Hello and welcome to Insider Advertising, a weekly newsletter where I break down the most important news and trends on Madison Avenue and beyond. I’m Lara O’Reilly, Insider’s media and advertising editor. If this was forwarded to you, sign up here.
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Let’s jump in to this week’s news:
- The Olympics begin – as does the brand damage control
- What Netflix’s slowing user growth means for ads
- Top marketing and ad salaries revealed
Rings of fire
The postponed 2020 Tokyo Olympics are finally underway. But with COVID-19 infections rising – including among participating athletes – and stadiums closed off to spectators, what’s usually a feel-good tentpole event for advertisers has the potential to serve up more risk than reward. (It could even still be canceled.)
With some polls suggesting a majority of Japanese people – a nation that’s largely unvaccinated so far – are against the Olympics going ahead at all, the official global sponsor Toyota said this week that it was pulling all of its Olympic-themed TV commercials from rotation in Japan. Its execs are also skipping the opening ceremony.
Tim Crow, a sponsorship consultant who described the move as a masterclass in first-mover PR with marginal business impact. It’s a good look in Toyota’s home market to show the company has been listening. Plus, the company’s just being vocal about pulling back when other sponsors are probably making similar moves behind the scenes. (Coca-Cola on Wednesday said it wouldn’t be deploying any physical Olympic activations in Japan). Toyota also already happens to be the best-selling auto brand in Japan, with about a 50% market share.
“Toyota didn’t buy global Olympic sponsorship for the purpose of marketing in Japan,” Crow told me. “It bought global Olympic sponsorship to shut out competitors from the Olympics around the world and to use the Olympics as a strategic marketing vehicle in key countries – not least the US, which is in love with the Olympics.”
(No coincidence, then, that the US Olympic broadcaster NBCU confirmed Toyota hadn’t adjusted its TV ad plans stateside.)
It’s not just official sponsors watching the fast-moving Olympic developments through their fingers, with their other hand grasping the media plan. The retailer Mattress Firm is set to launch a big new campaign this week – with the debut spot running during the opening ceremony – in anticipation of a large live-TV audience.
The prospect for disruption has been top of mind since planning the push.
“It was a very complex set of work,” Mattress Firm’s chief marketing officer, Ramin Eivaz, told me. “As we looked at various scenarios, all we could do was develop a campaign that had the flexibility and elasticity to be able to be stretched in different places.”
As for the next marketing storylines to look out for during this year’s games – blessed are the shoemakers!
“As and when records get broken, there is the old, aged question surrounding doping or super equipment,” said Rory Stewart-Richardson, of the online sponsorship marketplace Connexi. “It will be interesting to see how brands handle themselves.”
Viva La Visa
Insider’s senior reporter Tanya Dua caught up with Lynne Biggar, the chief marketing officer of the official Olympic sponsor Visa, which is launching a refreshed brand identity and advertising activity to coincide with the games.
Visa is a household name. Why did it need a new identity?
We’re known for having our name on 3.6 billion pieces of plastic around the world. But we are so much more than a credit-card company – we are a trusted engine of commerce that provides access to the global economy for everyone everywhere. Our business strategy has evolved over the last many years to be much broader and inclusive of more categories and audiences like B2B payments, fintech partners, P2P payments, remittances, cross-border money flows, and crypto.
The brand work is based on 18 months of insights, learning, and research where we talked to over 10,000 respondents across many regions and countries around the world. So this is really the culmination of a broader strategy that is launching now in some markets in concert with the Olympics, but it really is a broader effort. It will continue for years to come, and the investment is significant.
Did you reconsider timing it with the Olympics?
When you are a sponsor of the Olympics, you are a sponsor for many years. And we’ve seen incredible ROI over those years. Our integrations are very wide-ranging. The Tokyo Olympics have been challenging on many levels for everyone. But if you think about it over time, certainly the ROI over an extended period remains quite strong.
I streamed a stream in time gone by
Could we be witnessing early signs of streaming-subscription fatigue in the US? Netflix lost almost half a million users in the US and Canada in the second quarter.Not so fast, according to GroupM’s global president of business intelligence, Brian Wieser. Yes, it was a tough quarter, but Netflix’s new release slate is likely to ramp up later this year as production gets back to normal. Rival services are growing their investments in original content, too (though Netflix CEO Reed Hastings on the earnings call was quick to downplay any impact from HBO and Disney).
US consumers spent $US20 ($AU27) billion on subscription-video-on-demand services last year but more than $US100 ($AU136) billion on conventional pay-TV, according to Wieser. That leaves plenty of room for consumers to shift their spending habits, especially as media owners are actively disinvesting in their traditional TV networks and deploying content to their subscription streaming services.
“That’s fundamentally why there’s no good news for ad-supported TV in what we are seeing,” Wieser said.
With Netflix indicating user growth in the US is likely to remain sluggish into the next quarter, it’s now looking at new tactics.
But no, advertising execs, no matter how hard you try to will them into existence, ads on Netflix remain an unlikely prospect.
Instead, Netflix is looking at more ways to keep users engaged with the platform. Netflix confirmed this week it’s also making a move into gaming. Much like Netflix’s podcast play, there’s little chance ads will feature in Netflix games. The idea is that games will serve as a marketing tool to re-promote its best content. Indeed, new data shows that 46% of Netflix’s movie commissions this year are remakes, sequels, spin-offs, or adaptations – and you can bet your bottom dollar that franchises and recognizable IP will lead the streamer’s early gaming push.
With my mind on my money and my money on my mind
Do make sure to check out Insider’s new searchable database of the past three years of salary disclosures from the USCIS website. It includes marketing roles across dozens of large companies, plus salaries at major agencies like Saatchi and GroupM.
Friday is the last day to nominate your favorite marketer for Insider’s third-annual list of CMOs to watch – Insider
It’s earnings season, and so far so good for the main advertising holding companies, with IPG, Omnicom, and Publicis Groupe all talking up a strong ad recovery in the ad market, countering a collapse in spending in the early months of the pandemic last year – CNBC/Adweek
The Indian mobile ad specialist InMobi is said to be closing in on a deal to take AT&T’s adtech unit Xandr off the telco’s hands for a fire-sale price – Axios
Flush with cash from its recent IPO, the Chinese tech company Kuaishou is planning a big overseas expansion to take on TikTok – Bloomberg
Speaking of TikTok: The Wall Street Journal went under the hood of the algorithm that influences the videos that populate on your “For You” page. It turns out that watch time is the most important ingredient – Wall Street Journal
The NFL is taking a big chunk of its advertising in-house in a big loss for Omnicom, which oversaw the league’s $US200 ($AU272) million ad budget – Insider
Companies like Instacart and Home Depot are in an intense war for advertising talent – Insider
That’s all, folks – Lara