UK Consumer Confidence dropped by one point in July 2018 to -10, despite increases in both measures for people's personal financial situation.
We ran different ad tests during the World Cup, including using biometric testing on 21 ads. The ad that ‘won’, in terms of greatest subconscious and conscious audience response, was the Ladbrokes’s advertisement, which is driven by verbal and visual humour. But what was it that resonated so well with the audience?
According to a recent study published in the journal ‘Cerebral Cortex’, visual humour engages parts of the brain responsible for vision, and verbal humour activates the language-processing areas. These big brain areas tend to be in different hemispheres of the brain (with some exceptions) – so an ad that is working both on a visual and linguistic level is engaging both hemispheres.
Engaging both sides to the brain in a positive way (we confirmed positivity via the subjective accounts viewer gave to the Ladbrokes ad) improves the ad’s efficiency in grabbing and holding viewers’ attention, and creating a lasting impression of the brand.
Advertising needs to resonate with the audience’s current mood. While it is very hard to predict this in general, it is much easier with audiences focused on a major event. For ads aired before and during a major sporting event, for example, the audience’s mood is likely to be social, enthusiastic, emotional, and so forth.
In our test, the ads that were projecting a relaxed state of mind with representations of peaceful lifestyle elements performed very poorly. They were not in line with the audience’s prevailing mood at that particular time and therefore triggered very little subconscious engagement and subjective liking.
Similarly, such events are not the right context for ads that need the viewer to try hard in order to ‘get’ the joke or decipher the puzzle. People geed up for a big social event, and very focused on that, don’t want to be distracted by complex advertising. They respond better to the more obvious, or ‘slapstick’ type humour that doesn’t take their attention off their main purpose for watching.
Any threat to our self-esteem triggers withdrawal or prompts us to push back in defense of who we are. Therefore, advertising needs to be careful with any type of humour that is directed at people’s daily habits.
This is especially so for audiences who are in a social, festive mood in anticipation of a big sports event; they are not in the mood to see humour in the mundane, awkward moments in their lives.
In our test, the ad that portrayed that type of humour triggered relatively high emotional engagement, but the conscious responses showed it to be mainly negative. In fact, it scored 15.77 points below the average ‘performance score’ of all the ads tested before and at half time – which is a significant underperformance. In addition, it had only around half the amount of peak moments of strong emotional reaction compared to the average seen during this test. The ad was out of kilter with that audience’s present mindset and mood.
Humans love to join the dots. We are intrigued by the lack of connectedness, because we are driven to make the connection – and this holds true in advertising. While we are intrigued by disjointed scenes, or unexpected pauses in the music or visual frames, we have a certain threshold of tolerating this. This threshold is even lower during times of emotional turbulence when the audience’s minds are focused almost wholly on anticipating a major event, such as a big sports game.
Again, our test showed that ads that include high levels of these elements (70% of the total copy) can prompt frustration and disengagement in viewers. In particular, the ads that showed partial body parts – i.e. legs or arms shown only partially – or where the music or visual element was interrupted for more than a second during the ad, scored up to 20 points less than the average performance score for all the ads tested. In addition, these ads triggered hardly any peak moments of strong emotional reaction, performing up to 40 points below the average for this metric, in this test.
By layering stated responses with biometric testing, we can deliver strategic and tactical recommendations that are much more future-proofed. We find out not just what people say, but how they instinctively react – giving us the ‘what’ and also the ‘why’ on both conscious and subconscious levels. By analysing these layered findings, we get a holistic, as opposed to a one-angled, understanding of human behavior and human receptiveness in different situations. And that means you can do more successful planning, based on this better understanding.
For advertisers, the key message is that an ad that performs well during a ‘normal viewing’ situation could fail to resonate if screened around a specific type of event, where the audience is in an elevated frame of mind. To make the most of prime-time advertising, such as around a major event, we need to project the audience’s most likely mood and ensure the proposed ad dovetails with all the connotations of that mood.
GfK and Shimmer, a leading provider of wearable wireless sensor products, monitored the physiological responses of around 50 participants as they watched the live France-Peru World Cup game – including watching 21 advertisements from a variety of product categories that were shown before the game or at half time. The physiological response was recorded via a biometric device, which sits on a participant’s wrist and picks up the signals via two non-intrusive electrodes. As well as tracking the audience’s second-by-second skin response and heart rate as each advertisement played, GfK also recorded their stated response to each advertisement at the end of the session.
Findings of the GfK Consumer Climate Study for July 2018
We ran a test recently on some ads that were airing in the UK during the World Cup, all from the same product category (consumer electronics). Some of the advertisers were official World Cup sponsors; others had an alternative football sponsorship association – and we evaluated them using a new pre-test methodology that was co-created with major advertisers.
All the ads employed a football theme and the results from our unforced exposure method proved this to be a strong hook that attracted – and held – viewer notice equally well across all the ads. Strong and consistent brand name presence in each ad also led to the viewers correctly recalling which brand each ad was promoting.
However, one key thing was not quite right in the majority of these executions. While the product was always clearly shown, it was not always the hero of the ad. The football theme was the dominant attraction, which meant that viewers too often lost sight of the product’s actual features and benefits. Ultimately, the connection between the product and the sport was not always clear to the viewers.
Even more crucially, most of the ads were not driving a direct or indirect call to action – be that an interest to learn more about the product or brand, or a desire to go out and buy one.
In this test we only focused on a small proportion of each brands’ advertising activity around the World Cup – however, it’s always worth remembering that, while a brand may be relevant to the event it sponsors, that relevance needs to be clearly communicated to the viewers, in order for the brand to benefit.
Our Ad FIT method identified that the strongest performer for an ad that fascinates (grabs and holds viewers’ attention), imprints (leaves a positive, branded lasting impression) and triggers (generates a direct or indirect response from viewers) was not in this case the most ‘exciting’ execution. It was the one that clearly communicated the product’s benefits in a way that was relevant to the ‘big sports event’ theme – thereby driving a timely desire for the product.
Read our linked press release: Humorous ads trigger greater response than sporty ads screened around a World Cup game
For more information on how you can increase your ad performance with AdFIT pre-launch testing, please don’t hesitate to contact us.
Findings of the GfK Consumer Climate Europe Study for the second quarter of 2018
Promotional events are gaining more and more importance across the whole world – and Latin American tech markets are among those showing the strongest impact. These events are changing traditional seasonality and concentrating yearly sales volumes in a few weeks. This is why it is of utmost importance for manufacturers to plan well and participate successfully in these events.
It is not only about Black Friday, but there is a multitude of different events, most of which are in Q2 and Q4. While Brazil focuses on Black Friday in November, following the US model, other South American countries have created purely online events in order to push online sales – the most successful ones are Hot Sale and CyberMonday in Argentina and Cyberdays and CyberMonday in Chile, which make online sales boom. Peru and Colombia are increasingly starting to follow these models. These “new” events take place in addition to the traditional ones, such as Mother’s Day, Father’s Day and Christmas promotions, and in most cases outperform them. They even “outperform” traditional climate-related seasonality. For example, in Argentina and Chile, the second most important week for refrigerator sales is now in winter (off-season) and vice versa for washing machines.
With +29%, the market volume of technical consumer goods this year topped the 2017 growth during Hot Sale week, despite macro-economic challenges. The sales volume in Hot Sale week was more than double of the average week in Jan-Jun18, concentrating 8% of sales. With +84% growth, PTV was by far the most successful category, which can mainly be explained by the soccer world cup effect.
During this year’s Cyberdays, the technical consumer goods market grew again by 20% (units), with small domestic appliances, consumer electronics and major domestic appliances growing above average. Small appliances growth is coming from vacuum cleaners (+54%). The Cyber events created the perfect platform for selling robots, which showed huge increases. One third of the robots’ sales volume in first half-year was sold during the Cyberdays week. The value share of online channel within total tech market in Chile soared to 20% in the first semester and even 59% in Cyberdays week.
In Peru the traditional Mother’s Day remains the most important week in the year (equal to Christmas), with double sales volume compared to the average week in the year to date. Yet it also increasingly shifts to online. Although the product focus is slowly shifting, it seems as if many Peruvian women do not yet feel offended being offered home appliances for Mother’s day, as small and major domestic appliances showed again the highest sales peak. This year consumer electronics increased by 23% during Mother’s Day. This trend is seen throughout the whole year 2018 and it became stronger week by week. The main reason is obvious: After 36 years Peru qualified for the soccer world cup in Russia. In order to be able to follow well their “selección”, many Peruvians invested in new TVs.
Latin American consumers tend to be very price sensitive, which is why strong price cuts are key to success of promotional events in the region. This makes it very important for manufacturers to decide carefully how much to decrease the price, in order to participate successfully without sacrificing more margin than necessary. Most aggressive price cuts can be observed in Chile, with almost one third of all units sold with >20% discount.
However, the average prices per category often increase in promotional weeks, thanks to a strong push of premium segments. Especially during the online events, the share of ultra HD TV, ultra-thin laptops, wash dryers, side-by-side refrigerators or kitchen machines increased by up to 15 percent points, compared to an average week.
After all this recent promotional activity, it is not at all over. Important promotions are still coming at the end of this year, mainly from Black Friday and Cyber Monday, as well as Christmas promotions.
What is the best strategy to optimize your sales in these promotional periods?
The GfK Weekly Promotional Events Tracker helps you to figure out:
For more information, please contact us: Daniela.firstname.lastname@example.org
We are inundated with tech solutions for our daily lives that are fast, easy to use and help to reduce time spent on the mundane. Having used pricing tools for over 10 years, it has always been an observation that pricing tools were a “one size fits all” solution to a very integral business issue. So what should we really be focusing on when selecting a pricing tool?
The fact is that not all online pricing tools are born equal – so how do you filter out the ‘also rans’ to find the front-runner that delivers the very best market analysis for you?
Firstly, it’s easy to get distracted by a professional-looking user interface and fail to ask ourselves about the underlying data and analytics. Accurate data of the highest quality and comprehensiveness is essential… incomplete or poor data leads to poor analysis, which leads to poor business decisions.
So ask yourself: when you peel away the theatrics, are you willing to trust your company’s future on the data and analytics being delivered? What are data sources? Are they comprehensive?
The next thing is speed. As multiple intra-day price moves become normal, the speed at which your solution can provide your data is essential.
So look beyond the load speeds of your tool, and instead ask your supplier how frequently the data within your tool is refreshed each day. Is once or even twice a day really enough, when prices in the market are being changed multiple times a day?
After you’ve satisfied yourself the tool you’re considering fulfills these fundamental needs, it is time to consider the usability and functionality being offered.
We all need tools that are easy to use and that deliver the information we need in the format we need it in. Gone are the days of software solutions that fail to reduce the time we spend on the mundane.
So ask yourself: Can you customise your view of the data? Can your tool inform you when key changes that affect your specific parameters have happened in the market? Can you see beyond basic pricing and search on features, promotional activity or anything else that is pertinent to your business?
If you can’t do these things, you may find you are not getting the value out of your tool that you hoped for – or find yourself wasting valuable time getting your data into the format you want and delaying the speed at which you can make your critical pricing decisions. Didn’t you pay for this tool to simplify things?
A high-performing, high quality online pricing tool will give you more time and better market analytics on which to make your business decisions. To find your best-fit tool, speak to your provider about the requirements I’ve outlined here – and any additional needs that you want your tool to fulfil – and challenge them to push the boundaries and deliver on these. As artificial intelligence (AI) and algorithms get used more and more to complete huge chunks of analytics, our online pricing tools will continue to develop and improve at a rapid rate. So make sure you tie-in with a provider who is also planning and developing for the future.
To find out more, please contact Barry Meacher
The trade conflict between the EU and the USA is intensifying and leaves a clear mark on the consumer mood in Germany in June.
European consumers spent 30.5% of their available funds for private consumption on brick-and-mortar retail in 2017.
With summer fast approaching – yes, it officially started on June 21st – Americans once again will be vacationing in record numbers. Recent forecasts estimate that over 246 million passengers will fly domestically between June and August (which averages to over 2.5 million per day).
Flying of course is not the only travel option – with road trips being a normal part of the American genre. In fact, according to recent research from GfK Consumer Life, 67% of US leisure travelers have done so in a vehicle (vs. 54% traveling by plane).
As more consumers look to travel, services such as Airbnb and Couchsurfing have become more popular – allowing many travelers to specifically land on what type of vacation they truly want. Here are three current travel trends that brands can leverage to further attract the traveler target.
Six in ten Americans now feel “the places where you spend your vacations” is an expression of themselves. This is now ahead of “the home you live in”, which has historically been on top when comparing both attributes (though consumers, led by Millennials are moving away from placing importance on the home).
According to Airbnb’s own travel data, top destinations within the US are still considered mainstays (i.e. ‘tourist-y’) – places like New York City, Orlando, etc. However when looking at top trending destinations – those that have increased the most on searches and bookings from 2017 to 2018 – a different picture emerges. Middle American cities such as Indianapolis, Minneapolis, and Columbus, OH move towards the top of the list – one can assume that travelers are undoubtedly looking for a different experience in these places. The psyche of ‘been there, done that’ and/or ‘taking it slow’ could definitely be emerging among consumers. In addition, the ‘value for dollars’ equation probably gets solved easier when visiting places that are undoubtedly more affordable.
Americans are also acknowledging that the world is rapidly changing today: 21% cite ‘global climate change’ as a top-three concern (from a list of 21), and +6 pts from just 2015. In turn, another travel trend that has gained popularity is the notion of ‘last chance’ tourism – visiting a place before the relevant experiences, or the destination itself, is gone forever. Many tourists have visited the Great Barrier Reef in Australia to see it “before it’s gone”, which may or may not happen anytime soon. Cuba has experienced increased tourism recently – with the idea that the native culture within the country might change if and when more Americans start traveling there. Authenticity (i.e. a feeling of ‘realness’) always seems to have a place within consumer sentiments – nearly seven in ten American feel authenticity as a ‘personal value’ is extremely/very important (consistently ranking it in the top-five among a list 50 personal values in recent years).
The novelty factor will continue to be a hook for travels, as 69% of Americans agree, “I am always eager to see new places and do different things”. On the domestic side, a few US national parks are playing into this trend.
Think of the last time you shared your travel experience with someone (or vice versa) – questions like “how was the food?” and “where did you eat?” were probably a part of the conversation. Well then, it’s probably not a surprise that 70% of Americans travelers agree, “I always like to experience local culture and foods when I travel”. And now, newer experiences such as food tours and cooking classes are increasingly sought after by travelers (Tripadvisor says both experiences rose ~50% in 2017 among US travelers). Coinciding again with the ‘sharing economy’ or ‘access economy’, offerings such as Meal Sharing and EatWith also allow for more local & authentic food experiences.
As most of us all like to travel one way or the other, expect more and more consumers to curate the travel experience they truly desire. Companies can leverage these three areas of opportunity and offer solutions that will continue to appeal to the traveler mindset.
A major sporting event offers a fantastic opportunity for manufacturers and retailers to take advantage of an increase in Television viewing and general spending amongst fans. No other event offers a greater opportunity than the FIFA football world cup.
With the tournament kicking off in Russia this month, May and June represent crucial months for sales in the UK TV market. Our forecast is that 814,000 TV’s will be sold in the UK over these two months – an increase of over 20% against the same period in 2017. To win the lion’s share of this opportunity, TV manufacturers and retailers are focusing hard on competitive pricing and promotional activity to entice shoppers.
World Cup themed promotions are very evident online, with a large number of major retailers pushing promotions and football themed messaging on both category and product web pages.
In addition, many are focusing on premium ranges, with promotions of larger screen sizes (55+ inches) and the latest high-resolution technologies (4K/UHD), to bring the stadium atmosphere in to the living room. In a market that has been showing a steady decline in the number of units sold over the last years, this strategic focus on promoting higher-end products can deliver increased margin levels and profitability.
Throughout May 2018, the average selling price (ASP) of a 55 inch 4K/UHD TV was over £1000. Although this is still a significant outlay for the consumer, it is 23% lower compared to last year. We have also seen similar ASP decreases with other screen sizes, such as the 43-49 inch category, which is, on average, 15% cheaper in May this year than a year ago.
So overall, we are seeing a market focus on promoting higher specification units at a price that makes them a more affordable proposition for customers looking for an upgrade.
On the day of writing, the average TV retailer has 54% of its range on promotion. Within that, the online specialist retailers are showing the largest offers for UK shoppers, with retailers, on average, offering promotional cuts of 21%, whereas major high street retailers are offering 11%.
Discounts on larger screen TVs and the latest display technologies look set to bring the World Cup experience closer to home for UK football fans – but will more TV sales move online this month? And will World Cup promotions help to drive growth of over 20% against last year? Watch this space for our next update.
To find out more, please contact Barry Meacher at Barry.Meacher@gfk.com or Daniel Wellman at Daniel.Wellman@gfk.com
Source: GfK Online Pricing Intelligence (OPI) – May – June 2017 and 2018 and GfK’s ‘The World Cup & TV sales – What’s the real impact?’
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