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Globalization doesn’t imply globally constant with out context

Economic

Globalization doesn’t imply globally constant with out context

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As the economy recovers from the lows of 2020, it’s important to remember that in the age of globalization, this is not a universal recovery, says Carat’s global client and brand president Fiona Lloyd. As part of The Drum’s Globalization Deep Dive, she tells us how brands need to know their different customer segments and develop strategies to use the right messages in the right context.

In a global, interdependent world, we cannot look at “a global plan” or isolated markets. We need to see the bigger picture. As the world recovers from the disruption of the pandemic, we need to be aware that this recovery hides some stark differences between and within markets that will affect consumer thinking and behavior in the years to come.

This is a year of economic recovery, and luckily, advertising spending is also rising to near pre-pandemic levels. OECD data predict global GDP growth of 5.7%, with some above this average (China, 8.5%) and others lagging (Saudi Arabia, 2.3%).

Our own ad spend forecasts also paint a rosy picture overall, with an increase of 10.4%, which brings us above the 2019 level, but this, too, hides local differences. While spending is expected to grow 13.7% in North America and 7.5% in Western Europe, some markets will inevitably lag behind the average, including just 3.4% in Spain and 3.3% in Germany.

As an industry, our ad targeting has gotten even more sophisticated, with digital media giving us new ways to target messages to specific audiences while being almost invisible to those who don’t belong to that group. When done intelligently, it has enabled brands to offer different messages to different groups based on demographic, geographic, and other factors. Dynamic content optimization also allows for automatic variations of creative text to either make advertising more personal and engaging, or to ensure people are not shown products that are out of stock near them.

Now more than ever, we need to use these skills to ensure that as we recover, we tailor our messages to our understanding of the target audiences and take a more personalized approach to increase effectiveness.

Those of us fortunate enough to be able to work from home may have saved money (fewer expenses like travel and fewer ways to spend money on vacations) while those in other industries, e.g.

The World Bank reports that Covid and the ongoing effects of the Delta variant have been actively exacerbating disparities, especially in smaller countries where access to vaccines is much lower. In the UK, according to the Trussell Trust, we’ve seen record usage by food banks and huge differences in vaccination rates across the country due to cultural factors.

As marketers, we need to understand that there will be huge disparities among consumer groups, with some back in the luxury goods and experiences market while others are on an even tighter budget than before. Addressing these differences requires targeting and messaging skills, but most importantly, understanding of people.

We see established companies creating new budget lines to target more cost-conscious customers. Just as in 2008 budget supermarkets like Aldi and Lidl saw huge growth in the UK, the pandemic saw the new Anyday range from John Lewis, which covers fashion and homeware basics (also inspired by the shift to work from home ) while Asos launched AsYou, a cheaper private label with items between £ 8 and £ 22.

At the other end of the scale, the luxury market leads the way. After struggling during the lockdown (no dressing, reduced foreign travel and duty-free shopping), the fashion houses are recovering. Kering, which owns Gucci and Balenciaga, reported a 54% year-over-year sales increase this summer (and 8.4% year-over-year).

The actions and services of brands depend on the consumer perception of the associated exchange of values. At the end of the budget, consumers want to feel like they are getting a bargain, getting more for their money and still getting something new and enjoying the shopping experience including the anticipation of the packages arriving.

Luxury consumers love knowing how to get something with history and provenance. Many were able to save even during the lockdown and are now ready to go to events again and may be able to afford more than before. In fact, new audiences may enter the luxury market with a higher disposable income than they would otherwise have.

The gap between regions, markets and consumer groups is growing as the world recovers. With so much movement and changes on a global and even market level, we have to pause and recalibrate our media plans to find out where our customers fit into this spectrum and adjust placements and targeting accordingly.

The impact of these disparities and the flexibility that smart brand owners have in adapting their offerings must ultimately be reflected in changing “media” practices. We should move from obsessing over data to a fixation on insights into people. Media must consider the consumer experience in order to orchestrate more personal, connected, and ongoing narrative across disciplines and regions. We need flexible and inspiring organizational ideas around the most important global brand narratives, rather than fragmented campaigns.

After all, in an era where people are increasingly distracted multitaskers, we need to make sure that precise planning goes beyond aiming. We need to consider other emerging metrics like “attention seconds” to ensure we choose the right platforms, contexts, and formats when delivering more meaningful experiences wherever the audience is in the world.

Fiona Lloyd is Global Client and Brand President at Carat.

For more information on how technology and trends are bringing the world together, check out The Drum’s Globalization Deep Dive.

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