Motorsport fandom is strange. Back when I was a child motorsport fandom was a bunch of anoraks – literally. There was a category of clothing that you could buy from mail order catalogues and retailers like Demon Tweeks called a rally jacket. This was a coat good enough to deal with some cold wet weather branded by a car company or a tobacco brand.
Motorsport fandom, in particular single-seater race series are starting to see very different types of fans who learned their supporting ideas from the K-pop armies which are a symbiot of the artist promotion machine. While both promotion machine and fans are separate with very different tactics, they were united by a common goal to a point.
This isn’t the first time that media has brought in new fans, gaming created fans in the past. But the current motorsport fandom is interesting because of the cultural friction that it brings for drivers and legacy fans. From hate campaigns and death threats against drivers to ‘idol’ style objectification – women are demonstrating traits that would define toxic masculinity. All wrapped up in pastel tinted social media posts and Etsy products – so that makes it all fine, doesn’t it?
WPP has its next CEO – but what do clients make of heir apparent? – It’s not indifference. It’s pragmatism. Marketers like this don’t want to buy into the idea that a leadership change signals sweeping transformation. After all, Rose doesn’t start until September. Until then, they’d rather stay focused on the present, not the promise.
Ryan Kangisser, a bellwether for client perspective thanks to his proximity to them as the chief strategy officer at MediaSense, expanded on the point: “I do think that often the industry cares more about these sorts of appointments than clients do. Especially if clients have got a really solid client lead, or business lead, then they’re the people who they feel are the ones driving their business.”
The rise of luxury wellness comes down to a convergence of different factors that have reshaped both the luxury and wellness industries.
Products ain’t what they used to be
Existing high-end health and luxury wellness
Luxury wellness and consumer behaviours
Wellness has become blended with health, providing opportunities for luxury brands.
GLP-1 changed everything
Products ain’t what they used to be
Before we dive into luxury wellness, it’s helpful to understand where the luxury industry stands at the moment. The strategies that have worked since the early 1980s now seem to have come unstuck. To make sense of this shift, it’s worth reviewing the past and current landscape.
The new luxury
There’s a perception (which I believe is largely false) that the traditional attributes of luxury have fallen by the wayside. Scarcity, quality, craftsmanship, design, and heritage are thought to no longer matter.
A classic example of this viewpoint is Jaguar’s attempt to discard its heritage and reinvent itself as something new. I would argue that while Jaguar may have been prestigious in automotive terms, it was never truly a luxury brand. Jaguars suffered from quality issues that should not have occurred, and they struggled in the premium segment of the market, remaining loss-making for years. Whether or not Jaguar will succeed in transforming into an electric competitor to Rolls-Royce remains to be seen.
Another aspect to consider is how global supply chains can now deliver products of comparable quality to those made by artisans. I have a bit more sympathy for this viewpoint. However, these global supply chains were originally trained to act as subcontractors for luxury brands that pursued massification, cutting quality standards along the way.
Consumers seem to undergo a ‘luxury maturity journey’. This journey is accelerating in certain markets. What Japan experienced over 30 years, China went through in just 10. Countries like Thailand are even moving through this journey faster. Over time, consumers in these markets have begun to move away from obvious logos and status symbols to place greater value on quality and experiences. This shift partly explains why quiet luxury is gained traction around the world.
In countries like China and India, local artisans and ateliers are highly appreciated. This shift means that historic luxury brands are likely to face disruption, just as other sectors have been transformed by Chinese firms. And this is happening at a time when many luxury brands are becoming less ‘luxurious’ by opting for a global mass-market approach.
The pioneer in this approach was fashion designer Pierre Cardin.
Pioneer Pierre Cardin
Luxury went downmarket through licensing, a strategy pioneered by fashion designer Pierre Cardin. In the early 1970s, he saw the potential of licensing, recognising that the demand for goods bearing a fashionable name presented a lucrative opportunity. Cardin’s insight was that luxury goods, in the post-war economic boom, were no longer only for the ultra-wealthy but also for the middle class. His brand signed over 850 agreements in 140+ countries, covering everything from clothing and accessories to furniture, household products, cars, and fragrances.
The ubiquity of Pierre Cardin products diluted scarcity, quality, and blurred the brand story. He later repeated this process with French restaurant Maxim’s, demonstrating that luxury was as much about experience as it was about the product.
When you could buy a Pierre Cardin wallet or suitcase from Argos, what did it say about you? It certainly wasn’t a great status symbol. Other brands, like Ralph Lauren, did a better job of choosing their licensees.
LVMH leads the way
Bernard Arnault supercharged a formula for Louis Vuitton that Henry Racamier had pioneered when he built out an international network of Louis Vuitton-owned boutiques, including Tokyo and Osaka, Japan by 1978.
Racamier’s formula consisted of two parts:
Louis Vuitton sold to the middle class as well as the very wealthy.
Louis Vuitton controlled its products route to market offering control over the experience, premium pricing and perceived aspects of scarcity.
For the next four decades, LVMH went on a remarkable growth trajectory, acquiring luxury and beauty brands, duty-free retail, and even hotels. LVMH rode the rise of Japan, up to the end of the bubble economy, then moved on to Korea, Singapore, and Hong Kong. China’s luxury market skyrocketed when the country joined the WTO, solidifying its place in the global economy.
The United States continued to be a steady consumer of luxury products.
During the 1990s, French retailer Pinault-Printemps-Redoute (PPR), now known as Kering, began replicating LVMH’s success, starting its own luxury conglomerate with the acquisition of Gucci in 1999. Meanwhile, Richemont acquired a number of legacy luxury brands as an adjunct to its predecessor’s tobacco business in the early 1990s and then continued to build.
The internet expanded access to luxury products through multi-brand retailers like Net-A-Porter and Farfetch, driving significant growth. These online retailers competed with top-tier department stores like Bon Marché, Lane Crawford, and Harrods, who slowly built up their e-commerce capabilities.
Eventually, brands embraced direct-to-consumer online stores to complement their global networks of boutiques. This shift is why newer mass-market multi-brand online boutiques have struggled:
Matchesfashion went into administration and took Browns with it.
Farfetch was sold in a firesale to Korean e-tailer Coupang.
YOOX was merged with Net-A-Porter and eventually bought out by MyTheresa from Richemont.
Even luxury brands themselves have encountered a few hurdles along the way:
The end of Japan’s asset bubble in 1992
2008 financial crisis
Xi Jinping’s move towards common prosperity which peaked in campaigns during 2013 & 2021
COVID-19 and post-COVID economy
Luxury sector fallout
By mid-2023, the luxury industry started to show signs of stagnation, with low or no growth. Multi-brand luxury e-commerce sites either went bankrupt or were bought out. A few notable beneficiaries included:
Mytheresa – a German e-tailer that focused on the wealthiest clients in this sector rather than broader middle class appeal.
Hermès – who are focused on the high end of the luxury market.
Brunello Cucinelli – a focused ‘quiet luxury’ brand known for their high-end cashmere garments
The key issue with many luxury brands (Burberry being a prime example) is that they lost the essence of what made them truly luxurious. As they shifted from style to fashion, and from artisan craftsmanship to mass production in China, they lost their uniqueness or incomparability as Jean-Noël Kapferer put it.
While champagne can only come from the region around Reims, most Burberry products are made in China, with only two remaining factories in the UK, including a textile mill.
The key issue with many luxury brands (Burberry being a prime example) is that they lost the essence of what made them truly luxurious. As they moved from style to fashion, and, artisan to Made In China – they lost uniqueness or incomparability as Jean-Noël Kapferer would describe it.
While champagne can only come from the region around the city of Reims, most Burberry products are made in China as well as a couple of remaining factories in the UK – one of which is a textile mill.
A second aspect of the change was blurring the line between streetwear and luxury brands. Luxury looked cheap and streetwear looked exceptionally premium. The nadir was Balenciaga’s collaboration with sports apparel brand Under Armour.
Ways forward
Given that the mass growth of luxury products has hit a ceiling, what options do luxury companies have?
The focus has been a slow pivot to services and experiences. For instance, Panerai has the Panerai Xperience Programme where purchasing a limited edition watch gives you access to unique experiences, such as training with US or Italian special forces operators.
LVMH owns three luxury hotel chains: Cheval Blanc, Bulgari Hotels & Resorts, and Belmond. Dior has spas in Cheval Blanc Paris and other non-LVMH hotels like The Dorchester in London. The increasing focus on wellness makes sense for luxury conglomerates.
Given the challenging circumstances in the luxury sector, Infosys’ outlook for luxury wellness presents a tempting opportunity. The global premium and luxury wellness segments have been performing well. The global market for luxury items was valued at approximately $366.2 billion in 2023 and is projected to expand at a CAGR of 6.8% from 2024. By comparison the Swiss watch industry is projected to grow by less than three percent.
Existing high-end health and luxury wellness
Luxury wellness has already been well established, there high end spas and resorts are in numerous countries, in particular Switzerland and Germany. Some of these are within large hotel groups like Mandarin Oriental.
There is also a range of multi-generation family owned businesses with low-key brands and expertise that would be hard to replicate. Some of these businesses may go back as far as the middle ages. For instance, Grand Resort Bad Ragaz can trace its history as a source of ‘health and vitality’ since 1242.
German doctor Alexander Spengler was responsible for attracting rich medical tourists to Switzerland in 1853, convinced of the benefits of clean mountain air.
Switzerland, in particular, started to benefit from an agglomeration of medical expertise; for instance Davos was known for specialising in pulmonary health with dedicated spas.
Switzerland’s continued lead in private healthcare has had a positive knock-on effect in wellness related products and services. This is particularly apropos given Swiss offerings focusing on longevity.
In marketing terms ‘Swiss formula’ is used to sell St Ive’s beauty products and a range of multi-vitamin products by various brands. St Ives has an American origin, being part of Alberto Culver, which was then bought by Unilever.
While Spengler was enamoured with Switzerland, Germany has a long history of health resorts especially thermal spas. It also has a network of world-leading private medical clinics similar to Switzerland.
German high-end health resort company Lanserhof is a relative newcomer. Over four decades they have progressively built their offering with a strong focus on longevity.
Luxury conglomerates have an opportunity, and are used to accumulating small family brands. But it it is a long term project for them to go into the market place. Blurring the line between its beauty products and wellness is an easier ask, hence, Dior’s spa offering.
Gulf countries are looking to provide services in this area and have made big strides in building capability to attract medical tourism, which is the backbone from which a country brand in luxury wellness can be built.
The current luxury wellness space is diverse fragmented and caters for a wide range of health needs from medical to relaxation.
Luxury wellness and consumer behaviours
More people are prioritising their health, taking a holistic view to wellness encompassing both physical, emotional and mental health, what Statista described as ‘omni-wellness’. They are driving demand for products and experiences that support this lifestyle. This includes everything from exercise, self-care, and sobriety to getting private tests run to double-check, or instead of seeing their doctor.
Coming out of COVID-19, there was an increased consumer focus on a number of different aspects of health and wellness:
Sleep quality
Mental health
‘Immune’ health
This intersects with the luxury market as consumers are willing to invest in premium products and services that enhance their well-being.
On the high-end what does luxury wellness look like?
Personalised wellness experiences. Consumers look for customised solutions based on their individual wants and needs. Technology and data enabled brands like L’Oreal and Unilever to offer individual recommendations and drive consumer engagement. Technology integration has been a key enabler.
Health and beauty interconnection. Consumers spend more in products and experiences that enhance their well-being, these are opportunities for the premium and luxury industries. Consumers see well-being products and experiences as an investment in themselves, with the concepts health and beauty as inseparable in their minds, particularly for younger cohorts.
Scientifically-backed products rather than more ‘new age’ or alternative therapies. Consumers have increased interest in beauty innovations that leverage technology and scientific evidence to address their needs. There is a latent demand for evidence around the world, Mintel cited 85% of Indian consumers agreed that beauty brands should provide more scientific evidence to validate their claims. This is notable given the rise over the past decade of guru Baba Ramdev and his brand Patanjali Ayurved that sells traditional products in the personal care category.
Longevity. Silicon Valley has been obsessed with longevity, the go-to example being Bryan Johnson. Kantar claims that a desire for longevity has moved beyond Silicon Valley. Consumers are prioritising longevity; looking for preventative solutions that support wellness at every life stage. This presents opportunities to offer products and services that for specific age-related concerns.
But medicince itself has thrown up a wildcard for the luxury sector including luxury wellness.
GLP-1 changed everything for luxury
I worked on the global launch of a weight management drug that went on to become used more by the rich and famous than the people it was intended for. If I had one a-ha moment, it occurred during an episode of South Park.
“Rich people get Ozempic, poor people get body positivity”
The rate of growth in these drugs is slowing down but not before GLP-1s had affected consumption habits. Size inclusivity that had been making progress in fashion was thrown into reverse.
There is anecdotal evidence that GLP-1 drugs don’t only change the patient’s relationship with food, but also affects enjoyment in general. This has hit premium alcohol sales and high-end restaurants. The idea of ‘lack of desire’ has implications for the concept of luxury in general.
Every trend has a counter-indicator
Trends are never a clean absolute truth. There is almost a Newtonian push in the opposite direction. Political and socially progressive movements begat a corresponding reactionary movement based around online personalities and political populism.
It would be remiss of me if I only showed you one side of the coin on luxury wellness. Haines McGregor have a perspective that claims that self-care has been replaced by indulgence, which feels at odds with the direction of travel for luxury wellness. Examples of indulgent brands include:
Where to start with multisensory marketing | WARC – 61% of consumers looking for brands that can “ignite intense emotions”. Immersive experiences that are holistic tap into people’s emotions and linger in the memory. It’s also an opportunity for using powerful storytelling to communicate a brand story.
How Ozempic is reshaping the resale market | Vogue Business – Poshmark’s data reveals a significant surge in plus-size women’s apparel listings on the platform over the past two years, including a 103 per cent increase in size 3XL listings, 80 per cent in size 4XL, and a 73 per cent rise in size 5XL. The company also reported a 78 per cent increase in new listings mentioning “weight loss” in the title or description as sellers look to get rid of items that no longer fit.
The consequences of the psychoboom are both logical and contradictory. As the Chinese economy has expanded and citizens have grown wealthier, the demands of everyday life have grown in number and kind, expanding from physiological and safety concerns to a desire for love, esteem, and self-actualization. At the same time, such desires run counter to traditional Chinese values like the age-old concept of Confucian filial piety and the relatively new ideology imposed by the Chinese Communist Party (CCP), both of which place the well-being of the collective above the happiness of the individual.
Cocaine Cowboys by Nicola Tallant tells the story of the Kinahan organisation. The Kinahan organisation is a group that wholesales and retails illegal drugs in association with other organised crime groups. Tellant explains how deprivation, geography and economic growth fuelled drug trafficking and abuse in Ireland. Isolated council estates and economic hardship drove a heroin epidemic. The subsequent Asian Tiger economy only uplifted young professionals who then were a ripe market for cocaine. Cocaine added to Ireland’s already difficult relationship with alcohol use and abuse.
Crime journalism such as this is popular in Ireland because it is so concentrated through blood and marriage ties. We don’t have the kind of diversity that the British criminal underworld has. This means that it’s much more ‘relevant’ to Irish society.
But the book title itself is very interesting. There is a clear parallel to the scale of the cross-border drug trade between the US and Mexico.
Irish country music star Daniel O’Donnell courtesy of TG4
But there is also an underlying western theme across Irish culture. The vast majority of us are at most a few generations from the farm. We have had hard times which is why country music appealed and even morphed into a localised genre Country and Irish popular in rural areas and amongst lorry drivers (or in American truck drivers that drive ‘semis’.)
Tallant’s stance is definitely anti-Kinahan; but the book title Cocaine Cowboys gives them the hero status and taps deeply into the mainline that the cowboy and related elements like country music have into Irish culture at home and abroad. Cocaine Cowboys might be the inspiration for the next generation to replace the Kinahans.
If you want to know more beyond the book Nicola Tallant and her colleagues at Irish tabloid the Sunday World host a podcast called Crime World.
After peak woke, what next? The Economist – in the past decade, a form of wokeness has arisen on the illiberal left which is characterised by extreme pessimism about America and its capacity to make progress, especially on race. According to this view, all the country’s problems are systemic or structural, and the solutions to them are illiberal, including censorship and positive discrimination by race. This wokeness defines people as members of groups in a rigid hierarchy of victims and oppressors. Like the Puritans of old, adherents focus less on workable ideas for reducing discrimination than on publicly rooting out sinful attitudes in themselves and others (especially others). The Economist has analysed how influential these ideas are today by looking at public opinion, the media, publishing, higher education and the corporate world. Using a host of measures, we found that woke peaked in 2021-22 and has since receded. For example, polling by Gallup found that the share of people who worry a great deal about race relations climbed from 17% in 2014 to 48% in 2021, but has since fallen to 35%. Likewise, the term “white privilege” was used 2.5 times for every 1m words written by the New York Times in 2020. Last year it was used 0.4 times per 1m words. – Of course, woke’s failure could be viewed by proponents as a sign of deep-rooted systemic prejudice
Economics
Why Britain has stagnated? | Foundations – this reads true and hits hard. My parents came to the United Kingdom when the motorway network was being built, power stations were being constructed and the first generation of nuclear submarines were being constructed. In London the Victoria line was constructed. Now the UK struggles to build any infrastructure and its strategic industrial capabilities have been hollowed out or disappeared.
FMCG
Unilever moves on ‘sub-par’ marketing | WARC – That means consistent execution in marketing innovation, marketing quality, proposition sharpness, execution of pricing, execution of distribution. Fernandez suggested that, on a scale of 1-10, the business is currently at around six but needs to get to eight or nine (“ten doesn’t exist”). A&P spending is increasing as a proportion of revenue, from 13% in 2022, to 14.3% in 2023, and 15.1% in H1 2024. “There is an implicit recognition that our level of investment was not in line with our ambition of volume growth,” he said. That increased investment is not there to fund a growing volume of marketing content, he added. “I’m much more concerned about the quality of the stuff that we put in the market than the amount”. And that also means a focus on brand-building. “We see other people putting much more focus on promotional pricing,” he said, “but we always will prefer to invest in long-term, equity-building activities.” – CFO burns marketing teams ‘I believe our marketing was subpar”
Is marketing entering its ‘era of less’? | WARC – based on Gartner CMO surveys marketers are increasingly being seen as cost centres and are being asked to do more with less which is affecting mar tech spend, staffing and agency spend.
Innovative research that literally put people in the driver’s seat | WARC – More than half of strategists (59%) are integrating AI into their strategy development process in a cautiously progressive way. They need to identify the skills that AI can’t replace, such as getting buy-in for a strategy, and double down on them. Speedy access to research and insight (74%) and streamlining repetitive tasks (74%) are the top opportunities strategists see in leveraging AI in the strategy process.
Future of Strategy 2024: Synthetic data – speedy saviour or another example of the industry’s arrogance? | WARC – it’ll be useful when time is of the essence, and you want to ‘speak’ to people and get their thoughts on your hypotheses, ideas or campaigns. In that scenario, I can see how that approach may replace an ad-hoc focus group set up hastily in the agency’s boardroom. But we’re not here purely to understand people. If the role of communications is to move people emotionally, shouldn’t we also be here to feel people? As Richard Huntington, CSO of Saatchi & Saatchi says: “You can’t feel data.” The beauty of humans (and the beauty of ethnography) is that so often it’s not what we say that powers an ‘insight’ or a strategy, a campaign or some NPD… it’s what people don’t say. It’s the nods and winks, the gestures, the objects with meaning they have in their homes and in their lives. That texture isn’t picked up by a typical conversation – be that with synthetic data or in a focus group. These feelings that are elicited from ethnography are the special sauce that can separate the wheat from the chaff.
Home | LibreOffice – Free and private office suite – Based on OpenOffice – Compatible with Microsoft – I have 35 years of content saved, and LibreOffice can open them all. When you’ve been writing for years, your manuscript formats will often be obsolete (though I’ve tried to make decisions that make my poems available platform agnostic, such as using plaintext, but line breaks and stanza breaks don’t always translate well in markdown). LibreOffice is an incredible tool for opening 25 year old wordperfect files when I need them.
Apple Knew Where the Puck Was Going, But Meta Skated There – the PAN or personal area network has been talked about for 20+ years. What this misses is that the Orion glasses were possible thanks to silicon carbide lens which are a non-trivial thing to manufacture at scale
Warped media constructs as an idea originated from a few observations I made. The first was an article by Magic Numbers that examined the distribution of marketing spend across various media channels compared to the percentage of profit they generate. It was based on a piece of research done called Profit Ability 2.
A chart in the article caught my attention. While all channels contribute to profit, some have more comprehensive long-term effects than others. Any channel below (or to the right of) the red line represents a greater proportion of contribution to overall profit returns than the proportion of the marketing budget allocated to it.
Based on this chart: linear television, radio and podcasts and print advertising offer the best value for money for businesses.
What’s interesting is that two out of three of these channels are viewed as legacy media that brands are keen to move away from. When I worked at Unilever, the global media spend for the brands I managed amounted to about 92 per cent on television advertising. Some markets allocated even higher percentages.
The second influence for this post on warped media constructs was a post by Tom Goodwin.
Goodwin spent the best part of a decade working in senior roles for media buying businesses in very technology-centred roles.
It’s only just dawned on me that the reason Traditional Advertising is quite good and Digital ads are uniformly terrible is this.
Media owners always knew they were in the business of selling eyeballs.
Digital media companies think they are in the business of selling clicks.
Our core competence becomes how we see the world.
If you were a traditional media owner , your “job” was to attract , to respect , to inform, to tantalize, to satiate attention and repeat business
If you were a digital media owner, you were a tech company using algorithms to trick, harass, optimize, chase , game, attention by trying out any one of Billions of bits of content , made for free by users.
So while TV companies and traditional media owners are selling attention and eyeballs.
Digital media companies are selling clicks and data that show they create success.
The philosophy of traditional media is actually far more useful for longer term business success with advertising
For MOST companies of any scale, taste and longevity, digital media thinking is entirely wrong
But tech thinking swayed the market , they became so dominant and valuable, and profitable, nobody has the balls to call out how dumb this actually is and how much it’s degraded advertising.
I just wish we could apply the thinking of traditional media , the need to respect , to seduce , to value , to reward human attention , to digital media , because that’s where most people spend ALL of their time.
His post made me wonder about why such warped media constructs were widespread, when the flaws of lower performing media were readily apparent?
What does the data tell us about media?
The Profit Ability 2 research is a robust study of the UK media market. It took data from five media buying agencies looking at 141 brands in 14 sectors. it was based on a three-year media spend (2021-2023) and across ten media channels. Over a third of the brands matched pre-and-post COVID.
Retail media is one area that I would have liked to see examined in a bit more depth, given its rising popularity and ability to challenge generic PPC and online display advertising.
Media that is often the most lionised and championed by media agencies, notably paid social and programmatic display media were outshone by media types that have been declining investment by marketing teams over the past two decades.
This isn’t a new phenomenon as Ebquity research back in 2018, showed that there was a considerable gap between what marketers and agencies thought were effective, versus real-world evidence.
Secondly, this data indicates that brands are not using the channels in the best way for the long term interests of their business. There is also a correlation with declining campaign effectiveness rates.
Why do we have warped media constructs?
This pivot towards warped media constructs has benefited everyone but advertising agencies. And it would be reasonable to hypothesise that agencies chasing incremental growth, enterprise software vendors and consultancies have been leading large corporates up a digital focused route that provides data and efficiency at the expense of effectiveness and marketing ROI.
Agencies’ legacy businesses are fading as the vast majority of incremental marketing spend is directed online. Digital growth is accruing to leading publishers, enterprise software and consultancy firms, while technology enables marketers to do more in-house. Market share loss is already evident in slower organic growth, but trading multiples fail to recognise the heavy dependence on M&A. Fragmentation. Almost 80% of every incremental advertising dollar spent globally accrues to digital. As their legacy traditional media businesses are fading, agencies are failing to capture digital growth, resulting in a lower market concentration in favour of new entrants empowered by technology
Redburn Atlantic (equity research paper): Ad Agencies Marginalised (2016) by Bianca Dallal, Matt Coupland and Mandeep Singh.
Advertising industry commentator Michael Farmer alluded to this change in his newsletter Madison Avenue Insights back in 2020.
Creative agencies have mastered the requirements of integrated campaigns, from TV to online video, websites, Facebook, Instagram, ad banners and e-mail marketing. It’s a pity, then, that this victory is being undermined by agency price-cutting strategies that leave agencies understaffed and underpaid. Senior agency executives need to create winning business practices – they’re losing the business war.
Platforms like Facebook have repeatedly tried to prove that they can substitute for linear TV in advertising campaigns since the late 2000s with varying degrees of success.
The Devil is in the details.
Remember the question about what the data tells us about media? Let’s examine the data in more detail.
One of the key phrases on the slide plotting out the different media sources is ‘full profit returns’. This term is quite important to bear in mind. Consider how these media channels work.
Long-term memory model or brand-building channels
Linear television adverts
BVoD (Broadcaster Video on Demand)
Radio and podcasts
Cinema
Online video
Print advertising
Good brand building content that we are sufficiently exposed to can stay with us for decades and even become part of culture.
Short-term brand activating channels
Generic PPC (Pay-Per-Click)
Paid social
Display advertising
This means that once you have clicked on the ad and gone to a destination, the advertisement has largely had its effect.
The Long and the Short of it
Now if we look at the performance of these media types over full payback, sustained payback and immediate payback we see that each these media channels serve short-term or longer-term goals. Time matters, Profit Ability 2 found that 58 percent of advertising’s total profit generation happens after the first 13 weeks.
If you are a digital-first organisation, or looking at ‘last-touch’ attribution, your measurement is capturing less than 40 percent of profit generated by advertising depending on the marketing mix of the campaign. Your organisation’s marketing culture could be leaving substantial marketing generated profits unharvested with an overly short term focus and less efficient over longer timelines than a financial quarter.
Binet and Field established some useful heuristics for thinking about marketing spend, which can help shape media choices from a macro perspective of brand-building and brand-activating activities.
Immediate payback – profit derived in the same week as the advertising.
Sustained payback – profit derived from week 14 to 2 years of advertising.
Full payback – profit derived over the full 2 year period.
Anything above the yellow line makes a positive contribution relative to the proportion of marketing investment. Linear television works when used consistently and has a long-term impact.
Paid social media is about achieving immediate results, being a very tactical channel by nature.
Print advertising is unique in serving equally well across immediate goals, sustained campaigns, and delivering long-term results.
Each media channel can play its role based on the communication objectives. Their effectiveness also depends on how they work together.
A second consideration is the channel’s reach in the population. Print is interesting as a universal channel for consumers who read print publications, from older Telegraph readers to Monocle magazine-toting hipsters. However, it’s less useful if you’re looking to reach a football-mad teenager. Ebiquity in its analysis of Profit Ability 2 talks about a related concept called saturation:
The study analysed the saturation point for each channel, which is the last point where every pound invested in a channel generates at least £1 profit.
It found that TV has the highest saturation point. Advertisers can increase investment in TV to a higher level than other media and it will continue to generate a profitable return.
Based on immediate payback (i.e. payback within one week of investment), Linear TV advertising on average hits saturation at the highest spend level – £330,000 – nearly triple the equivalent scale of the next largest channel (Print) and over 8-times the scale of Online Video.
Profit Ability 2: The new business case for advertising | Ebiquity
Reflecting on my experience at Unilever: I wasn’t brought in to help digitise the marketing mix away from television because digital was an ineffective channel, but because linear television wasn’t as good a platform for reaching busy young mums as it had been previously. We had to broaden the media mix to reach them, which meant more investment in online video and paid social media. In retrospect, we focused on reach, deprioritising consideration of the communication objectives. BVoD, radio, and podcasts might have had greater weighting if I were to do it again.
This might all change
If a channel became more expensive, you would get less value for your money; it would be equivalent to raising the yellow line. Conversely, reducing the cost of the media would be equivalent to lowering the yellow line.
Cost inflation
Price inflation for larger clients likely endangers cinema, display advertising, online video and BVoD in client budgets first. There may be a strong case at present to allocate more spend to channels that would encourage branded searches, to improve the effectiveness of a reduced PPC spend. Examples of these channels would include public relations, print advertising and television.
Job to be done / payback period
An emergency locksmith will have a very different budget and timeline for marketing return compared to an aftershave brand. The emergency locksmith wants to rank top in local search on mobile devices to get a call-out; they are far less likely to consider brand building and word-of-mouth. The exception to this rule would be at the top of the market, like Banham in central London, which would be providing more of a concierge security service.
Regulation
I have worked with pharmaceutical clients where most of the communications we were doing had to be addressed directly to healthcare professionals. In that case, you have a much more limited palette of possible communication channels.
You face a similar situation if you are looking to market regulated consumer products like sports betting, gambling, alcohol, cannabis and tobacco-related products or vapes. The channel limitations are based on screening off protected audiences or reducing the chance of positive brand attributions. Regulators don’t want smoking to appear cool.
So what’s the best media channel based on our warped media constructs?
It depends. The good news is that all advertising channels analysed in Profit Ability 2 generated a positive payback from advertising when sustained effects are accounted for.
Mediatel: Newsline: Starcom: TV is now twice the price… but not twice as good -“There’s still nothing better than [a 30 second ad],” Dan Plant said on a panel at Future of TV Advertising Global. “Unfortunately it costs twice as much now – and it hasn’t got twice as good at what it was doing. You pay twice as much to achieve the same thing.”
The racket sport padel seems to have got the zeitgeist, if not the player numbers yet. We haven’t really seen a surge in sports fads since the 1980s. During that time skateboarding rose from a peak in the late 1970s, to a more stable underground sport that we have today. The closure of a squash racquet factory in Cambridge, saw the sport globalise manufacture and playing. In a few short years rackets went from gut strings and ash wood frames to synthetic strings and carbon fibre composite rackets. It was as much a symbol of the striving business man as the Filofax or the golf bag. Interest was attracted by a large amount of courts and racket technology that greatly improved the game.
Squash had its origins in the late 19th century and took the best part of a century to reach its acme in the cultural zeitgeist. Skateboarding started in the late 1940s and took a mere 30 years to breakout. Padel falls somewhere between the two. Padel was invented in 1969. But it took COVID-19 to drive its popularity in Europe and North America.
There is a new world professional competition circuit for 2024. And it has attracted the interest of court developers looking to cater to what they believe is latent consumer demand.
Finally, you can get three padel courts in the space for one tennis court. More on the padel gold rush from the FT.
The challenge is if padel is just a fad, or has it longevity? Skateboarding is popular, but many councils didn’t see the benefit of supporting skate parks built in the 1970s around the country. Squash still has its fans but doesn’t have the same popularity that it enjoyed in the 1980s.
What’s it like being a Disney adult? – The Face – this is much more common in Hong Kong, but then people had annual passes to go there. I found it interesting that The Face othered it as a sub-culture
Vittles Reviews: There Is Always Another Province – Province-chasing isn’t just a Western phenomenon; China is still so vast that when the barbecued food of Xinjiang, one of China’s border provinces, showed up in a former sausage shop on Walworth Road at Lao Dao, it didn’t need to open to the general public for months, choosing only to take bookings via Chinese social media. The paradox is that the success of regional Chinese restaurants has created a Western audience which wants more, but that same success has allowed these restaurants to bypass those customers altogether
Culture
Television: one of the most audacious pranks in history was hidden in a hit TV show for years. – Watch enough episodes of Melrose Place and you’ll notice other very odd props and set design all over the show. A pool float in the shape of a sperm about to fertilize an egg. A golf trophy that appears to have testicles. Furniture designed to look like an endangered spotted owl. It turns out all of these objects, and more than 100 others, were designed by an artist collective called the GALA Committee. For three years, as the denizens of the Melrose Place apartment complex loved, lost, and betrayed one another, the GALA Committee smuggled subversive leftist art onto the set, experimenting with the relationship between art, artist, and spectator. The collective hid its work in plain sight and operated in secrecy. Outside of a select few insiders, no one—including Aaron Spelling, Melrose’s legendary executive producer—knew what it was doing. The project was called In the Name of the Place. It ended in 1997. Or, perhaps, since the episodes are streamable, it never ended
Rode acquire Mackie | Sound On Sound – this is big for podcasters, but also for artists that record in their own studios. Mackie mixers have powered the home grown set-ups of artists like The Prodigy, The Crystal Method, Brian Eno, Daft Punk and Orbital.
Health
China e-cigarette titan behind ‘Elf Bar’ floods the US with illegal vapes | Reuters – In the United States, the firm simply ignored regulations on new products and capitalized on poor enforcement. It has flooded the U.S. market with flavored vapes that have been among the best-selling U.S. brands, including Elf Bar, EBDesign and Lost Mary. In the United Kingdom, by contrast, Zhang has complied with regulations requiring lower nicotine levels and government registration while building an unmatched distribution network — and driving a surge in youth vaping
Hong Kong’s first ‘patriots-only’ district council poll reflects political tale of two cities, as some eagerly rush to vote and others shy away | South China Morning Post – Hong Kong on election day splits into two camps, with one eager to vote out of civic duty and others giving polling stations wide berth over lack of political diversity. ‘I thought more people would come and vote because there has been more publicity,’ one elector says after discovering sleepy atmosphere at local polling station – the question is will Beijing take anything from this voter turn out? Does it signal suppressed but indignant separatists, or Hong Kongers who are more focused on prosperity and weekend Netflix? If they suspect the former then the security situation is likely to get more dire
Inside Louis Vuitton’s Hong Kong spectacle | Vogue Business – While Hong Kong is gradually recovering from the pandemic lockdowns, growth in Mainland China is slowing. According to HSBC estimates, luxury sales there are expected to grow 5 per cent in 2024, a sharp deceleration compared with 2023’s projected 18 per cent.
