saturation has impacted ad effectiveness, lowering scores on communication and increasing a sense of glut and passiveness towards the message, according to Millward Browns DynamicTrackingTM Database. In this new context, to boost their marketing communication efforts, brands in the country must take into consideration the consumers new relationship with media, which goes far beyond just saturation. Mixed media consumption, the search for more active participation as well as interesting shifts in preferences will not only be the most basic challenges advertisers will have to face in Mexico; they will have to create new ways of seeing, narrating and generating experiences in an increasingly competitive market.

MEXICO

Mexico: A Country of Increasing Contrasts

ACCORDING TO DaTa FROM EVERY SINGLE INTERNaTIONaL ENTITY aVaILaBLE, LaTIN AMERICa IS THE MOST UNEQUaL REGION IN THE WORLD IN TERMS OF INCOME. MEXICO, aS a KEY PLaYER, PROVES TO BE FaR FROM aN EXCEPTION TO THE RULE.

By Fernando Alvarez Kuri, Director, Millward Brown Optimor Mexico

he Mexican economy has shown a positive trend on macroeconomic variables, yet most of the countrys population has failed to enjoy the benefits of this growth and stabilization. The number of those living under the poverty line had risen from 52.8 million in 2010 to 53.3 million by the end of 2012, according to data from the countrys National Council of Social Development Policy Evaluation (Coneval). Conevals data, however, shows another interesting trend: despite this growth in poverty, extreme poverty decreased from 2.6% to 2.4% in the same period. The dynamics of these figures illustrate a part of Mexican reality, a country in which a huge part of the population still lives under poverty lines but has increased its overall purchasing power. Mexicos GDP per capita, with a value of $9,741 (current US$) and having grown 2.6% per annum from 2008 to 2012 according to the World Bank, places the country as fifty-seventh; not far behind other major Latam economies such as Argentina (51) and Brazil (53). As with other Latin American nations, during the second half of the twentieth century Mexico followed an economic model that aimed to industrialize the country through the substitution of imports. This meant the development of models based upon heavy subsidization, increased taxation, and highly protectionist trade policies, leaving the country dependent upon a handful of industries. In 1982, the system cracked, and Mexican authorities had to look outward for the first time as a way to achieve development. Nowadays, Mexico is open to international trade, even having once held the position as the country with the most Free Trade Agreements in the world. With a privileged geographic location, Mexico has proven to be a true hinge state, holding strong commercial relations with both cultural and geographical continuums to which it belongs: North America (namely under NAFTA) and Latin America (under various FTAs and multilateral agreements such as the ones held under the umbrella of the Latin American Integration Association, ALADI). But Mexico has also gone far beyond its continent; it holds 14 FTAs across the globe encompassing partners such as Japan, the European Union and the European Free Trade Association. With a huge population (surpassed in the region only by Brazil), its geographic location (which has granted access to the US market and has influenced consumption habits), as well as its numerous international agreements (which have eased access to the country), Mexico has become an interesting consumption market for brands from across the globe. Despite this openness, the US remains the countrys biggest trading partner by far, holding more than 50% of its imports and almost 80% of its exports. SWINGING BACK TO THE PAsT, LOOKING UP FOR THE FUTURE In 2012, Mexico held general elections, which included the ballot for a new President of the Republic. The elections resulted in the return of the PRI (Revolutionary Institutional Party) who had ruled the country without interruption from 1929 to 2000 putting an end to the right wing PANs (National Action Party) 12-year rule. Incumbent Enrique Pea Nietos government inherited a country filled with challenges: an economy which, because of its interdependence with the American market, was hit following the 2009 World Financial Crisis, as well as a society heavily struck by violence after the previous governments attempts to fight drug cartels, which resulted in more than 50,000 deaths across the country. Pea Nietos campaign platform focused heavily on economic matters and structural challenges in the energy sector, the tax system and labor markets; everything wrapped-up under what he called the new-PRI. The nature of such platforms, as well as the proposed change in the way drug cartels were being confronted, has had an effect on the way Mexico is perceived internationally and has, somehow, renewed a sense of opportunity in the country. Pea Nieto has aimed to unite political forces under what is called the Pacto por Mxico (Pact for Mexico) with varying degrees of success: violence is no longer the central axis of the political discourse, even though it is still an everyday issue, instead the discussion for structural reforms in key sectors have taken the countrys political stage. Pea Nietos government has sketched some changes that could potentially boost the countrys competitiveness, though there is still a long way to go before any real effect of such measures is felt, especially since they depend heavily on political will and fragile alliances that still have yet to be fully forged.

PERU

A Particular Multiverse (The Expression of the Peruvian Identity)

NOWADAYS, THE HUGE ECOnOMIC GROWTH THAT PERU HAS EXpERIEnCED DURInG THE LAST 15 YEARS IS nOT REALLY THE SUBJECT OF DEBATE. NOR IS THE REAppEARAnCE OF A MIDDLE CLASS, (WHICH ALMOST DISAppEARED DURInG THE LAST pART OF THE TWEnTIETH CEnTURY), MUCH OF A TALKInG pOInT THESE DAYS. HOWEVER, HERE WE EXAMInE A nUMBER OF OTHER, MORE RECEnT DEVELOpMEnTS ECOnOMIC, BEHAVIORAL AnD SOCIOLOGICAL THAT ARE CURREnTLY IMpACTInG UpOn BRAnDS In PERU.

By Claudio Ortiz, Managing Director, Millward Brown Peru

THE SUCCESSFUL DEFENSE OF SOME LOCAL COMPANIES There are many examples of local companies that have managed to maintain a strong position in the local market (despite the presence of some global giants), and are also becoming global themselves. This raises the question of why the giants themselves have not been as successful in this market as in the rest of the countries of this region. The answer is that the Peruvian product breaks through by being supported by local consumers (loyal to the local product) and by globalization; it has its own models, which are now becoming successful abroad. INtERCItY DIVERSItY Besides the three strips, (the Coast, the Andes and the Jungle) huge differences are to be seen in the consumption habits among the various cities of this country (together with a certain homogeneity within each of them). Thus, you could conclude that for many categories, the leading actor in one city could be simply irrelevant in a nearby city. The conducting of continual brand surveys in nearly 20 different cities may be a key to success for companies which do not think of Latin America as a country (with Buenos Aires or Mexico City as its capital) or of Peru as an extension of Lima. THE SPEED OF CHANGES IN BEHAVIOR AND tHE IMPORtANCE OF WORD OF MOUtH Even in the past, you would see sudden changes in the market share of some categories where the main driver was a word-of-mouth rumor: Its not good anymore or It seems they changed its flavor are phrases that could generate significant behaviorial changes that were very hard to reverse. This, in a market that is adapting rapidly to digital processes and virtual social networks, is an increasingly important factor. THE MILLENNIALS IN PERU Because the economic resurgence happened when todays youngsters were just babies, the generation gap appears to be even greater. For the first time, Peru faces a transversal generational phenomenon. Young people with a millennial attitude have grown up in a society that, despite still being poor, has grown continuously and this has happened in a context where parents raise their kids trying to forget the past. The effects of this social revolution are just beginning to be seen. THE NEW SOURCE OF ECONOMIC GROWtH IN PERU Although the local economy is not growing as quickly as in the previous decade, it remains healthy. A couple of years ago, this growth started to be noticeable in the provinces. Now it is the turn of Arequipa, Huancayo, Trujillo and Piura (among others) and it is clear that consumers in these cities are quite different in regard to their behaviors, values and, a lot of the time, their choice of brands. What should brands do to engage with such a diverse consumer? What should they do in this era of evolution, as we face the challenge of the digitalization of brand communications? These perhaps are the key questions marketing will have to answer in order to keep brands growing in this society.

Perspectives
PRODUCED BY Miquet Humphreys, Baljit Thandi, Katie Pearce, Ben Marshall, Dede Fitch Global Communications and Marketing Mike Agee, Lisa Parente, Michael Almon, Amanda Bruhn Global Brand Marketing Dominic Twose Knowledge Management

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Millward Brown experts are available to speak globally. Please contact:

Global - Baljit Thandi Baljit.Thandi@millwardbrown.com

North America - Jamie Jones Jamie.Jones@millwardbrown.com

Millward Brown 2013