ANDRA CONSTANTINESCU Uncovering emerging trends in sustainability and predicting the sales impact of sustainability advertising - SORMA
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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
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
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)
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)
For the world's largest companies, "nearly 100%" of CEOs believe Sustainability is critical to their companies' future success. UN Global Compact - ACCENTURE
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
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
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
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
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