ANDRA CONSTANTINESCU Uncovering emerging trends in sustainability and predicting the sales impact of sustainability advertising - SORMA

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ANDRA CONSTANTINESCU Uncovering emerging trends in sustainability and predicting the sales impact of sustainability advertising - SORMA
Uncovering emerging trends in sustainability and
predicting the sales impact of sustainability advertising
An applied case of Digital Analytics and AI
on the Romanian market

 ANDRA CONSTANTINESCU
 Account Director | Creative Domain Lead, Kantar Romania
ANDRA CONSTANTINESCU Uncovering emerging trends in sustainability and predicting the sales impact of sustainability advertising - SORMA
Contents
1 Sustainability in the Current Context

2 Approach

3 Looking at Emerging Trends to Identify
  Opportunities

4 Getting Sustainability Communication Right:
  Romanian examples & Learnings

5 To Sum Up

                                                2
ANDRA CONSTANTINESCU Uncovering emerging trends in sustainability and predicting the sales impact of sustainability advertising - SORMA
Globally, sustainability remains a top priority that
                              people are worried about and believe need to be
                                                    tackled

% People mentioning big issues that need to be solved

  35%                35%
                                28%
                                               25%

                                                             17%            16%
     21% Inflation

                                                                                            15%       13%
                                                                                                                 11%            11%
                                                                                                                                              6%

 Economy             War    Climate issues     Social     Work, Pay,      Violence &         Covid    Health   Government     Resources /   Education
                                              problems   Unemployment       Crime          Pandemic            and Politics     Energy       related

Source: Kantar’s Global Issues Barometer – Wave 2, April 2022
Q5 What are some of the big issues that you think something needs to be done about? (OE)
Base: Total (19 countries)
ANDRA CONSTANTINESCU Uncovering emerging trends in sustainability and predicting the sales impact of sustainability advertising - SORMA
Businesses are expected to take action on many
                                    fronts, starting with climate - related ones

Whose responsibility is to help solve/tackle this issue? Businesses…
  67%

                  47%
                                  43%
                                                  35%           35%       33%
                                                                                     25%      24%
                                                                                                           20%          18%
                                                                                                                                   11%

  Climate       Work /Pay       Resources        Inflation      Economy    Social    Health   Covid-19    Political /   Violence   War
  issues                         / Energy                                 problems                       Governments    & Crime
                                                                                                           issues

Kantar’s Global Issues Barometer – Wave 2, April 2022
Q5a. Whose responsibility is to help solve/tackle this issue?
Base: Total (19 countries)
ANDRA CONSTANTINESCU Uncovering emerging trends in sustainability and predicting the sales impact of sustainability advertising - SORMA
For the world's largest
companies, "nearly 100%"
of CEOs believe
Sustainability is critical to
their companies' future
success.

UN Global Compact - ACCENTURE
ANDRA CONSTANTINESCU Uncovering emerging trends in sustainability and predicting the sales impact of sustainability advertising - SORMA
There are trillions of dollars of potential revenue
sitting in untapped opportunities

 $382                             $630                               $12
 billion                          billion                            trillion
 Spending power of the            In net material cost              In four key
 most sustainably                 savings if circular               economic areas by
 engaged in the FMCG              economy* adopted in               2030*
 sector alone                     manufacturing sectors
                                                                    Better Business,
 Kantar’s                         Ellen McArthur                    Better World
 #WhoCaresWhoDoes                 Foundation                        WBCSD

1. The circular economy is based on three principles: Eliminate waste and pollution,
Circulate products and materials; Regenerate nature.

2. The four areas are: Energy, Cities, Food & Agriculture, Health & Well-being.         6
ANDRA CONSTANTINESCU Uncovering emerging trends in sustainability and predicting the sales impact of sustainability advertising - SORMA
But becoming a sustainable business and taking advantage of it isn’t an
easy job, as the following stand in the way

ACCOUNTABILITY               THERE ARE SOME                   AND OPPORTUNITIES
                             MUSTS TO SOLVE                   TO STAND OUT

People want to take          Companies need to tackle         …and also use ‘swords’ to
action, but they don’t see   some issues first to ‘shield’    stand out from others
it as their job to lead      themselves from complaints

CYNICISM                     VALUE-ACTION GAP

People are cynical about     People have many barriers
brands jumping on            preventing them from buying or
the bandwagon                acting sustainably
                                                                                          7
ANDRA CONSTANTINESCU Uncovering emerging trends in sustainability and predicting the sales impact of sustainability advertising - SORMA
3 of the ways in which we help in the sustainability
                                                      journey

  Identifying consumer                                    Identifying the sustainability                             Ensuring communication is
  expectations                                            topics that are hot and here                               effective
                                                          to stay
  What consumers expect from companies Sustainability topics searched for                                            Checking if it cuts through
  Themes that fit with the industry: ‘swords Mass-market trends                                                      Checking if it builds affinity and/or
  and shields’                               Disruptor trends                                                        differentiation for the brand

                                                          Based on big data

1.Through the Sustainability Sector Index 2. Through Emerging Trends (Dx analytics) 3. Through advertising pretesting with Link/Link AI
ANDRA CONSTANTINESCU Uncovering emerging trends in sustainability and predicting the sales impact of sustainability advertising - SORMA
Identifying opportunities by
looking at topics that are hot
and here to stay
ANDRA CONSTANTINESCU Uncovering emerging trends in sustainability and predicting the sales impact of sustainability advertising - SORMA
People’s sustainability concerns are rooted in
                                      what impacts their daily lives

Issues impacting…
THE WORLD
Concerned about issues that
impact the broader world.

MY WORLD
Concern for issues that
impact my life.
                                                                          1      Experience of environmental issues and structural
                                                                                 social inequalities is increasingly real and raw.

                                                                           2
ME
Concerned about issues that                                                      Global issues become most relevant when
impact me personally.                                                            framed in local context.

                                                                           3     Less notion of abstract ‘sustainability’, more
                                                                                 focus on specifics.

                                            Source: Kantar Global MONITOR 2022
Survey data reveals that Romanians are primarily
                                         concerned with social issues. Climate action &
                                             water pollution are also big topics….

          4.4
                               4.1                 3.9                    3.7                   3.7
                                                                                                                           3.4                         3.4                         3.4                         3.3                      3.3

 Child labour and           Poverty           Access to               Air pollution     Water pollution              Access to jobs Improper disposal Lack of safe waterRights at work and     Business
worker exploitation                           healthcare                                                             with a sufficient of hazardous                        living wage     corruption and tax
                                                                                                                       living wage         waste                                                evasion

DECENT WORK AND ECONOMIC   NO POVERTY    GOOD HEALTH AND WELL-BEING    CLIMATE ACTION   CLEAN WATER AND SANITATION   DECENT WORK AND ECONOMIC   RESPONSIBLE CONSUMPTION AND   CLEAN WATER AND SANITATION   DECENT WORK AND ECONOMIC   PEACE, JUSTICE AND STRONG
        GROWTH                                                                                                               GROWTH                      PRODUCTION                                                GROWTH                  INSTITUTIONS

       Environmental concern             Social concern

Top concerns on sustainability (out of 43 topics – Max Diff mean score of importance)
Note: please refer to our “How to interpret Max Diff results?” slide in the appendix for information on how to interpret the results
Source: Kantar Sustainability Sector Index 2022 Q16. Which of the following environmental or social issues should companies be most concerned about
tackling and least concerned about? (Max Diff) Base n =1000
…and, in searches, we see a growing interest
towards the environment (e.g. Climate Change,
           ESG, Carbon Footprint)

                                  Topic by trend                        Increase 2022   Size
                                  Climate Change                        169%            63,602
                                  Environmental, Social and Corporate   165%            5,766
                                  Governance (ESG)

                                  Carbon Footprint                      83%             3,241
                                  Inflation                             74%             86,919
                                  Solar Energy                          71%             407,887
                                  Renewable Energy                      57%             10,552
                                  Disposable Product                    54%             3,986
                                  Solar Power                           50%             17,286
                                  Circular Economy                      44%             3,939
                                  Diversity                             41%             5,598
                                  Wind Turbine                          41%             49,386
                                  Animal Testing                        38%             2,375
                                  Women’s rights                        38%             3,684
                                  Unemployment benefits                 37%             3,164
                                  Waste container                       37%             43,331

          Emerging Trends Study on Sustainability -2022, Romania
Social and economic aspects (such as taxes, minimum wage,
                         inflation) remain important, as they are impacting life directly.
                             But we see an additional focus on alternative energy &
                           reducing waste, which gain their place in becoming mass
                                             market in our country

Topic by size                      Increase 2022       Size
Discounts                          -7%                 1,040,804
Credits                            -7%                 811,578
Tax                                7%                  478,159
Solar Energy                       71%                 407,887
Minimum Wage                       25%                 224,794
Car Rental                         -3%                 184,715
Herbicide                          15%                 136,841
Waste                              6%                  129,270
Recycling                          16%                 119,975
LED Lamp                           17%                 112,961
Packaging and Labeling             4%                  112,806
Veganism                           16%                 91,978
Inflation                          74%                 86,919
Health Insurance                   -2%                 74,584
Climate Change                     169%                63,602

                                          Emerging Trends Study on Sustainability -2022, Romania
Zoom in:
Renewable Energy

                   14
Romania – Interest in Alternative Energy topics
                                                              over 2021 & 2022

                                                                                (Potential demand & % growth)

Energy options are of major
interest during this period: solar,                                            407887
                                                                                                            Solar Energy                  +71
wind, renewable: driving the
change towards more                                                            112961                       LED Lamp                      +17
sustainable resources in
                                                                                49386                       Wind Turbine                  +41
Romania.
                                                                                49021
                                                                                                            Wind Power                    +34
                                                                                17284
                                                                                                            Solar Power                   +6
This is connected with two areas:                                               14929                       Electric Energy Consumption   +50
climate action and reducing the
carbon footprint; and increasing                                                10552                       Renewable Energy              +57

cost of traditional energy                                                       6409                       Geothermal Energy             +16
sources and their scarcity.                                                      2595                       Natural Gas Prices            +23
* Selection of topics/brands/markets of focus                                    2397                       Alternative Energy            +13

                                                           Emerging Trends Study on Sustainability -2022, Romania
Interest in solar energy rises more in Romania than globally,
           showing the potential of the renewable energy industry locally….

Globally

Romania

                                       Emerging Trends Study on Sustainability -2022, Romania
…as well as Romanians’ pragmatism to finding solutions to
                                   lower the costs of traditional energy sources

             Solar energy is becoming mainstream as
             a popular and attractive alternative to
             other sources.
Mainstream

             • What elements are people focusing on?
               photovoltaic panels, solar panels, solar lamp,
               pressurized solar panel, solar battery, solar
               invertor, solar boiler, solar streetlamp

             • What brands connected?
               Dbsolar, Dedeman

             • What specific needs?
               Hot water, boiler

             • Is interest likely to stick?
               Yes, we are likely to see growth in 2023 also.
What is of interest when it comes to alternative energy?
                               Top 10 by growth, 2021-2022
Disruptors & Mainstream

                          Wind Turbine, Wind Power                            LED Lamp,                                         Alternative Energy, Renewable
                          Pragmatic and concrete interest in                  Electric Energy Consumption                       Energy
                          wind turbines & plants, also                        LED alternative also increasing,                  Boosting interest in all types of
                          considering pricing and house                       reaching for more energy                          energy/resources renewable and
                          needs.                                              reduction.                                        funds for accessing such sources.

                                                                                                                                Searches: AFM (environment fund administration),
                          Searches: Romstal (brand), eolian, eolian
                                                                              Searches: led bulps, led, lamp, h7 bulb, Osram,   green energy, solar energy, renewable energy,
                          energy, eolian/wind turbine, eolian price, eolian
                                                                              led lamp, e27 light bulb, eMag                    eolian, NERO Renewables (brand), renewable
                          for the house, turbines, wind power plants,
                                                                                                                                resources
                          eolian 3 kw, 5 kw, wind farm, wave power plant,
                          eolian plant advantages and disadvantages
What is of interest when it comes to climate change?
                                Top 10 by growth, 2021-2022
Disruptors & Mainstream

                          Air quality, air pollution                          Carbon Footprint,                                   Climate Change, Global
                          People wishing to understand                        Greenhouse Gas                                      Warming
                          more about pollution and desire                     Personal or product, service                        Growing knowledge and
                          for quality air, connected also to                  footprint, connected also to                        popularity also boosted by the
                          quality life                                        global warming.                                     recent pandemic.

                          Searches: what is air pollution, air quality                                                            Searches: what is climate change,
                                                                              Searches: carbon footprint, footprint calculator,
                          Bucharest, environmental pollution, pollution                                                           Antarctica, Greta Thunberg (activist), global
                                                                              global warming, greenhouse effect, greenhouse
                          sources, air quality map, air quality sensor, air                                                       warming, global warming causes
                                                                              gases
                          pollution effects, air hygiene
Getting
communication
right
Brand ‘Power Contribution’

Simply talking about
brand purpose and
                               79%                       27%
sustainability
doesn’t equal
success                      With 'Purpose'           With 'Purpose' but
                           AND fits with brand        weak fit with brand

                       Source: Kantar Link Database
In fact, both authenticity and emotional storytelling are key in
                          the success of purpose/sustainability ads

Authenticity

Storytelling
Ads with social or environmental messages can
                                         evoke strong emotions

 Ads with social/environmental
 messaging make people feel                                                                                           …but also

   PROUD                           INSPIRED                   AFFECTIONATE                                               GUILTY          SAD

     +26                              +21                              +19                                                +18            +17
Source: Kantar Link Database – average percentile difference for ads with social/environmental messages vs. ads without such messaging
Top performing ads with sustainable or social
                            messaging have a more emotionally positive and
                                            uplifting tone

                                                              Facial responses to                                     Top performers
                                                              sustainability/social                                   Bottom performers
                                                              messaging ads

Top performers elicit        Bottom performers more
more positive emotions       likely to be above average on

⁻   Valence (overall         ⁻   Sadness
    emotional positivity)    ⁻   Downturned mouth
⁻   Smiles                   ⁻   Brow furrow
⁻   Joy                      ⁻   Confusion

                                                             Smiles     Joy      Valence   Sadness Downturned Brow furrow Confusion
                                                                                                     mouth
Both top and bottom performers evoke feelings of
                                         guilt…

Average percentile                                                                                                                                                 Top performers
                                                                                                                                                           84
                               80                                       78                                                                                         Bottom performers
                                                                                                                  76
                                                             64
                                                                                                                                                56

                                                                                                      43
                      39

                      Annoyed                                  Guilty                              Inadequate                                      Sad

        Difference      -41                                       -14                                      -33                                        -28

                              Base: 295 ads – Top & Bottom 25% of ads with environmental/social messages, based on overall effectiveness on Kantar Link projects
…but top performers are better at leaving people
                      feeling confident, inspired, despite the difficult
                                     issues they tackle

Average percentile                                                                                                   Top performers
                                                                           91                         91             Bottom performers
                      86
                                                82

                                                                                                             55
                                                                                    42
                             31                          28

                     Confident                  Excited                    Inspired                    Proud

        Difference     +55                         +54                        +49                          +36

                      Base: 295 ads – Top & Bottom 25% of ads with environmental/social messages, based on overall
                                                  effectiveness on Kantar Link projects
Successful sustainability ads often use psychological levers such as these
ones to close the value-action gap and elicit positive feelings

Nature                 Implementation        A sense                Mitigating present     Social learning
connectedness          intentions            of control             bias (DO IT NOW)       (THIS IS HOW YOU DO IT)

People’s innate        A strategy in the     A sense of control     People’s inclination   Observing, modelling, and
predisposition to      form of an ‘if-then   is one of the levers   to focus on the here   imitating the behaviours,
connect and identify   plan’ that can        of people’s innate     and now and prefer     attitudes, and
with the natural       increase the          motivation for         immediate rewards      emotional reactions of
world                  chances of goal       psychological growth   at the expense of
                                                                                           people
                       achievement                                  long-term benefits
Coca Cola – Focusing on the collective

                     Coca Cola - LadyBird

Enjoyment                                            Psychological
Top 20                                               levers used:

Relevant                                             Nature
Top 30                                               Connectedness

Affinity                                             Implementation
Top 30                                               intention
Branding
Top 30                                               Giving a sense
                                                     of control

                        Link Pretesting results
We’ve tested 12 video ads with a sustainability
                                      message from Romania
                              to predict their sales and equity impact

Kaufland – Local                  Carrefour – Little box of         Fashion Days - Black Friday                 Ikea – Green Friday 2021
producers 2022                    greens 2020                       2020 - The common sense
                                                                    edition

OMV – Cleaner energy              Ariston – A sustainable           Vodafone – Supernet gives                   Dorna – Supports cleaning
for a predictable future          world starts at home 2022         forests a voice 2021                        of Romanian rivers 2022

Pepsi – The Pepsi taste,          Neumarkt – You can rely            ING – Money can be                         BCR – For a financially
now in a 100% recycled            on proper men to take              taught – Expenses 2021                     intelligent Romania 2022
PET                               care of nature 2022         Testing done with LinkAI, trained on the Link database
Performance in driving impact and equity is
mixed. Most miss the chance to differentiate and
             create brand affinity

               Compared to country pretesting norms
Sustainability advertising is more about
                impacting equity, but can have an impact on
               incremental sales as well when coupled with a
                        motivating promo message

              Fashion Days – Black Friday 2020 – The Common sense edition
Persuasion                                                                  Psychological
Top 5%                                                                      levers used:

Involvement                                                                 ⁻   Mitigating
                                                                                present bias
Top 35%

Short term                                                                  ⁻   Social
sales                                                                           learning
likelihood
88%

                                 Compared to country pretesting norms
Vodafone manages to create differentiation through
               this ad by showing how it helps rangers prevent
                                deforestation

                       Vodafone – Supernet gives forests a voice

Enjoyment                                                                Psychological
Top 40%                                                                  levers used:

                                                                         ⁻   Nature
Involvement                                                                  connectedness
Top 30%

                                                                         ⁻   Implementation
Difference                                                                   intention
Top 35%

                                                                         ⁻   Giving a sense
Power
                                                                             of control
Top 40%

                                  Compared to country pretesting norms
The Ariston ad, although quite passive in style, is
                well liked and well connected to the brand,
              building positive emotions and affinity through
                        making nature feel like home

Branding                                                               Psychological
                                                                       levers used:
Top 20%
                                                                       ⁻   Nature
Enjoyment                                                                  connectedness
Top 35%

Meaningful                                                             ⁻   Giving a sense
                                                                           of control
Top 10%

Different
Top 15%

Power
Top 15%
                                Compared to country pretesting norms
Neumarkt engages through subtle humour,
              ensures brand fit through humour and characters

                Neumarkt – You can rely on proper men to take care of nature
Branding                                                                       Psychological
Top 20%                                                                        levers used:

Enjoyment                                                                      ⁻   Nature
                                                                                   connectedness
Top 35%

Involvement                                                                    ⁻   Giving a sense
Top 15%                                                                            of control

Persuasion
                                                                               ⁻   Social learning
Top 35%

                                     Compared to country pretesting norms
Wrap up

1. Innovate with value in mind   2. Think of the immediate          3. Take advantage of disruptive
                                 benefits especially connected to   trends
                                 how people work or live

4. Stay true to your brand       5. Elicit positive emotions        6. Use psychological levers
                                                                    to close the value-action
                                                                    gap
Q&A
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