5 things you need to know this week - Week 11
Published: 24 April 2015 By Alison Millington
From brands looking to tap into the launch of the Apple Watch to Spotify’s plans for global domination, Marketing Week rounds up everything you need to know from the marketing industry over the last seven days.
1. Ministry of Sound is bringing in senior marketers as it looks to ‘redefine clubbing’
Global music and entertainment company Ministry of Sound has appointed Matthew Kershaw and Alexis James to the newly created roles of group marketing director and commercial director as it looks to promote awareness of its premium music portfolio and ‘redefine clubbing for the next 25 years’.
As group marketing director, Kershaw, who has previously held senior positions at MTV and BBH, will look to develop the company’s portfolio of brands, which includes its popular London club venue, an independent record label, compilation albums, international events, a radio station as well as a wide digital presence.
Meanwhile, James, previously commercial director of Blinkx who has held positions at UKTV, ITV and Centaur, will look to create partnerships with brands.
The move is part of the company’s goal to “take it to the next level” as it approaches its 25th anniversary as a brand next year.
Kershaw told Marketing Week: “There’s this incredible collection of businesses under the recognised banner of Ministry of Sound, but people aren’t aware of how much we’ve got and how much we do. My role, and Alexis’ role, is to start to communicate that.”
The company is looking to relocate its London club in 2018, set to hold 3,000 clubbers in a bigger space. It is also launching a new range of speakers and headphones, according to Kershaw, who believes these new launches open up opportunities for technology, drinks and experiential brand partnerships.
2. Spotify is readying an improved targeted advertising feature for brands
With digital music revenues responsible for nearly half (46%) of music sales globally in 2014, equalling physical CD sales for the first time according to the latest research by record industry body the IFPI, Spotify is readying an improved targeted advertising feature for brands at a time when streaming is fast becoming a daily thing for consumers across the planet.
Spotify’s new playlist targeting service, which will launch on 1 May, will allow brands access to customer segments based on their musical preferences, age, geography, genre and language.
The service now has 41 million paying streaming consumers, a 46% increase year-on-year worth $1.6 billion in revenue, or about 26% of the overall digital market. Although its latest advertising feature won’t impact paid subscribers, who get an ad-free service, it will transform the way its free model operates.
“People spend, on average, two hours or more listening to Spotify a day, so that’s a great window for us to help brands talk to consumers at the right times,” says Spotify’s VP of sales for EMEA Jonathan Forster.
“We are a long time away from utopian future where every ad is relevant to every user, but we do definitely think we are giving the smart brands the opportunities to aim towards that sort of personalised future.”
3. Brands are rushing to release apps for the Apple Watch despite caution amongst marketers
Despite the fact that the launch of today’s Apple Watch is expected to generate three million individual sales globally – equating to around $2 billion – featuring apps from brands such as the Post Office and British Airways, only 8% of marketers are executing plans for an app on the device due to confusion over how consumers will use it.
New research from digital marketing agency Greenlight, claims that one in three marketers (32%) are actively considering building an app for the smartwatch in 2015.
However, Andreas Pouros, COO and co-founder of Greenlight, says the Apple Watch is still a risk.
“The Apple Watch may be shiny and new, but it’s also completely unproven,” he says. “There’s no telling how consumers will use it or if it will even take off. Building apps for it may pay off, but it’s a massive gamble; and one that most marketers aren’t willing to take.”
However, despite the apparent caution among marketers, several high profile brands, such as The Post Office, British Airways and Avios have already created apps to tie in with the launch.
4. The rise of mobile and digital has helped UK advertising hit its highest growth in four years
UK ad spend hit its highest rate since 2010 last year as it increased by 5.8% to £18.6bn, according to the annual expenditure released this week by the Advertising Association and Warc.
The rise has been attributed to the growth of digital – last year’s growth was driven by internet advertising and mobile, with both up by respective rates of +15% and +59%.
“It’s time to stop thinking of digital as something that lives on the internet, with cinemas, outdoor, news and television all seizing the opportunity,” said Tim Lefroy, chief executive at the Advertising Association.
The expenditure report also predicted the creation of 70,000 advertising-related jobs over the next five years, meaning 434,000 people will work in the ad sector by 2019.
The positive increase in UK ad spend follows the latest Bellwether report which showed that marketing budgets grew by 11.8% in the first three months of 2015, up from 6.1% in the final quarter of 2014 and the tenth successive quarter of growth.
The largest growth in the quarter was seen in Internet, particularly search and SEO. Internet spend was up by 8.4%, marking its 23rd successive quarter of growth.
5. P&G is cutting its agency roster with plans to reinvest savings into marketing activity
Procter & Gamble announced this week that it will cull the number of agencies it works with worldwide as it looks to cut its marketing costs by up to $500m.
On a call with analysts to discuss the company’s first quarter results, chief financial officer John Moeller said the fees and production costs paid to advertising, media and PR agencies offer “significant” cost cutting opportunities.
“We plan to significantly simplify and reduce the number of agency relationships and the cost associated with the current complexity and inefficiency, while upgrading the agency capability to improve creative quality and communication effectiveness,” he said.
The money saved from agency consolidation, estimated to be $500m, will be reinvested to “improve positions and support new innovations” with brand extensions such as Always Discreet, Fusion FlexBall and Venus Swirl mentioned.