Meet the team

Adrian FerreroDirector Digital MarketingVF

Nadia CallaghanDigital Marketing ManagerASDA

Michal StachurskiHead of DigitalNow TV

Vladimir DolgopolovDigital Marketing ManagerMichael Kors

Stephen EdwardsSenior Agency Partnerships ManagerAmazon

Lisa YeatesClient PartneriProspect

Paul AdamsChief Client OfficeriProspect

Jack SwayneChief Strategy & Analytics OfficeriProspect

Caroline ReynoldsVP of Paid SearchiProspect

Matt PotterChief Content OfficerJohn Brown

Stuart McLennonHead of Paid SocialiProspect

2016ChristmasRoundtable

However, amidst all the current ambiguity, we can still rely on one thing: the arrival of Christmas Day. There’ll be British households filled with twinkly lights and united by festive cheer, presents under the tree, warmed mince pies and arguments over the latest tech gadget unwrapped just hours ago. We’ll watch a royal speech and sing along to carols, and it is from the reassuring inevitability of these traditions that we can still gain great comfort and build opportunity.

It’s also this wonderful certainty that means retailers can’t sit back and wait to see how the political and economic situation unfolds over the coming months because,as sure as eggnog is eggnog, there is much work to be done.

In the ever expanding, oversaturated and rapidly developing digital environment, brands must be well prepared in advance of Q4 to take full advantage of moments and opportunities. Brands must invest time and effort in fresh and relevant digital strategies to cut through the white noise and connect with spenders during the holiday season.

In the spirit of Christmas, we asked the team at iProspect to give brands the early gift of industry insight and offer valuable guidance on topics such as how to balance risk and opportunity, being customer-centric, and the influence of devices in helping to deliver impactful marketing strategies via digital channels. We invited a mix of brands to our iProspect Christmas grotto, including Sky, Michael Kors, ASDA, and VF (whose portfolio includes Vans, North Face, Wrangler and Timberland) to lay the stable foundations of a successful and festive quarter.

After all, it’s the thought that counts.

A digital

The UK is currently in a state of limbo. As the Great British Summer is still deciding whether we need flipflops or worn-out

wellies and the nation’s newspapers continue to shout out Brexit headlines

from their front pages, we settle in for a period of uncertainty

and anticipation.

A

digitalChristmas starts now

2015 H2 digital advertising spends increased

19.9%

Overall digital spends for the year were up 16.4%,

showing that H2 continues to dominate the spend

landscape

(source: IAB 2015)

The Ghost of Christmas Past

A lot can be learned by looking back and analysing last year’s events. This time last year, we had rightly anticipated an even earlier start to the festive season and the inevitable solidification of Black Friday as a ‘peak’ on the retail calendar. Digital media success wasn’t due to virality but rather the paid strategies that were driving significant reach and frequency. We suggested that digital video would become a much more popular medium to support TV campaigns and it did. And while we predicted the 40% increase in mobile shopping, more could have been done in this area despite the retailer anxiety that surrounded it. There was evidence of reacting to trends and changing content strategy at the last minute but overall, there was an air of optimism around Christmas 2015.

No one could have expected it to play out the way it did. The unseasonably warm weather, the floods and people simply avoiding the high street as a result all contributed to an in-store volume drop of 1.5%, an understandable shift of 8% to online, and a total 0.6% fall in retail - the worst result in 20 years. And the big winners for Christmas 2015 were actually those that had invested in online fulfilment and infrastructure, and were therefore less reliant on in-store footfall.

For the 12 weeks to 3 January 2016, Lidl

became the UK’sfastest growing

grocer

Discount rival Aldiwas not too far behind

Online shopping is no longer a young person’s game:

40-50 year olds

29% 25.7% 18.9% 16.7%

of all Holiday Season transactions

30-40 year olds 50-60 year olds 20-30 year olds

13.3%sales increase

18.5%sales increase

(source: IAB/myThings)

(source: Waggener Edstrom (WE) study)

Balancing risk and opportunity

It’s potentially easier for brands to take risks within the digital space, rather than via above-the-line (ATL), but given the current geo-political and economic uncertainties, should they be trying out new things during the festive period or is it too dangerous to gamble around the most significant time in the retail calendar?

JS: No one can predict the future but we want to try and make things as certain as possible. The political events over the past weeks may have created more insecurity but, like last year, there are always things you can’t control. Being reactive is becoming more and more important for brands to help deal with this uncertainty, as well as the expanding complexities of the retail market at Christmas time. With Black Friday, Cyber Monday, Manic Monday etc., more and more moments are springing up in Q4 and it’s impossible for marketing teams to own every single one of them. However, these moments exist to create opportunity for brands and that opportunity comes from good planning and perhaps tackling the strategy in a slightly different way.

CR: When it comes to planning from a paid search point of view, it can be difficult to take risks because it is pretty much locked down based on what has happened the year before. But a dose of reactive is certainly needed to keep the campaign current and relevant.

PA: I’d be surprised if brands take risks around their search strategy or social strategy in terms of media buying. However, the risk that is needed is around cut-through and asking yourself ‘how are you going to stand out from the crowd?’ and ‘what’s your message going to be?’. Even with standard media planning, taking a risk with your messaging can pay off really well.

MP: In the light of Brexit, panicking by ‘going dark’ is the worst thing that you can do. Junking brands and selling products off cheaply isn’t the answer. Hold your nerve. Look for the opportunity. Stand for something and instil trust in the consumer. Trusted brands, like Amazon and John Lewis, have an integral personality. They maintain their presence and are reliable and consistent.

Their campaign celebrated enjoying the outdoors and not queuing up in stores to buy products. It was a bold move, created a really big buzz and ultimately helped them with their December sales before Christmas.

LY: From the 2015 stats, we know that the brands who decided to opt out of Black Friday also benefited during that time. There was actually a 24% uplift in sales anyway because people were ‘in-market’ and looking for products online, trying to find a good deal.

SE: I can say that, for us, we’ve seen it continue to get bigger over the past couple of seasons. Amazon.co.uk announced last November that Black Friday 2015 was our busiest day yet with more than 7.4 million items ordered, and around 86 items sold per second. It also beat the all-time sales record set on Black Friday 2014 when more than 5.5 million items were ordered. We’d invested in preparing for the holiday season throughout the year, and were delighted that millions of customers loved the deals on offer.

Can the modern retailer afford to ignore Black Friday?

Black Friday’s AOV average in 2015 was 20% higher than the previous seven-day average. John Lewis recorded its most successful week of trading ever as sales via the department store’s website soared 15.5%, while it reported Black Friday as its biggest single day of trading, with sales 11.9% higher than last year. Whilst few brands shared this incredible success, we’ve accepted that Black Friday is here to stay. Meanwhile, some retailers continue to turn their nose up at it and choose not to get involved but is this a wise move for 2016?

JS: Last year, people delayed their Christmas spending and it seemed they were waiting for Black Friday, confirming its institutionalisation within the British festive calendar around buying products. But on the actual day, it probably wasn’t as big as everyone had expected. This could’ve been due to a number of factors but as a concept, being driven by Amazon here in the UK, it can’t be completely ignored. It’s here and it’s happening. However, there are brands that choose not to participate, including Asda last year. In the US, outdoor clothing company REI closed all of their stores on Black Friday (see link on next page).

Note: represents activity on the Demandware platform. Broader industry metrics may vary

% change vs. same period of prior year

54% 47% 46%

22% 20%

‘Cyber Week’ eCommerce order growth in select countries

(source: Demandware “All Wrapped Up: 2015 Christmas Holiday Shopping Recap” Feb 4 2016)

36% 2015 online spending rise year-on-year on Black Friday

21%Christmas Day 2015

was the most lucrative on record, with sales

on December 25th rising by up to

on the previous year.

Cyber Monday spending online rise year-on-year.34%

(source: Experian/IMRG)

RecommendsAudiences have to be key at Christmas. One thing we champion is sharing the data across digital channels to make spends more effective and to ensure the smoothest customer experience. This can be as simple as using CRM lists within Facebook or Google’s customer match to segment audiences based on their recent purchases or level of loyalty

Use different data sources. This audience-centric approach allows us to more accurately match our messages to the particular consumer’s interests and state of mind

Consumer intent allows us to dial up and dial down media to drive incremental sales

First-party data allows you to drill down much deeper for a more complete picture than what can be gleaned from site tags and device types

iProspect use both Pulsar and Unmetric as social listening tools, as well as Sprinklr across our PSM accounts. Using a real-time tool allows us to identify trends as they break, and examine what our target audiences want

Combine this with search demands, and we can immediately spot gaps for content which can then help increase SEO rankings and be amplified through paid channels

Adopting an audience-first approach

According to our forecasts and the developments of audience data, only 5%* of people shopping online though paid search will be unknown by 2018. So what does that mean for our known to unknown audiences now? And through the Q3 period, how do we organise them across digital channels so that we are accessing our most valuable customers?

CR: It’s quite exciting for search at the moment, we’re moving away from keywords and towards audiences. This Christmas is the first year where we’ll see the various audience layers leveraged by brands on Google. We’ve now seen the development of customer match using CRM data and the release of ‘lookalike targeting’ through Similar Audiences. It’s now not a decision about whether you bid for a keyword or not, but rather how targeted you can be to capture the right consumers based on their intent as well as their purchase history. We are advising our clients to start testing these strategies and start building up audience lists now, ready for the festive season.

AF: Our strategy is definitely audience-first. We are trying to make the most of our current data and that’s the challenge across the industry: how to put the right data from the right sources into the DMP so that it’s

segmented in the way that makes most sense to improve targeting and retargeting. We have definitely started that journey and we will try and utilise it as much as possible in time for Christmas.

SM: People still think that advertising on social is something that’s relatively simple but it is increasingly complex and there is a real need to adopt tech solutions to assist with its management and to think of it programmatically. You need strategists and you need traders to help manage this advertising activity for you.

(*source: iProspect prediction for 2018)

Striking the balancebetween useful and creepy

LY: In terms of personalisation, we have to try to not be too creepy and avoid messaging people on an individual and intimate level. We have our audience strategy from our known valuable customers all the way into our unknown, so we should try to talk to them in a way they know is not only to them, but also to a wider consumer group.

CR: The first stage is knowing when to show an ad and how much to pay to show it. Then it becomes about the right personalisation and the relevancy strategy. It’s important not to stop at just showing the ad but rather look at the onward experience and how that can also be personalised to maximise the profit you’re making.

MP: You have to be relevant, use a really light touch and not go “Hello target demographic” otherwise you are back at the beginning of the dot com boom. You need to know what’s too far and what’s too close. If brands are to have a personality then it must be an emotionally intelligent one.

Intelligent content is not just about video

Getting the right message, look and tone of voice is key to maximising a brand’s creative success online. And despite its thriving popularity, it shouldn’t all be video!

MP: There is no other agency that knows more about online users than iProspect. There is nobody better at amplification and pulling out data to mix art and science in order to create relevant storytelling. But data will only get you so far. You still have to be amusing or engaging to create the connection. That’s what intelligent content is about. You also need to think about the communication channel for content, and whilst Mark Zuckerberg predicts that by Christmas of next year 95% of Facebook inventory will be video, is it always the right way to go? It feels like we are still very much in the first wave of people getting their wings and pushing out a lot of video content. Some of it may stick; most of it will not. Then there will be a second wave in which it’s a lot more intelligently created. We also must realise that the customer doesn’t just live in a channel of video, but in an omnichannel world, so you want to make sure that those moments they are exposed to, for example the abundance of Christmas-related content towards the end of the year, really count. I think de-siloing and devoting more thought to something more impactful pushed out less often would be huge.

Gareth Davies | Head of Digital & Insights, WE

The John Lewis campaign hashtag #ManOnTheMoon

55,000was usedtimes inthe first 24hrs

Aldi’s ‘man on the moon’ reinforces its broader marketing campaign. If there’s one thing that the Aldi advert has shown us, it’s that being agile and creating on-the-fly content can be a hugely successful strategy.

MS: The video space has also changed in the last couple of years. Things used to go viral all the time without any spend behind them, but there’s now this realisation with Facebook and YouTube that it’s very difficult to get viral. In fact it’s near impossible, so you have to put the budgets behind your video to generate the views and the comments.

Aldi’s ‘man on the moon’ reinforces its broader marketing campaign. If there’s one thing that the Aldi advert has shown us, it’s that being agile and creating on-the-fly content can be a hugely successful strategy

Gareth Davies | Head of Digital & Insights, WE John Lewis ad, 2015

Social Channels & theirpart in Christmas 2016

SM: In terms of the role of social at Christmas, we would anticipate that it’s a considerable year-on-year increase in investment again. We anticipate that Snapchat is going to be big in Q4 this year, now that it seems to be more mainstream and they have great ways of measurement with double-click integration. But there is an issue over measurement, which is currently with CPVs, as the video might have been swiped immediately after download. What is more valuable: a Snapchat CPV or the three seconds it happened to be playing without sound on the screen on Facebook? It’s a really complex thing for advertisers to get their head around, CPV or views on social.

LY: There’s a definite shift in how clients can be measuring social campaigns and this should be dependent on their objective. If the overall objective of the campaign is uplifting brand awareness, then measuring purchase intent is more important than number of impressions and reach.

MP: iProspect previously carried out a fascinating piece of research, called the Science of Social, around brand perception when a social channel is active, popular and engaged. It showed that the number of likes on a page and amount of engagement have a big impact, affecting tolerance of price-point. This idea seems very relevant for Christmas time.

What’s hot in social marketing

Twitter recently announced the mothballing of its Buy Button due to a lack of uptake from customers and brands. Even compared with other social platforms, the fast pace of Twitter arguably makes it an environment ill-suited for social commerce, with the possible exception of flash sales and other time-limited offers.

Facebook’s Shop functionality is further advanced in the US than UK market. In the UK, the ‘Buy’ call to action redirects to a retailer’s own site, so it’s not true in-platform commerce, but could serve a similar role. Facebook are working on shoppable videos – essentially video annotations with links offsite, similar to YouTube’s product annotations.

YouTube recently introduced their Shoppable video ad format. Essentially it’s an expandable video annotation, where users can click through a carousel of featured products. It doesn’t allow purchase in-platform, but would drive users to the relevant product page.

WeChat, like Facebook, has achieved dominance of the identity layer but has also managed to tie it to payments functionality. The success of WeChat’s in-platform commerce offering is based on its massive penetration (~70% of Chinese internet users), established payments base (WePay is linked to 200m bank accounts), and experience closer to the mobile web

As of September last year Pinterest reached the 100m user mark. The introduction of Pinterest’s new Visual Search tool may well enable them to close the gap on Instagram. The tool enables users to zoom in on a specific object in a Pin’s image in order to find aesthetically similar objects, patterns, or colours. It uses deep learning to identify visual features and unearth related images from Pinterest’s indexed database of Pins.

At present, Pinterest has indexed approximately 1 billion of its 50 billion images on the new search engine, and eventually hopes to index all of them.

eCommerce company Shopify reports in-platform order value on Pinterest higher than any other major social platform, with 93% of Pinterest users accessing the platform to plan purchases.

Pinterest are currently testing Buyable Pins across Android and iOS in the US, so expect this to be a format that launches in time for Christmas.

Search Expansion

SE: We’re continually seeing ecommerce marketing gain traction as a category in its own right, including search. Agencies are increasingly recognising it presents opportunities at all stages of the customer journey, from search and product discovery, to research and engagement, to purchase. They’re wanting us to help educate them so they can maximise this opportunity to identify new audiences and create brand-led customer journeys that follow through to purchase. Every kind of client seems to approach this slightly differently and it’s an ongoing conversation with our clients and agency partners.

CR: We are seeing a definite shift in consumer search behaviour, so whereas previously it was all about Google (and still is very much about Google), 30% of people are now starting their product journey and their product searches on Amazon. It’s no longer good enough for our search approach to be just Google, and when we plan it’s really about where we’ll get that performance and the role of each channel. Google is very much a ‘where shall I buy that product from?’, whereas Amazon is really getting in to the depth of the product and offering reviews.

The fight is largely overthe product and I-want-to-Buy moments

In a survey of 2,000 US consumers on where they begin their product searches...

21%

44%go directly to

34% use search engines such as

said they would start on a retailer site

(source: study conducted by Survata for eCommerce personalisation startup BloomReach)

Mobile advertising will acount for

50.2%of total internet spend by 2018

130%increaseon 2015’s $50bn

Don’t undervalue mobile by only reporting online sales through last click or cross-device attribution – measure in-store sales through Store Visits Ad Ops early, Ad Ops often. Tracking campaigns across devices is complicated and it may be best practice to use extra click trackers to impose more control

The “Phygital” space and device usage

LY: We know the majority of sales are still in store and Google and Facebook are all looking at how we can start to measure the impact of digital on in-store footfall or in-store shopping: a ‘physical web’ or ‘phygital’ space. Brands now need to look at the issue of people accessing their devices in-store and how to make the communication journey consistent, seeing it as a retail experience and ensuring marketing teams are working together to deliver on that. For Christmas and the Q4 period, it’s making sure that you are present across different devices and understanding that path to purchase. In search, for example, being present with the local activity and being hyper-relevant in terms of when people are on the bus on their way to the shop. How do you make sure that as a brand you are there? And how, when people are actually in-store, are they using in-store as somewhere to view the product, then go home and buy it online? So make sure that whatever device they are using, you have a strategy for their intent at that moment and understand what that intent is.

CR: Local is only becoming more important in search. With Google in particular driving the importance of online to store capabilities, expect to see a steady increase in the number of local-only ad formats as a result, which only facilitate local actions if you’re close to a store, restaurant or dealership. For retail, specifically in the run-up to Christmas, we are working with brands to ensure their local inventory feeds are up to

date to maximise sales through stock control. One of the key focuses for this Christmas will be how well brands adapt to measuring the local impact mobile has. This will be through in-store visit measurement and, potentially, though local signals such as Beacons, as Adwords enables integration with hyper local technology.

(source: Advertising Expenditure Forecast 2015, ZenithOptimedia)

RecommendsDevelop a tailored approach to the quarter. The iProspect strategy team are helping clients understand data and insights to help brands decide whether they are ‘in’ or ‘out’ of the various retail and audience moments in the run up to the big day Organise, unlike the shopping, and don’t leave it until the last minute. Create solutions to manage data across audiences and media channels. Review the collection of audiences from current campaigns that could be targeted in Q4 with a more personalised message Consider platforms and partners that enable connected media and allow an ecosystem approach to planning a total retail experience Start developing intelligent content now to understand what helps to create that important connection with the consumer in time for Christmas messaging

Optimum timing to start Christmas marketing

LY: So when do activities start ramping up? I think by October, 40% of Britons will have commenced their Christmas shopping but do they want to start seeing Christmas ads in October? When is the right time to go? From iProspect’s point of view, we would look at picking your battles. Look at the quarter as a whole that gives you the opportunity to view all your audience strategies. Also, think about reactive, being in the moment and jump on to the trends that are happening around you. Being agile and having everything set up and ready to go can really help impact your brand strategy across the quarter. As our discussion has confirmed, Q4 is a difficult period to predict and raises a number of challenges for retail clients.

ConclusionThe insightful discussion at our roundtable event confirms the complexity of Q4 and the myriad of digital opportunities facing brands during this time. At iProspect our team of retail specialists are helping clients identify their biggest challenges for this period, delivering insight and creating solutions to drive performance.

To wrap up (for lack of a better Christmas pun), we want to revisit three focus issues that we believe are, despite the looming uncertainty in the UK, helpful takeaways for brands in the run-up to the festive period:

Is Google losing out to Amazon in the search for Christmas? A little. We’re never going to ignore Google and the statistics are showing that more and more product searches are starting on Amazon, which means that it is becoming an increasingly important player in search. Brands should begin to think of it as a marketing platform first, then commerce platform second.

Can the modern retailer afford to avoid Black Friday? Yes, but they can’t afford to ignore Q4 and the whole festive period. There are now lots of moments and opportunities that retailers need to plan for, keeping relevancy at the forefront of their digital strategy and building up a consistent and emotional connection between the consumer and brand.

Is the role of the high street still about shopping? Yes, it is. There is a lot of commerce still happening in-store and it remains incredibly important for the majority of brands, but it is now adopting additional roles. The high street has always been a place for browsing and inspiration but has recently taken on a new experience format, connecting the dots between the physical and the digital space, and becoming a platform for consumers to jump from reality to cyber and back again.

Thank youto everyone who joined and contributed to this

year’s Christmas roundtable discussion.

For further information please contact:

Emmaclare Huntriss | Business Development Director

D +44 20 3617 2487M +44 7525 223 881

Emmaclare.Huntriss@iprospect.com