The Brexit Effect

15 March, 2017

The triggering of Article 50 by the government confirms a huge decision by the British people. How will Brexit affect UK Plc? I went and talked to some of its marketers…

Brexit means Brexit, but we can’t agree what No means

English is a Germanic language. It’s also a Romance language following lengthy visits here by the Romans and Normans. The Vikings contributed a layer (Thursday, husband, law, ugly) and so did colonialism (dinghy, trek, pyjamas, jungle). The resulting complexity drives English students mad everywhere, but offers rich possibilities for communication. And non-communication. In English you can talk for days and say nothing, which is very useful for politicians and managers who seek ambiguity. Earlier this year Theresa May gave a speech about a ‘Global Britain’ which offered some clarity about Brexit, but not much. The reaction of Europeans can be summarised as follows: “Nein/Non/Nee/Nej, you will not leave the EU and cherry-pick from the Four Freedoms”. For some in Britain this means No, as Mrs Merkel and others keep trying to tell us. For others, European thinking obeys the rules of English (because it’s the best European language), where No actually means Maybe. This second group is sure Brexit will be a huge success. 

Farage in Brussels, 1 2 17

The outcome of the Brexit negotiations? Absolutely no idea

Long-term thinking is harder than usual, what with uncertainty surrounding the EU and Theresa May’s new best friend in Washington. So marketers are developing two plans in parallel: adapt to the reality they can see outside their window, and prepare for a life after Brexit which will probably start in 2019. And what will this life look like? For now there are no facts; only speculation.

The economy? So far so good

Confidence is fundamental to both customer and marketer, so this question is central. Brexit voters scoff at the pessimists who predicted a recession after last June. It never happened and the Bank of England has now raised its economic forecast three times. The UK will grow by 2% this year and 1.6% in 2018. Last year ad spend grew by 2.1%, more than expected, but will shrink by -0.7% in 2017 and grow modestly (+0.7%) next year (IPA Bellwether report on Q4 2016). 

Rising input costs for UK manufacturing:Markit 1217

The outlook for importers and exporters 

Overall, however, business leaders are worried: 66% think the impact of Brexit will be negative (Ipsos Mori, 5 February). In the short term, rising input costs (what we pay for the goods we have to import) are causing inflation which will slow British domestic demand. The pricing battles have already begun: Unilever recently wanted to raise some of its prices to cover higher costs. Tesco refused because it is anxious not to lose share to competitors like Aldi and Lidl. Exports have risen since the pound devalued, but it is too early to say if higher input costs will remove the advantage our exporters are now enjoying. And Brexit has emboldened our European rivals who sell services to the EU. Irish lawyers are placing ads to remind European clients that they speak English too. Consultancies based in Brussels are claiming that the location of their British competitors is already a handicap. Paris, Frankfurt and other cities are trying to seduce global businesses away from London.

Toblerone

Tired of the fog? Try the frogs!

London as EU HQ? Maybe

Many global firms keep their European headquarters here because we belong to three clubs: European, Transatlantic and Anglophone. What will be the impact of Brexit and can global businesses wait two years to find out? Hard to say, but there is certainly no point keeping a European HQ that cannot sell to the EU. In January HSBC, UBS and JPMorgan Chase all talked at Davos about plans to move from the UK. And then there are the EU entities based here. If, for example, the European Medicines Agency left London, the impact on our pharma industry would be profound.

The rush for certainty

A global trend is giving Online an ever-bigger share of the marketing pie. In the UK last year it was worth 50% or £10 billion, up from £224 million in 2000 (Advertising Association). Google and Facebook are fast building a duopoly, taking 70% of US online spend in 2016 (Advertising Bureau). Changing consumer behaviour is not the only factor. The appeal of a reliable ROI (return on investment) is especially strong when marketing departments can’t see what the future holds. And so adtech firms are promising new levels of sophistication in targeting and measurement. Precision is seductive, but wise marketers know that they must also make sense of the data, which is an art. Not to mention the perennial need for big, bold, creative ideas.

Take back control tweet

The opportunity

There is renewed focus on how brands are perceived, say the marketers I spoke to. Reputation is almost everything, especially in the absence of hard facts about Brexit. Relationships based on trust are the most likely to survive Brexit intact.

What to fix

Marketers also discussed what they need to fix. First, financial waste gets most attention when times are tough, and in 2017 marketers will demand more transparency from programmatic. Procter & Gamble’s Chief Brand Officer believes the media supply chain is “murky at best, fraudulent at worst” (IAB Annual Leadership Meeting, 2017). Last year WPP spent $5 billion and $1.7 billion advertising through Google and Facebook. Its boss, Sir Martin Sorrell, thinks adtech firms will earn trust when they stop “marking their own homework”. Secondly, the growth of ZBB (zero-based budgeting): businesses too often use last year’s spend as their benchmark for what to buy this year. Starting from zero, with no budget guaranteed, can make marketers think much harder about where they will get best value for money. Unilever and Diageo use it and like it. Thirdly, marketers should do much more to understand people who are not like them. New BBC research confirms that those who are most pro-Brexit tend to have the lowest levels of education. Highly educated marketers in big cities everywhere (and not just in the UK) need to understand fast why anti-EU populism works.  

This article first appeared in the German magazine, Marke 41, spring 2017

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Ready for the Silver Rush?

1 December, 2016

The grey market has never been so lucrative. So why is marketing to older consumers so lame?

When you reach 100 in the UK you get a message from Her Majesty. Thirty years ago she sent about 3,000 birthday telegrams annually. Today the number is over 14,500, and the team at Buckingham Palace is expanding fast to keep up. By 2035 it will need to congratulate 58,000 100 year olds (Office of National Statistics).

Perhaps our flourishing older neighbours are changing attitudes to age. The Queen is this country’s longest reigning monarch. At 90 she can still lay a wreath at London’s war cenotaph and walk backwards. The next US president will be the oldest ever when he enters the White House. The 2016 Nobel laureates for physics, chemistry and medicine are mostly over 72. Bob Dylan won his Nobel prize for literature at 75.

Age is unlike race, gender and the other diversity categories. “We don’t grow white or black, but we all grow old,” said Robert Butler, the man who coined the word ‘ageism’, or prejudice based on age. Yet enlightened thinking about older people is not widespread. British policies for its ageing population are woefully inadequate (the International Longevity Centre, 2016). The OECD is warning its members of a looming pensions crisis. Age discrimination has long been against the law (Canada and the USA: 1967, Ireland 1998, UK 2006), yet older people often experience it. Many workers believe it begins before they hit 50. In some sectors, like technology, ‘too old to work here’ comes much sooner. (See @ageatwork for good research and insights)

Older consumers

There is also strong evidence (at least in the UK and the US) that those selling to older consumers often fail to understand them. The signs are not difficult to spot: the lazy stereotypes, the stock photos that reproduce these stereotypes (see Pritchard & Whiting 2015), the absence in marketing media of older people, especially women, so that we almost forget they exist.

There are some great examples of intelligent approaches to the grey market. Dove positions itself as pro age, not anti age, in contrast to many brands that promise to turn back the clock for older consumers.

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A recent Gucci campaign on Instagram features the 79 year old actress Vanessa Redgrave. Online fashion brand Missguided uses 88 year old Baddie Winkle because she exudes the confidence that teenagers crave. The 2017 Pirelli calendar defiantly resists ‘the terror of perfection.’ Companies like Independa, Sabi, Kimberley-Clark design products and services that serve older people without patronising them. And, behind the scenes, some firms (like BMW) have seen that better ideas emerge when they give equal status to youthful energy and older experience.

But much marketing to older consumers is not thoughtful. A recent poll says that only 31% of marketers factor the longer lives of consumers into their planning (EIU). And 68% of British 65-74 year olds ‘don’t relate’ to the advertising they see (The Economist).

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This is very odd, because the grey market will be lucrative for the foreseeable future. The over 60s are the fastest-growing consumer group in rich countries. They’re already spending $4 trillion. By 2030 this group will be a third bigger and explain 60% of urban consumption (McKinsey Global Institute, April 2016). So the obvious question is this: why do marketers give so little thought to such a big opportunity?

Targeting the older consumer
Age is a difficult concept. It is fixed in time but also subjective and fluid. The effect of age varies from significant to zero depending on the individual and their context.

We love categories. Because they seem to make the world predictable, we give them a status they do not deserve. But if we aren’t careful we come to think that everything inside a category is homogenous, and everything outside different. Age categories are a very poor guide to what makes the target consumer tick. All that is reliably the same about two sixty year olds is how long they have spent on the planet. And the essential, universal difference between a 70 and a 30 year old? Only chronology. They are separated by 40 years, but may well have the same desires, habits, preferences.

But we tend to use age as shorthand for all sorts of unsafe generalisations about older consumers. How well they deal with technology, for example. Did you know that more over 55s own a tablet than under 55s? (Yougov: Turning Silver into Gold, 2014). No, nor did I.


Older age is automatically problematic when youth is the dominant idea in marketing. Think of the thousands of products offering to make people look younger. Behind this sits the widely held belief that looking older is bad. Marketing has made it hard for us to associate ‘potential’ and ‘aspiration’ with older consumers, but these qualities can apply just as well to them. The absence of older people in creative and tech does not help. The median age at Facebook, Linkedin and Google is 30. Among the UK’s advertising agencies it’s 33 (Campaign, November 2016).

Positive stereotypes can be as misleading as negative ones, and just as likely to annoy the older consumer. Looking good for my age?! What’s wrong with just looking good?’ The UK minister for pensions recently purred: ’Older people are reliable, polite and turn up on time’. Who wants to be that safe and boring? And how many younger people will accept the implication that they are unreliable, rude and late?

7 Golden Rules for the Silver Rush

Are marketers really ready for the silver rush? If they/you are unsure how to talk to the older consumer, here are 7 rules to follow…

1. Few want to be labelled or treated old, because age is tainted. We love aged cheese. We adore aged wine. But aged humans?

2. Understand ageism. Study why marketing to older people is often unhelpful.

3. Ignore their age unless your product is birthday cards.

4. Stop seeing age as a problem.

5. Resist negative and positive stereotypes. And resist stupid euphemisms for ‘old’

6. Don’t make jokes about age. You don’t have their permission.

7. Develop products and services with them, not for them.

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Sugar: The new tobacco

March 17, 2016

On 16th March the UK government decided to tax sugary drinks in the face of widespread opposition from the industry. This should be just the start… We lust after sugar like it’s going out of fashion. This is exactly what the anti-sugar lobby hopes to achieve, but the challenge is enormous. Sugary drink is hard […]

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VW: will it contaminate ‘Made in Germany’?

November 5, 2015

It’s too early to understand the consequences of VW’s stupidity, but here – as everywhere – there is much speculation. Some of it is pessimistic: Dieselgate, following the Siemens scandal in 2006, shows that ‘Made in Germany’ isn’t trustworthy. That popular English word Schadenfreude describes many of these comments. Some is more optimistic, predicting a […]

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Inside her pretty little head

September 16, 2015

In August there was a storm in English language newsfeeds worldwide. It was over a tweet by Bic Stationery in South Africa that urged women to ‘look like a girl’ and ‘think like a man’. You may have seen it. It set the twittersphere alight with complaints. At first Bic tried to explain that its […]

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Labour need to complicate themselves

May 14, 2015

The headline story of Labour’s disastrous UK election result last week is that people still didn’t trust the party’s competence, despite its best efforts to show that its manifesto was fiscally responsible. Former Labour big hitters have been swift to say what they think. In January Tony Blair (Labour’s leader 1994-2007) predicted a general election […]

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Do brands make life too easy?

April 1, 2015

Here is a definition of brand: not the first and certainly not the last. By creating powerful ideas, brands help us work out who we are and how we fit into the world we inhabit. They begin as simple propositions, and the successful ones become the IBM or Adidas or Louis Vuitton label we willingly […]

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Why do we trust academics more than CEOs?

January 31, 2014

Last week the new Edelman Trust Barometer confirmed that there is no public figure we trust more than the academic. This has been a pretty consistent finding since the start of the survey in 2001: academics average 65% trustworthiness with little variance between years. Meanwhile, our perceptions of all the other roles featured in the […]

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Don’t say what you’re not. Say what you are.

March 14, 2013

I saw an exciting film this week. It’s called ‘NO’ (see trailer here) and it’s about the advertising campaign that helped to kick General Pinochet from power in 1988. It’s really really good. It reminded me how a big idea can change the world if it’s clear and simple. Also that the best brands tend […]

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Gangnam style and senior managers

November 20, 2012

Gangnam Style is a hit video by South Korean artist PSY. It was uploaded to Youtube in July 2012 and has so far scored 770 MILLION hits. It began as an aspiring number one song in Korea, got noticed by Robbie Williams and went viral. Unless you’ve been living under a log you will have […]

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