International Marketer’s Blog

Global spending on advertising in 2010 is forecast to increase more than expected compared to last year, according to WPP-owned advertising agency GroupM.

The agency has revised its global ad spend forecast for measured media this year to nearly $451 billion. This is up 3.5% compared to 2009 rather than the 1% growth predicted by the company’s last forecast, released six months ago.

Growth in ad expenditure will not, however, be universal, it was reported in Ad Week. GroupM said that US ad spending is expected to decline 1.3% in 2010 to $145 billion, albeit a less steep drop than the previous forecast of a 4% decline in spending in North America (most of which is in the US).

“The US media marketplace clearly bottomed out earlier this year and we expect moderate growth in 2011 consistent with [gross domestic product] improvement,” said Rino Scanzoni, Chief Investment Officer at GroupM. He added that television and online spending will outpace other media, attracting marketers with return on investment metrics enabling cost-effective marketing campaigns.

The picture is brighter in the BRIIC nations (Brazil, Russia, India, Indonesia and China), where healthy ad spend contributes significantly to the new global forecast. (more…)

Singapore companies are showing willingness to increase marketing campaign costs, with almost half having increased their marketing budgets for 2010 from the previous year.

According to a new survey, more than three quarters of the respondents indicated that their marketing budgets had increased (44 %) or stayed the same (32%) compared to 2009.

The research also found that more Singapore firms are using social media as part of their marketing strategies. Almost half (45%) of respondents said that they have allocated a greater proportion of their marketing budgets towards new marketing channels such as social media, social networking and interactive digital media.

This is not to the detriment of more traditional uses of online marketing tools: the majority (90%) of Singapore companies continue to use their web presence primarily as a means of informing users and providing company information.

However, a sizeable 71% of respondents are now using online channels to actively generate leads. (more…)

Last autumn, German carmaker Volkswagen chose to launch its new 2010 Golf GTI Mark VI in the US exclusively via a VW sponsored version of an iPhone app, a strategy that delivered success for Volkswagen and which will have resonance with global brands looking to innovation in order to deliver efficiency of international marketing campaigns.

According to the brand’s agency AKQA mobile, the application itself is essentially a VW-sponsored version of Australian developer Firemint’s Real Racing, a popular driving game on the iPhone platform. The “Real Racing GTI” version focuses on the VW GTI model and features VW branding throughout. Users are encouraged to actively engage with the brand through racing in variations of the VW GTI and view content detailing features of the model.

According to the report in online publication ClickZ, users were also invited to use the iPhone’s geo-location function to locate their nearest dealer, and to share their best times and scores online. That data, enabled AKQA to directly trace purchases of the model back to the iPhone application itself. (more…)

Research firm Forrester interviewed senior executives from 13 corporations including Anheuser-Busch InBev, Kimberley-Clark, Levi-Strauss, Mercedes-Benz and Pernod-Ricard recently to establish their current views on marketing. It found that the vast majority (75%) were expecting to undertake substantial reforms to their marketing functions by the end of 2011, due to factors such as the economic downturn, the rise of digital media, and increased media fragmentation.

Coca-Cola and Vodafone are just two global players which have already embarked upon such plans to improve marketing efficiency. According to Forrester, brands looking to transform their frequently “maladaptive� structures will have to identify the most appropriate overarching business model, whether that be “totally global�, “totally local� or “somewhere in between.�

This will involve in-depth analysis of the marketing process and international brand implementation. “This will be the year in which marketers get their house in order by forging internal consensus around a global strategy,â€� predicted Steven Noble, an analyst at Forrester. He suggested that most brands with an international reach have failed to leverage what this can provide in terms of efficiencies – within marketing supply chain management, for example. (more…)

According to a report in Adweek, global car manufacturer Ford is the first marketer to create banner ads using Google’s new display offering which runs ads according to the nature of websites, in order to increase their relevance.

The car company has created an interactive banner ad campaign using a technology called Search API DoubleClick Rich Media, which Google has been able to develop since its acquisition of online display ad giant DoubleClick in 2007.

Meanwhile, the search engine giant is keen to cash in on projections of increased spending on display ads as the global economy recovers from recession. It has been widely reported this week that YouTube has seen a surge in display advertisers in recent months.

Scott Kelly, head of Ford’s digital marketing, said that Google’s technology has automated a process that would otherwise be extremely labour-intensive, thereby creating increased control of marketing spend. “This is the first time we can take search targeting and put a brand wrap around it,â€� he said. “Google can scan through our websites and create ads on the fly and get them out in a really relevant way.â€� (more…)

A special report in The Financial Times this week, looking at this year’s BrandZ survey, which is compiled by WPP subsidiary Millward Brown Optimor (MBO), highlights the importance of technology and emerging market brands.

“Google remains the world’s most valuable brand, but edging up close behind it are two other technology companies, IBM and Apple,� says the report. Technology is now the defining characteristic of seven of the top 10 brands, it says, with Coca-Cola, McDonald’s and Marlboro making up the other three. Other brands in the top ten are Microsoft, China Mobile, General Electric and Vodafone.

This shift towards technology is a reflection of the importance of the internet and communications in the fortunes of many companies. It signals the need for efficient, streamlined and innovative management of global marketing communications – employing multi-market digital expertise, high local relevance and brand consistency.

Compilers of the 2010 BrandZ Top 100 ranking also noted the growing importance of brands from emerging markets. 13 of the top 100 brands now come from emerging markets – with seven from China, two each from Brazil and Russia, and one from India and Mexico respectively. (more…)

International courier company DHL today kicks off a global campaign targeting business decision makers, and tagged “Excellence. Simply delivered.” It has also put in place a new agency arrangement designed to increase the efficiency of its international marketing campaigns and to streamline the marketing process.

The multi-channel concept includes ads in worldwide media and product campaigns in print and digital formats. TV ads for international broadcast, for example, will be supplemented by flyers, mailers, banners and tactical local advertising. The creative will run in 21 countries, and in 16 languages.

The advertisements will launch on platforms such as the BBC, CNN, Fortune, The Economist and Time across Asia-Pacific, Eastern Europe, Middle East and Africa – including China, Hong Kong, India, Saudi Arabia, Turkey, Russia and the United Arab Emirates.

“This comprehensive approach guarantees a uniform brand presence and at the same time creates synergies between the individual marketing activities on a global scale,” said Christof Ehrhart, Executive Vice President, Corporate Communications, Deutsche Post DHL. “We also made sure that global advertising resources could be utilized effectively at the local level.” (more…)

According to a Forrester report released this week – entitled “How to manage global marketing” – moves to restructure international teams will become increasingly common over the coming months as brands seek to take control of marketing spend, and to leverage growth opportunities, via increased efficiencies.

According to the report’s author, Steven Noble: “Brands must harness the strength that comes from their global reach. This includes their ability to harvest best practices which they can apply worldwide [through local teams].”

He stresses the need for regional marketers to continue to apply insights according to each individual market, but to recognise alongside this also the importance of avoiding a dogged insistence on operating according to often age-old systems and processes which are not necessarily streamlined across the organisation.

“There is a natural tendency for local marketers to attempt to create silos – to insist on operating their way because that’s always been their approach,” he says. “The challenge is for local marketers to stop simply insisting the global marketing fails, and to start using customer data and engagement to deepen the brand’s relationship with customers who happen to live in their geography.”

For a long time, the internal workings of many advertising and marketing agencies, like their clients, have not been geared towards optimal efficiency. In the context of the global financial crisis, this simply cannot continue. (more…)

Last Autumn Mars announced that it had embarked upon a strategic plan to designed to align its core global brands in major markets under a single creative agency. The moves form part of an overall drive to increase the efficiency of its international marketing campaigns.

As part of these plans, Twix has handed its global brand duties to TBWA\London. Previously the business was split between SapientNitro, which handled Asia, Eastern Europe, Latin America and the US, and TBWA, which covered Western and Central Europe.

Bruce McColl, global chief marketing officer of Mars, explained that the latest move towards a more consolidated marketing approach would help with the multinational’s international brand implementation. “We feel that aligning each core brand under a dedicated global agency will more effectively build global communication platforms,� he said.

Mars and its myriad brands once had different agencies representing it in different parts of the world. According to a report in Advertising Age this week, Marlene Machut, a Mars spokesperson, has said that the company is still examining its agency roster in order to determine its next moves. It hopes to complete the efficiency drive by the end of next year.

Global soft-drinks giant Coca-Cola is overhauling its European marketing operation as part of a review of the wider business. It has said that it has informed employees of “plans to simplify the structure of the business to improve efficiency and effectiveness.�

Up to 150 staff could be affected in the consultation, which covers the 38 countries in which Coca-Cola Europe operates. Dominique Reiniche, president of Coca-Cola Europe, said that the changes were designed to simplify operations and to make the multinational more efficient. He said that the restructure would allow the international brand to become faster to market, and allow it to increase the scale of its activities across Europe.

One expected outcome – according to Brand Republic – is that Coca-Cola will make London the hub of its European marketing operations, with some Great Britain and European roles, which are currently carried out separately, becoming the responsibility of one person. The efficiency drive could also lead the company to seek full service marketing agencies, thereby helping it to streamline the marketing process. The brand currently works with several advertising and marketing agencies – such as Carlson Marketing, Mother and VCCP – but increased centralisation could help it to drive the efficiency of international brand management and campaigns.