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WHITE PAPER No.

Trends in Marketing Spend


Stefano Sandri

16

Close your eyes and try to remember five advertisements or messages you saw on your way to work this morning. Still thinking?
Grabbing your attention in busy environments such as Hong Kong, Shanghai or Singapore, is virtually impossible in an age of mobile Internet use, constant social networking and e-mailing. Traffic jams, the daily commute to work, and of course, the highly distorted media landscape of these areas add to this problem. We should therefore ask ourselves if traditional mediums are enough to grab the attention of the people we want to communicate with. In a world of instant communication and globalization, markets are changing faster than ever. It is this current stage of the development where global brands have to act distinctly from their competition. Marketers need to take advantage of these fast changing developments. They shouldnt wait to see how other markets are developing. In this extremely fast changing environment, market need to act faster than ever. With the U.S. and European market adapting to retention rather than attention, marketers of global brands have already analyzed the advantage of interacting on a more personal and direct level with their most important stakeholders. Global brands, whether internally, within a company, or externally with their partners, business associates and consumers, see the advantage of these new marketing tools and trends, and continue to amaze their audiences with bigger and better marketing activities. However, one major question remains: How are these extremely fast developing markets from the East adapting? What is the current market situation, what are the trends, and how will marketing operations look in the near future?

The gamble worked, resulting in 2.4 billion media impressions.

The power of experiencing brands in new markets


So how and where do we implement experiences in order to add more value to an activity and amplify the power of its communication? Experiences can be applied through multiple channels, meaning every direct touch point with stakeholders allows us to interact with the people that matter most to us. This can be anything from personal communication via the Internet, to outdoor and event activities, allowing our audiences to interact, engage and enter the brand. Most brands agree that interaction through experiences, whether off or online, allows for two-way communication, rather than the one-way communication traditional media is limited to. It is this two-sided interaction that creates experiences, allowing both parties to have a memorable moment and establish a stronger bond than with one-way interaction. This clearly creates awareness of how experiences may be a much more efficient and effective tools for brands to communicate with their audiences. 89% of marketers and managers of global brands agree that experiential marketing helps them build long term relationships. The strength of this marketing tool is the power of personal experiences directly applied to the audience. This allows for personal interaction and engagement with a brand and its message. It is that experience that stakeholders will consciously remember, rather than subliminal observations from the oversaturated media environment. This powerful tool of creating a brand experience, rather than just a marketing message, has clear advantages that can be applied on several levels of communication between brands and their most important audiences. This could include a conference for product launches or recent brand developments, exhibitions, digital solutions, or a consumer marketing campaign. Two-way communication can be applied to several marketing activities and clearly strengthen the relationship between brands and their audiences.

Marketing spending and trends


Compared to Western markets, Hong Kong and Asian markets in particular have always been quite conservative and rather traditional when it comes to communication and advertising, compared to Western markets. However, since Hong Kong and Asia are catching up through their massively enhanced economical power, change in behavior, perception and thinking within the past decade, marketers are changing their awareness of media usage and communication tools. Progression of Budget Allocation (in million HKD)
8000 7000 6000 5000 4000 3000 2000 1000 0
TV er et or l ts o t ai in ap en rn di do Pr M Ra sp Ev ut In ct O te th er

Domestic spenders on TV are going down and that money would probably go to online.

ew

2008 (Total spend: 25,575)

2009 (Total spend: 24,041)

Di

re

2010 (Total spend: 25,086)

From 2008 to 2009, a steep decline in TV spending occurred, due to the recession and massive cuts in marketing budgets. This decline forced marketers to change their thinking in regards to spending. This caused a shift to more cost effective mediums and many moved their budgets to events, print, and online, since they allow more effective communication with their stakeholders. Marketing Spending in Hong Kong (2010)
Other 2% Radio 2% Direct Mail 3% Outdoor 9% TV 27%

Events 10% Newspaper 27% Print 11%

Internet 13%

With these developments in mind, we still see most of the spending going towards traditional mediums such as TV and newspapers. While these are still the dominant communication tools for these markets, marketers need to understand that online solutions, as well as personal interacting activities, are gaining much more importance and effectiveness.

So what do the brands say?


When we interviewed high profile marketing spenders of global operating brands in Hong Kong about future trends in marketing activities, the majority agreed that online is becoming a greater focus. Some questioned the implementation of their brand and operations with online engagements, but a strong desire for these solutions was present at all times. A scepticism some brands had was the measurement of ROI. In this case we compare experiential marketing activities to public relations activities. Measurement is difficult, but everyone agrees that it is mission critical. However, compared to public relations activities, online solutions can be measured more effectively through quantitative data, relevant statistics and other tools to create an overview for a good ROI analysis. Future thinking companies implement online solutions already and see the outcome they desire, without putting their main focus on measurement. Many brands already see the power of online solutions to strengthen their marketing activities.

We cant just have an event on its own anymore; we need to make it live more on digital and make it look better.

Shifting gears: less advertising and more experiences


The financial crisis of 2007 up to the present day demands a different thinking in media budgeting and spending. The question at this point is not how to save money but how to use the money marketers have more efficiently. Simultaneously, social networking exploded rapidly in the past three years, allowing marketers to review and assess online marketing solutions once again. Questioning the high pricing of media production through TV, marketers see more potential and cost effectiveness through online engagements.
This White Paper is based on the dissertation research project Current views and trends of the marketing spenders of global brands within the Hong Kong market written by Stefano Sandri, NHTV - University of Applied Sciences Breda (2010). Quotes used in this White Paper are direct quotes taken from 12 in-depth interviews conducted within the research. The interviewees of this research included heads of marketing, directors of corporate communication and similar senior positions of leading consumer and financial institutions. All data is taken from quality marketing research reports. Some data is based on previous White Papers.

Overview Jack Morton developed a campaign architecture, incorporating five marketing channels: mobile, street teams, Facebook, Twitter and email. Each marketing channel had a unique purpose and objectives in order to achieve the goals of the campaign and directed consumers who interacted with the channel to the AT&T Torch website and AT&T retail stores, in addition to other campaign interaction opportunities. Results 200,000 Facebook page views 945 people created Get InTouch holiday cards +3,000 Augmented Reality views 7,369 sweepstakes entries and 3,503 unique entrants 505 million Facebook ads impressions, reaching 142 million people and +100,000 unique visits to the BlackBerry For AT&T Facebook page +11,000 tweets from 2,590 unique twitterers +10 million Celebrity Twitter impressions and 19,000 click-throughs +55,000 Email blast impressions, opened by 6,729 people and drove 120 people to the AT&T Torch website for a combined click-through rate of 1.78% +100,000 Street Team active engagements

ABOUT JACK MORTON: As a leading global experiential marketing agency, Jack Morton Worldwide creates brand experiencesand thereby helps clients build experience brands. We integrate live events, digital engagement and 3D environments to build brand relationships, increase sales and improve business results. For more information about Jack Morton, or for additional findings from the 2011 Marketers' Survey email: experience@jackmorton.com or contact US: Liz Bigham +2124017212 Europe: Julian Pullan +442087352000 Australia: Helen Graney +61282314500 Asia: Ben Taylor +85228051767 www.jackmorton.com
Jack Morton Worldwide 2011. All Rights Reserved. This report may not be copied or reproduced in whole or in part without the express written permission of Jack Morton Worldwide.