2015 Earned Brand Australia

Innovation and the

Earned BrandAustralia

Consumers are embracing innovation

at a faster pace than ever before…

The Earned Brand | Edelman 2015 | pg 2

And yet they feel the pace of business

innovation is too fast

Q349-351. Below are a number of statements. For each, please think about the pace of development and change in business and industry today and select

the response that most accurately represents your opinion. (Not Enough, Too Much) Informed Publics, Australia. (2015 Edelman Trust Barometer)

The pace of development and change in

business and industry in Australia today is…

23%

TOO FAST


JUST RIGHT

22%

53%

TOO SLOW


And what can the

rest of us learn

from this?

Why the contradiction?

How are today’s

fastest-growing

brands convincing

consumers to accept

the risks that come

with innovation?

What are

consumers’

real feelings

about innovation?


What is innovation?

A re-imagination of categories,

products, services, operations,

models, design, etc. that

create more value, for the brand

and for consumers

The Earned Brand Methodology

Timing

April – May 2015

Quantitative Online Survey

10 countries: U.S., Mexico,

Brazil, France, Germany, U.K.,

China, Japan, India, Australia

10,000 respondents, nationally

representative of age, gender,

and region based on most

recent country status data

Behavioral Focus Groups

16 millennials in New York and

London

Mobile Diaries

25 millennials, with them on their

mobiles, for 2 weeks, in Brazil,

U.K., India, China and the U.S.


A global survey of

consumer attitudes

toward brand innovation


People believe in the promise of innovation.

Insight 1

Q5P1: Please select the statement from each group that best represents how you feel. (Innovation is just an overused

term, it’s not leading to anything) vs. (Innovation is essential for us today and it’s helping us to progress). Q5P4: Please

select the statement from each group that best represents how you feel. (Innovation is making us more and more like

robots) vs. (Innovation is opening the human spirit) 10-country global total and in Australia.

Percent who agreed with each statement:

Innovation inspires people

“When you look at

anything innovative,

it will inspire you

and make you feel

more energetic.”

Zhu X, 22, China

92%

innovation opens

the human spirit

innovation is essential

and it’s helping us

to progress

77%

88%

69%


And they believe that business has

the biggest role to find the next big thing

Q15. Where do you think the next big thing will come from? In Australia.

Consumers in

Australia believe the

next big thing will

come from…


BUSINESS

34%

INDIVIDUALS/PEOPLE

LIKE ME

69%

38%

ACADEMICS/UNIVERSITIES

79%

globally

71%

45%

21% 23%

9% 11%

53%

27%

47%51%

15%

37%

Technology Mobile Energy Healthcare Food and beverage Education

But they believe that innovation should come from

industry sectors beyond technology and mobile

Q65: Thinking more specifically about the innovation in the products and services you use throughout your life, what industries do you see

the most innovation in TODAY? Q66: … what industries do you want to see innovation in TOMORROW? In Australia

Percent of Australia’s consumers who say they see innovation coming from each

industry sector today, and who want to see it from each sector tomorrow:

INNOVATION GAP

2628


266

INNOVATION TODAY INNOVATION TOMORROW

WANT LESS TOMORROW WANT MORE TOMORROW

They believe that brand

innovation should have big

goals with societal impact

Q14. What do you think the role of innovation is for brands today and in the future? (in the future) 10-country global total and in Australia.

to improve society

to push our thinking as a society

69% 66

%63

%


agree that brand innovation

needs to impact society(one or more of the following)

in9 10

73%

67% 63

%

to let us be one step ahead of other countries

And they question your motives

66%

70%

65%

69%67%

61%

65% 65%67%

62%

65%

Global Australia U.K. U.S. Japan France Germany Brazil China India Mexico

Q14. What do you think the role of innovation is for brands today and in the future? (today) 10-country global total and in Australia

Percent who say the role of innovation for brands today is “to make more money for the company”:


consumers globally believe brands are innovating to make more money for the company

in2 3


Insight 2

Consumer acceptance of brand innovation cannot be bought.

It must be earned.

The stakes:Because of their concerns, they’re not buying

Q27. Thinking about the below, please indicate which of the following you feel is happening in the world today. … IMPACT ON PURCHASING

DECISION 1 = Has no impact on what I buy … 4 = Makes me not want to buy something. In Australia

say they will not buy

because of their concerns

Percent of Australia’s consumers who feel that each is happening in the world

today, and percent who say their concerns makes them not want to buy something:


87%

Privacy

issues

Being

always onSecurity Environment

3 in 4 have privacy concernsPrivacy concerns are especially strong in

Germany, the U.K., the U.S. and Australia.

66%

74%

61%58% 56%

76%

55%

66% 64%

71%75%

Global Australia Brazil China France Germany India Japan Mexico U.K. U.S.

Q22. Thinking about the below, please indicate which of the following you feel is happening in the world today. 10-county global totals

and in Australia

Percent who feel that each is happening in the world today –Privacy issues:


Privacy issues

74%

“I don’t care if they know I go to the

grocery store—but I don’t want them to

sell information to that grocery store.”

Nick, U.S.

Source: Mobile Diaries

1 in 2 concerned about having to be always onGermany and Brazil are most concerned; Japan and China are less so.

50%54%

65%

36%

53%

63%

41%

29%

57%

46%

53%


Q22. Thinking about the below, please indicate which of the following you feel is happening in the world today. 10-country global totals and

In Australia

Percent who feel that each is happening in the world today –

having to be always on:


Beingalways on

54%

2 in 3 have security concernsSecurity concerns are highest in Japan and the

U.S., and less of an issue in China.

54%

69%

51%

33%

49%44% 44%

75%

41%

64%

71%



In Australia


your security being compromised:


Security

69%

“Some back door issues may leak

personal information, including

personal banking details.”

Yao, China


And the majority have concerns about the impact on the environmentEnvironmental concerns are global, but strongest in Europe and Latin America.

58%61% 62%

52%

62%66%

54% 52%

62%

54%51%



In Australia


impact on the environment:


Impact onenvironment

61%

“Technology and innovation bring

convenience, but it brings problems,

too. Cars change my life, but too

many cars result in air pollution,

traffic jams and parking problems.”

Yao, China



Insight 3

While the promise of

innovation inspires,

people first need

to be reassured.

Consumers are twice as likely to want to be

reassured than inspired by a brand

Q35: When a brand tells me about something, I

want it to… “Reassure me of quality,” “Inspire me”

10-country global total


people want to be

REASSURED

in2 3

people want to be

INSPIRED

in1 3

We may be innovating,

but we are failing them as marketers

Percent who feel that brands have changed a lot, and proportion who

feel that this is the right or the wrong direction:


say brands are not moving

in the right direction in how

they communicate

in2 3

Q20: Thinking about change in the past 5 years, how do you feel the [ … ] industry has evolved in relation to the following

factors: How brands in this sector…(communicate with me) / (listen to me) // (moving in wrong direction) 10-country global total

They feel like brands are shouting at them

What brands say doesn’t feel real

Q21: Please indicate how much you agree or disagree with the following statements. (I’m getting bored/frustrated by constantly being told I

need to upgrade/update the products I already have.) (Top 2 box). 10-country global total and in Australia. Q8P1: The way magazines, the

internet, advertising, can all enhance photos… (Makes me more inspired than ever before by what I see) vs. (Makes me wonder what is real,

and what I should believe) 10-country global total and in Australia.


57%

because of photo manipulations

in advertisements and online

they don’t know what to believe

are bored/frustrated

by constantly being told

they need to upgrade/update

60%

67%

71%


Insight 4

“I rely on my peers to reassure me. Because their experience is my evidence.”

We’ve always known that peers provide recommendations, but today peers also help convert purchasers

Q41: Thinking about the conversations you have online and offline with friends and other people like you about brands, products and

services you purchase, what impact do they have on you? 10- country global totals and in Australia

The impact of online/offline conversations about

brands with friends and other people like me:

Build inspiration

Push consideration

Moment

of

Truth

16%

17%

25%

27%

29%

37%

44%

45%

They give me a sense of community

They get me

They push me to try new things

They suggest products/services

They make me trust the brand more

They help me overcome concerns

They help me make decisions

They warn me about the risks


13%

14%

16%

32%

26%

42%

43%

48%

The channels consumers rely on to be reassured are peer-to-peer, rather than brand-to-consumer

Mobile DiariesWhen millennials want to learn about brand

innovation, their go-to channels are peer-to-

peer: Skype, Whatsapp, Facebook and SMS.

Behavioural Focus GroupsBiometric testing and purchase behaviour

showed that peer-to-peer channels (Twitter,

blog posts, word of mouth) had a greater

impact, by a 6 to 1 margin, on changing

opinions of and purchase intent for new

innovations than advertisements.


Brands win if they power the peer conversation

Percent who agree with each statement:

“Our unique asset is

our host community.”

Nathan Blecharczyk,

founder of AirBnB

“Our next innovation is

introducing a peer to peer

platform so that our private

car owners in Europe can

share their cars.”

Tina Muller, CMO, Opel

Q36. How much do you agree or disagree with the following statements? (Top 2 box)10-

country global totals and in Australia


67%

I trust a brand more if

it encourages me and

and other customers

to review its products

and services

I trust a brand more

if I find it easy to

review its products

and services

64%

64%

59%


Insight 5

Messaging alone

doesn’t work.

It’s about how your

brand behaves.

Two-thirds of consumers are undecided about innovation. What do they need from brands?

Last mover First mover

8% 15%

Percent of respondents who fall into each

consumer innovation typology:


Methodology: Statistical analysis of consumer groupings based on their attitudes to brand innovation showed that 66% of

consumers are open to innovation—but have concerns that need to be addressed before they will buy. They also have specific

expectations for how brands must behave to address those concerns. Other consumers were either “first movers” (15%), “last

movers” (8%), or resistant to innovation (11%).

66%

Undecided Consumers

What undecided consumers need from brands when it comes to innovation

Reassure me about

my personal concerns

Inspire me by doing

something new and different

Show me how I can

participate in your brand

Reassure me about

my societal concerns


Statistical analysis of consumer groupings based on their

attitudes to brand innovation, and their risk concerns.

Source: mobile diaries, qualitative

groups and quantitative segmentation

The 4 brand behaviors that address consumer needs around innovation:

Have a

Purpose

Inform

and Educate

Make

your Mark

Live your

Character

Reassure me about my

personal concerns

Inspire me by

doing something

new and different

Show me how I

can participate

in your brand

Reassure me about my

societal concerns


Brand Behaviors



Inform

and Educate inform transparently so that you can educate consumers and help them make choices


Brand behaviors:

• Explain your motive for innovating.

• Address concerns about the social and environmental

impacts.

• Engage and educate consumers across different

channels and platforms.

Consumer need:

I am empowered by

information. Give me all

the details and let me go

as deep as I want.

To reassure me about my

personal concerns



Have a

Purpose operate with purpose to show how you fit into the bigger picture and are an active participant in society


Consumer need:

I believe in progress—

but not at the cost of

hurting my community or

compromising my values.

Brand behavior:

• Be authentic.

• Show that you value human interaction and have

respect for tradition and heritage.

• Add value beyond your product and service.

To reassure me about my

societal concerns



Make

your Mark make your mark by doing something unique or differentiating that is worthy of attention


Consumer need:

I like to be inspired by new

ideas—as long as they

really are new and different.

Let’s solve a problem in a

cool, creative way!

Brand behaviors:

• Show how you stand out from the crowd.

• Offer engaging content that is timely, has resonance,

and is entertaining.

• Spark peer conversations and debate on many

channels with a clear and consistent brand voice.

To inspire me by doing

something new and different



Live your

Character live with character that is true to your brand and has a personality that consumers can buy into


Consumer need:

Brands can help me

express my identity. I

want to look smart,

creative and connected.

Brand behaviors:

• Be transparent when it comes to consumer privacy

and sharing of data.

• Offer inspirational, exciting brand experiences in

which consumers can participate.

And show me how I can

participate in your brand



Brands and innovation: A new model of marketing in action

Have a

Purpose

Inform

and Educate

Make

your Mark

Live your

Character


Statistical analysis of consumer groupings based on their

attitudes to brand innovation, and their risk concerns.

Brand Behaviors




The Earned Brand

The Earned Brand’s story is not simply told, it is demonstrated and experienced, and to do that, brands can’t operate with a style guide alone.

The Earned Brand has a world view and a belief system; a purpose and reason for being – one that defines not just the communications, but how the brands behave online, off, and in all contexts.

An expressed set of values informs what products are made, what language is used, how customers are treated, and ultimately the legacy the brand leaves in the communities it serves.

Earned Brands empower conversations among peers.


Innovation and the Earned Brand

People believe

in the promise

of innovation.

Consumer

acceptance of

brand innovation

cannot be bought.

It must be earned.

While the promise

of innovation

inspires, people

first need to

be reassured.

“I rely on my

peers to

reassure me.

Because their

experience is

my evidence.”

Messaging alone

doesn’t work.

It’s about how

your brand

behaves.

1 2 3 4 5

Innovation and the

Earned Brand

Thank you.

Appendix:

The Mobile Diaries

The Earned Brand | Edelman 2015 39


Mobile diaries – methodology and platform

Timing

April – May 2015

Mobile Diaries

25 millennials, with them on their mobiles, for 2

weeks, in Brazil, U.K., India, China and the U.S.

Living with millennial

consumers to explore

their attitudes toward

brand innovation

We asked them to

check in with us every

day for 2 weeks,

to answer questions

about brands and where

they get information,

and to complete

assignments such as

“take me shopping.”


• U.K. consumers are very risk-aware—from loss

of human interactions to environmental concerns

• U.K. consumers think of themselves as rational,

not easily ‘duped’ by advertising or marketing

• Factual information (i.e. cost comparison sites)

drive many purchasing decisions

• Shopping and online communication—Chinese

consumers are never far from peer opinion

• With a fast growing apps market, consumers are

looking for services as well as products online

• Risk-aware but optimistic– issues such as food

safety and environmental issues will improve

• Family comes before everything—shaping their

attitudes and ambitions

• There is far less cynicism in India—brands are

seen as aspirational and trusted

• The in-store experience is enjoyed and linked

with status and leisure time

• Online shopping is becoming more popular and

represents a less stressful experience

• U.S. consumers are concerned about negative

impacts of technology, particularly data security

• Everyday brands were more commonly cited

rather than out-of-reach aspirational brands

U.K.

• Personal interactions are highly valued and the

impact technology has on this is a worry

• Brazilian millennials are focused more on

personal benefits than wider societal ones

• There has been a noticeable shift from in-store

shopping to online in the last 5 years

Brazil India

Consumer Culture around the world


ChinaU.S.

Food


Food brands that take an ethical stand

or have additional health benefits align

best with millennial beliefs and goals

around the world.

The food sector is strongly linked to

mobile, with respondents capturing

their on-the-go food habits, from food

truck visits to tasting and sharing

adventurous new dishes when eating

out or cooking.

U.S. U.K. Brazil

Brazil

Mobile


Brands in the mobile sector are seen

as cutting-edge, with the most popular

brands omnipresent.

Mobile phones have an integral role in

millennial lives, capturing their day-to-

day movements and letting them keep

up to date with their peers.

U.K. China

Brazil

Travel


The travel sector is seen as reliable

and efficient.

Brands are able to satisfy millennial

needs for adventure and fun, and their

desire to have plans and be inspired.

U.K. Brazil

Wearables


Brands in the wearable sector are seen

as sophisticated, confident and

inspiring.

These brands give millennials the

opportunity to keep their goals on track

and inspire them to live healthier lives,

whether that means going to the gym

or managing personal health issues

such as diabetes.

BrazilChina U.S.

Auto


The auto sector is largely seen as bold

and aspirational—design and

technology pervades the sector.

Car brands are intrinsically linked to the

person. Millennials believe these

brands are a reflection of how they

want to be perceived.

Brazil BrazilU.K.

Millennial consumers and innovation


People believe

in the promise of

innovation…

“Innovation is a way to change your lifestyle from head

to toe. When you look at anything innovative, it will

inspire you and make you feel more energetic” Zhu,

China

“Innovation means change, progression, activism,

whether that be through small things in life, moments

that only relate to you, or even the greater community”

Dempsey, USA

“[Innovation] has made me

more confident,

independent and smart”

Jatinder, India

“technology can be

revolutionary, however …

we need traditional virtues

to preserve basic values”

Chen X, China

“The principal impact has been to make

communication possible with people who live far

away. At the same time, it has introduced that vice of

always sending messages and forgetting what is

going on around you” Luciano, Brazil

“ [Technology] makes people more independent but

[they ignore] moral values and relationship values”

Amber, India

…but not at the

cost of human

values

Where millennial consumers go for information


Consumers rely

on their peers to

inform and

reassure them…

“I don’t want to be sold

something I don’t like, I want

to take control of the

conversation, it’s about the

questions I want answered”

Dulisha, UK

“I go to sites to read about people with the same

objectives as me who had positive or negative

experiences. But I still don’t trust what I read very

much because companies could be using the service

[e.g. forums] to praise themselves” Victor, Brazil

“Before I make a final decision of an online

purchase, I will look at reviews from previous buyers

and will also have a close look at photos and videos

shared by other buyers” Liu, China

“I usually go to a Chinese website named "Li Ba

Wang", people there are a similar age [to me], we

have similar ideas, it can provide me with some

information when I want to buy something” Chen

Y, China

“I share my views through social media with my

friends and family…that gives me a little

confidence” Abbishek, India

“Sharing the shopping

experience is a must-have

part of the purchasing

process for young

consumers” Zhu,China

…because “their

experience is my

evidence”

Appendix:

The Behavioral Focus Groups



Behavioral focus groups

Timing

April – May 2015

Behavioral Focus Groups

16 millennials in New York and London

.

Using biometric testing

to see how consumers

inform themselves

about new innovations


We created 3 new

“high-risk” innovations,used eye-tracking and

pupil-dilation tests

measured their

engagement with

different channels,

to see which were most

effective in reassuring

consumers about their

concerns.

A payment device

implanted in your palm

A capsule that takes

internal readings to adjust

the dosage

A ride-sharing service that

uses driverless cars

We created three high-risk “innovations”


AutoMed Save Well Smart Ride

A capsule that adjusts the dosage

of your medication based on

internal body readings

A mobile payment device that is

implanted under the skin of your

palm

A ride-sharing service that

uses driver-less cars

Innovation Risk Factors: Privacy Privacy, Security Privacy, Security,

Community Impact

We gave participants different ways of learning about these new brands. Which worked best?


Advertising Social Media Blog Posts

Blogs and Twitter were more informative, by a 4 to 1 margin


Blog

Twitter

Ad

Which of the three types of information you were given

was most useful for you to answer the questions?

Source: Generation K Behavioral Focus Groups

(16 participants)

Participants spent more time with Twitter than with ads

Ad

Time (in seconds) spent reading each content type:

Twitter

Source: Generation K Behavioral Focus Groups

(16 participants)

5

10

15

Ad:

95 words + 1 image

Twitter:

52 words + 3 image


Blogs and Twitter were more effective in changing consumer attitudes from “no way” to “ok, I would try that”


Blog

Ad

Changes of intention with respect to the product based

on reviewing information in each channel:

Blog

Twitter

AdSource: Generation K Behavioral Focus Groups

(16 participants)

The human touch matters: Regardless of channel, those who did switch from “no” to “maybe I’d try that” focused more on their peers


Did not switch Switched

Source: Generation K Behavioral Focus Groups (16 participants)


Did not switch Switched

Source: Generation K Behavioral Focus Groups (16 participants)

The human touch: Regardless of channel, those who did switch from “no” to “maybe I’d try that” focused more on their peers

2015 Earned Brand Australia

Marketing

Transcript of 2015 Earned Brand Australia