IPG in partnership with FCB Cogito, recently released the fourth edition of its global study New Realities, which covers seven countries. Terry Peigh of Interpublic Group speaks with BrandWagon’s Shinmin Bali about the more involved consumer, brands owning up to their mistakes, the increasing role of influencers in marketing and more. Edited excerpts:
According to New Realities, favour towards information that builds ‘confidence in brand choices’ and ‘satisfaction with brands’ has grown by 12% and 10%, respectively, in India since 2015, followed by growth in Brazil. How do you view this?
India and Brazil are tracking together in a lot of respects, as per the research. These countries are still aggressively moving up the consumerist curve, if you will. Both countries have a dramatically growing middle class. They are excited and embracing countries — people in these countries have a higher passion for learning about and loving products, and telling others about those products. There is still steady growth in the US. We were expecting to see a bigger jump in China but it is going through a consumerist evolution that is causing it to step back a little. It has grown so quickly and so dramatically in such a short time that it seems to have peaked. The next time we do the study is when we will know whether it is an aberration. What kind of market environment leads the consumer to not gain enough product information? As the study reflects, it is happening in the UK. In many measures, the UK falls down or is tracking slower. I have heard from friends in the UK that this is probably a cultural thing — consumers there do not want to admit publicly the influence that marketing has on their purchase decisions. It is interesting to see how they do not seem too much ‘into’ products when, in fact, it is a strong advertising market; it has a very consumerist culture — brands are working around that. It is a vibrant market; we just think consumers are too reluctant to admit that.
In the last two years, the Indian market has had its shares of brand crises. How do we view that against the finding that consumers are now holding brands to a higher standard than before?
My interpretation is that companies are paying a higher price for their mistakes than before. Consumers are demanding more truth from brands. When brands fail on a fundamental thing such as, say, food safety or basic product quality, they are at a risk of paying a higher price. It just puts pressure on the marketer on such occasions to properly respond in the most honest and transparent way possible. This will vary from country to country. But what we are seeing across the globe is that consumers can be quite forgiving. Look at the car and food companies that have had problems. Consumers have been forgiving, over time. The more transparent the company is in dealing with the problem, consumers are more likely to be forgiving. Admit the mistake, recognise it and move on. When companies do not recognise the mistake and try to hide it, they get caught and that is when it gets uglier.
How has the proliferation of influencers on social media affected consumers and their purchase decisions?
Consumers have their antennas flying a bit higher. They are a bit more concerned about the veracity and legitimacy of an influencer. This could also be why micro-influencers are doing so well. People are willing to place more trust there; a lot of that also has to do with what the influencer has to say and how she/he says it. The key to managing influencer programmes is to allow them to speak in their own voice. Brands need to resist the temptation to over-manage the content. Once it starts becoming marketing-speak, you lose the consumer. You have to be willing to let go and take the risk that there will be failures. There will be times when you would have let go too much or let go with the wrong person. This can be very labour intensive, which is why there are companies around the world who do nothing but manage influencers. The key, over time, will be to assess to what extent consumers become more doubting of the truthfulness of a blogger, as bloggers get paid. Right now, they are accepting the truthfulness quite well.
The role of advertising in India saw a small jump from 56 to 61% over a two-year period. Is that an impressive rise?
If we look at it over the last four years, it is a significant rise given that it was 42% in 2013. Advertising provides brand affinity, passion and emotional context that you don’t get from a lot of other marketing channels. To me, this is a very reassuring rise from an advertising standpoint for India. People still value the channel and they are continuing to get something out of it.
But digital has changed how advertising is done…
Marketers are trying to understand whether their content on digital has emotional context, or is it just factual. It is an increasingly asked question around the world. As digital becomes brief, it becomes a shallower message; so does that message still have the right power that it had? At the same time, digital embraces YouTube and content there can be long format. It is about figuring out the configuration which will let you deliver your message on a brief, fact-based, immediate platform.
What risks are emerging as more companies embrace tech?
It is about recognising the latecomer consumer. Not every consumer will be as tech-friendly as say, a 22-year old. It is recognising that you do not want to throw away consumers who do not adapt to your technology. We are seeing this even now — not everyone is going to want to use Apple Pay, for example. This, in fact, also reflects in the study where it shows that consumers in the UK don’t quite enjoy technological advancements as much as other markets in the study.