Word of mouth about retail and apparel is on the rise as the nation heads into the all-important holiday shopping season – Americans are engaging in 4% more offline WOM conversations about brands in this category over the past 8 weeks versus the same time a year earlier. Further, buzz about children’s products is up 7%, more than any other category measured by Engagement Labs. This compares favorably to an overall decline in brand WOM of -2%. This should bring good cheer to the nation’s retailers, and lends support to the just released National Retail Federation’s forecast that holiday sales will grow between 3.5% and 5.2%. “Given the pandemic, there is uncertainty about consumers’ willingness to spend, but with the economy improving most have the ability to spend,” NRF Chief Economist Jack Kleinhenz said. “Consumers have experienced a difficult year but will likely spend more than anyone would have expected just a few months ago.” But not all categories of retail & apparel are poised for growth, if WOM is an indicator as we have demonstrated it is. The biggest gainers are discount stores, which are garnering 57.4m more word of mouth impressions each week now versus a year ago – an increase of 10%. Athletic brands and stores are up 34.3m (+21%), and home centers and hardware stores are up 17m (+8%). This all reflects a desire to spend smartly despite difficult economic circumstances for many Americans, as well as continued investments in physical fitness at home, and home renovations and enhancements. Department stores, in contrast, are seeing significantly less WOM than a year ago, with 17m fewer word of mouth impressions this year versus last, or a 21.8% decline. More specifically, the 10 brands seeing the greatest year-over-year growth come from a diverse set of brands including some who’s word of mouth has grown 100% year over year. The list includes athletic shoe and clothing giants Nike, whose word of mouth has grown by 15.7m weekly WOM impressions over a year ago, or 19%, and Adidas (+9.9m, or 30%); discount retailers Walmart (+13,8m or 4.6%), Costco (+12.3m or 72%) and Target; HomeGoods (+10.4m or 100%) and Ashley Furniture (+10m or +60%) in the home goods category, Ace Hardware (+8.7m or 49%) and Home Depot (+8.4m or +12%) for the DIY’ers; and Shein, the fast fashion ecommerce platform (+6m from only 500k weekly WOM impressions a year ago). In the children’s category WOM has grown by 7% overall, more than any other category (as noted above). This is consistent with the Black Friday forecast just released by Publicis entitled, “Toys Set the Tone This Cyber Weekend.” Publicis notes, “there are a number of reasons toy deals are rising to the top. Families may want to give them a little something extra in light of smaller holiday gatherings or are preparing for at-home family game nights, especially those in the northern hemisphere as winter approaches and outdoor activities decrease.” The children’s brands showing the biggest gains are seen for Hasbro (+5.9m WOM impressions per week, or +183%), Gap Kids (+4m from only 600k a year ago), likely due to the success of their masks, Lego (+2m or +14%), and Baby Einstein (+2m or +70%).
Consumer Conversations Provide Guidance to the Post-2020 LandscapeFor many marketers, 2020 was the year when engagement in social issues became almost impossible to avoid, with issues related to race relations, a global pandemic, climate change, and the future of democracy taking center stage during a watershed election year. That’s not likely to change just because voting in the 2020 Presidential election is behind us. Record voter turnout and razor-thin margins are reflective of a much more politicized environment for the foreseeable future—offering opportunities for brands that get engaged skillfully, and hazards for those who don’t. One case in point is the Hispanic food brand, Goya, which exploded into the national conversation after CEO Bob Unanue praised President Trump in a White House meeting. Online and offline conversation levels for the brand exploded and turned rather negative, especially on social media, yet the brand appears to have benefited. The private company revealed third-party sales data to the trade publication Food Dive to back-up its claim that sales are soaring, and the company is building a new $80 million plant in response to demand. While progressive leaders and celebrities in the Latinx community launched boycotts of Goya, the brand likely benefited from the fact that the long-time niche brand was introduced to Donald Trump’s voter base just at the moment people are looking for new home cooking solutions and flavors during a pandemic that has reduced restaurant patronage. The Goya experience mirrors—from the opposite side of the political divide—the Nike experience of two years earlier when the brand controversially embraced former NFL player Colin Kaepernick’s crusade against police brutality sparking an explosion of negative talk among conservative voters but driving up brand sales nonetheless. In 2018 Dick’s Sporting Goods invited negative conversation about its brand when it sharply restricted gun sales in its stores following the tragic school shooting in Parkland, FL, but that hasn’t stopped its stock price from doubling since then amid the rising demand for home exercise equipment. Gillette weighed in with ads about toxic masculinity. And this year a multitude of brands joined the conversation about voting, race relations, climate change, and a host of other topical issues. The NBA is an example of a brand that may be suffering from the increasing political activism of its stars. LeBron James has led NBA players in advocating for black lives and in promoting voting. While this could be a factor in the 49% reduction in audiences this year, there are so many other unusual circumstances during the pandemic it is hard to know for sure. But there’s no question the conversation has changed—the NBA is showing up in social media conversations about racial justice, and the net sentiment of conversations has been volatile—particularly in social media. Having said that, racial justice is the #1 issue being discussed by NBA fans, more so than Covid-19 or the election or schools, and in that regard the league’s support of its players and their activism about racial justice fits well with their fan base. This is why it’s important to understand the fit between a brand’s audience and the issues agenda it supports.
How Best To Navigate the Nation’s Issues AgendaFor brand marketers, is it possible to anticipate consumer reaction to forays into politics and issues? While the 2016 political campaign showed the challenge of predicting politics, conversation trends can provide guidance. One powerful approach is to analyze the overlaps in political and brand constituencies. Indeed, many of the same people who engage in political advocacy are also engaging in brand advocacy. It is important to know which issues your brand’s most loyal supporters care about and are advocating about—and which ones turn them off. Take the issue of racial justice. Unsurprisingly, the people talking about racial justice are about 2.5 times more likely than the average person to also talk about the Twitter and TikTok social media platforms which have provided a forum for racial justice discussion. But would you also have anticipated that those same people talking about racial justice are also the most likely to be talking about Scott brand tissues, Arizona beverages, and Chipotle restaurants? People who talk about racial justice—whether on the side of Black Lives Matter protestors or against them—index at a 273 for talk about the Scott brand, meaning they are almost three times as likely as the average consumer to talk about the brand. Consumers who talk about Arizona, Chipotle, Apple, and Metro by T-Mobile also stand out on racial justice, as do those who talk about Chick-fil-A, a brand that has long engaged in political issues from a right-leaning perspective. Another issue that has become increasingly political this year is the public policy response to the COVID-19 pandemic. This issue also correlates to the people talking about specific brands, among them the Walgreens and CVS drugstore brands and United HealthCare, companies that are playing important roles for COVID advice, sterilization products, and an annual flu vaccine. Other brands with a strong association with the COVID-19 conversation are Fox News, Neutrogena, Microsoft, and Hulu. People who talk about the environment stand out as particularly influential for consumer brands. Environment talkers are more than four times as likely as average consumers to talk about the GMC automobile brand, Arm & Hammer, Sephora beauty products, and the Spotify music streaming service. They are also three times as likely as average to talk about the brands Ulta, Angel Soft, Scott tissue, Apple, 24 Hour Fitness, and ESPN. Indeed, people who talk about the environment stand out as the people most engaged with brands in 14 of the 15 consumer categories we measure in TotalSocial, most notably beauty (average index of 184), travel services (177), telecom (171), and technology (170). Only the category of financial services is not the most talked about by people talking as well about the environment—but in that case, the environment is the second most correlated issue, after economy-related issues. The political tumult of the 2020 election has motivated many people to engage in political advocacy, including retired military leaders, celebrities, and normally neutral journalists. But politics are likely to become a larger factor in the consumer marketplace, as well, as we head in 2021. For brands venturing into these turbulent waters, it makes sense to listen to the conversation that’s already happening among their most loyal consumers and use this as a mapping tool to help guide your agenda. SIGN ME UP TotalSocial Briefing
● Biden Holds 20-Point Word of Mouth Sentiment Advantage ● Republicans More Activist than Democrats, Especially on Social Media
Just before James Comey’s late October surprise about Hillary Clinton’s emails in 2016, the two major party nominees were generating very negative conversation about themselves—particularly Donald Trump. This October, the Democrat again has the advantage in word-of-mouth sentiment, but the incumbent Republican President is enjoying higher levels of activism and advocacy from Republicans than Joe Biden is getting from Democrats. In 2016, the 2016 candidates’ “net sentiment” stood at -53 for Trump and -29 for Clinton, based on subtracting negative from positive opinions about the candidates. Immediately after the October 28 James Comey letter, the conversation flipped for the first time in the campaign, with more negative for the Democratic (-46) than the Republican (-42) nominee—and the rest was history, as we described it in our widely reported post-election analysis. This year, the two nominees are again in negative territory, but not as deeply negative as four years ago. Again, the Democrat, now Joe Biden, is again less negative (-7) than Donald Trump (-27). Absent another late surprise, it appears that Biden has a clear edge in the word of mouth sentiment battle, as we’ve seen for the last five months. Indeed, three weeks ago, Joe Biden briefly flipped into positive territory after the first Presidential debate, although he has since slipped back slightly to net-negative. The word of mouth trends for the candidates have been highly polarized in recent months as Republicans’ conversations have been consistently positive toward Trump and negative toward Biden, while the opposite has been true among Democrats. One potentially important shift can be seen among independents who affiliate with neither major party. In September, word of mouth among independents was less negative for Trump than Biden, but now those conversations favor Biden by a 16-point margin. Overall conversation engagement in the elections is slightly lower this year than in 2016, with 33% talking each day about the elections compared to 37% then. One reason may be the reduced social contact people have due to the pandemic, cutting down on the chances to have these conversations outside of the home. And the other might well be a larger number of important things to be discussing including family health, children’s educational needs, and overall economic concerns.
Offline Word of Mouth is Bipartisan, But Social Media Leans RepublicanWord-of-mouth conversations remain the most important way that Americans engage in the Presidential election. For each of the last three weeks ending October 25, an average of 37% have been talking at home about the election, 23% have talked face-to-face outside of the home—despite pandemic-related restrictions—and 23% have talked over the phone about the election. Social media have been a factor, with 18% of Americans posting about the election, followed by 13% who have written private emails and messages, and 9% who have posted their opinions on news websites. While members of both parties engage at similar levels in face-to-face word-of-mouth, Republicans are more engaged with the campaign and in election-related advocacy via social media. Republicans are more likely than Democrats to post opinions on social media, to post comments on news sites, and to display yard signs and bumper stickers. Republicans are also more likely to engage in a variety of “activist” behaviors such as attending campaign events and protests. Democrats stand out in just one area—using a telephone to talk about the election. These patterns may be related to different responses to the pandemic—with Republicans more willing to attend real-world events while Democrats prefer virtual ones. But it also suggests that President Trump has been successful in driving enthusiasm among his key supporters. Political independents lag partisans on almost every measure of engagement, which is typical of infrequent voters who are less committed to either side. Turnout among these low-involved voters will be a priority for the Biden camp in the last days of the campaign. Political conversations help to explain campaign momentum, as people respond the larger national campaign narrative, and they amplify the impact of that narrative among their friends and family. In 2016, conversation trends helped to demonstrate the shift in narrative in response to the Comey letter, even before it showed up in traditional opinion polls. As of now, the narrative appears to be holding steady, with Biden enjoying less negative criticism than Donald Trump. However, the Trump campaign clearly has had success in activating its core supporters, who are more actively promoting their candidate online and in their front yards compared to Democrats. That enthusiasm gap probably would be valuable in a low turn-out election, but this year with half of last year’s total vote cast a week before Election Day, high levels of voter turnout is already a given, advantaging the Biden campaign and its superior word of mouth sentiment.
About Engagement Labs and the StudyEngagement Labs has a unique methodology that captures the word of mouth conversations of Americans – the true kitchen table things people talk about. Our data and method has found some notoriety after the 2016 campaign and was written up in the Clinton and Lanny Davis books as evidence of the impact of the Comey letter. Engagement Labs measures offline conversations using an online survey about political candidates, issues and brands talked about “yesterday.” For this report, analysts focused on the offline conversations of representative national sample of people 18-69 years old. The study involves approximately 32,000 people surveyed per year (600 per week).
How Can They Command Both Offline WOM and Social Media to Grow their Brands?Insurance agents, financial advisors, and bankers all know how important word-of-mouth is to their success in the marketplace. Few consumers or investors are willing to put their financial futures in the hands of an agent or company not recommended by somebody they trust. It is the reason they put so much focus on customer referrals. Yet financial brands perform poorly, as a rule, in our TotalSocial® analytics platform that measures conversation performance. The vast majority are what we call “Whisper Brands,” underperforming on both offline and online conversation. Why does this matter? The clout of consumer conversation is real – and it is an imperative aspect of any marketing strategy today. Brands that achieve strong performance both offline and online are in an enviable position. Their ability to activate both offline and online engagement drives millions of dollars to their topline. One without the other will not drive brand performance as well, and one is not a surrogate for the other. A reasonable number of financial brands, particularly investment brands such as Fidelity Investments, Edward Jones, and Charles Schwab are “Word of Mouth Mavens” performing above average in real-world offline conversations but not in social media. Just four brands including American Family, State Farm, Kaiser Permanente, and US Bank perform above average online but not offline, earning the label “Social Sirens.” But the largest number of financial brands, 23 of 41 in our database, fall into the “Whisper Brand” category because they are below the average US brand both in social media and in real-world, offline conversations. Banks earn among the lowest scores, including BB&T and SunTrust (which merged to become Truist but for now each remain the brand name face to their customers), Citizens Bank, and TD Bank. But they have plenty of company from insurance, investment companies, and payment cards. Why do financial companies, and especially banks, perform so badly in terms of consumer conversations? One reason is that people don’t talk very often about financial companies, leading to low scores for volume. Brands in food, beverages, and entertainment benefit from the fact that they are relevant to everyone and represent daily conversations—what to have for lunch or dinner, or what to watch on television. But investment brands are likely to come up only when quarterly statements arrive or when there is a dramatic change in the stock market. Insurance companies may not come up in conversation until you need them—when you have a claim, or when you are buying a new car or home. Thus, we find the average performance for brands in every type of financial institution is below average for offline conversation volume, and only credit cards perform above the average in social media. Investment companies—which are unlikely to be topics of conversations for people without investable assets—have the lowest performance, both online and offline. Another problem for financial companies is that they are generally unpopular, earning below-average sentiment score due to fairly high levels of negative conversations, particularly insurance companies and banks. Whereas investment companies perform poorly on volume, but they are strong performers on sentiment, especially offline, perhaps due to the fact that the stock market has held up fairly well, even during the pandemic. Credit card companies stand out for having the most positive conversations in social media.
Pathways for Financial Services Brands to Achieve Conversation Commander StatusMerely one financial brand, GEICO, qualifies as a “Conversation Commander” excelling at both online and in real-world offline conversations. Financial services is a real outlier compared to many other categories which have greater representation in this coveted quadrant. Give credit to the generous advertising budget of GEICO, which spent $1.6 billion in 2019, significantly more than the other big spenders in the property & casualty insurance category. The heavy advertising levels for all auto insurance companies like GEICO, Progressive and State Farm reflects the fundamental challenge of trying to be top of mind—and tip of tongue—when the category’s relevance to a consumer is infrequent. GEICO’s paid media strategy helps the brand perform well above average for both offline and online brand sharing – when people talk about GEICO they talk about its media. This is a reflection of the size of their spend, to be sure. But it’s also about the creative, where GEICO is a strong performer with its Gekko but by no means is it alone. Progressive’s recent success was recently featured in the Wall Street Journal for its response to COVID-19 in an article entitled, “Coronavirus Upended Advertising. Here’s How Brands From Progressive Insurance to Budweiser Responded.” A more modest investment in social media content is also a highly effective way to move a brand from being a Whisper Brand to a Social Siren. That’s what State Farm has done, at half the ad spend level of GEICO. Much smaller brands can achieve Social Siren success as well by learning the lessons for driving sharing of social content. What prevents State Farm from being a Conversation Commander is it’s offline sentiment, which trails the category average by a fair degree. Several brands perform very well among offline influencers – people who are sought out for advice and recommendations and whose advice is trusted and acted upon. Financial brands that do particularly well with influentials are Progressive, Citi, GEICO, TD Ameritrade, American Express, Edward Jones, and Regions Bank. In a category like financial services, that’s a key audience to identify, engage with and let them become your advocates. A tactic we’ve seen work well for driving offline conversation is to enlist your most socially-connected customers into a VIP community that can help distribute your news and content, both online and offline. These influentials are a real asset to call upon. Fidelity, TD Ameritrade and American Express are examples of brands we call “WOM Mavens,” strong performers offline but are merely average online. Fidelity, for example, has the highest offline TotalSocial score of any financial services brand. However, its online volume is below the category average as is its performance in sharing of its social content. American Express, as stated above is a strong performer among offline influencers, but its online influence performance is among the lowest in the category. There’s no question that financial brands are at a disadvantage in the word-of-mouth game, but category is not destiny. Consumers are hungry for advice from trusted friends before making big-ticket, long-term financial decisions. That’s why it pays to make a plan that puts your financial brand at the center of the conversation.
27 Point Difference Between Biden and Trump Sentiment About Former VP Stands in Sharp Contrast to Clinton in 2016Published on October 20, 2020 in MediaPost “Biden Word-of-Mouth Sentiment Turns Positive For First Time” Democratic Party presidential nominee Joe Biden is being talked about slightly more positively than negatively for the first time during the campaign, according to the latest 3-week rolling average from Engagement Labs. Joe Biden has a “net sentiment” of +1, meaning slightly more kitchen-table conversations about the candidate are positive rather than negative, a big improvement from three weeks ago when he was at -18. By comparison, conversations about Donald Trump for the three weeks ending October 11 are at -26, similar to three weeks ago (-24). This is the headline finding from the most current weekly tracking of word of mouth from Engagement Labs, using a methodology to measure everyday conversations that in 2016 helped prove the crucial role of the James Comey letter in swinging the election to Donald Trump in the campaign’s final days. Even when in negative territory, the conversation about Joe Biden has been less negative than Trump’s every week of the campaign since Memorial Day when Biden emerged from seclusion due to COVID-19, wearing a mask. At that time, Trump was at -37 and Biden at -38. Word of mouth trends in the 2020 presidential campaign are quite different than four years ago when conversations about both nominees, Donald Trump and Hillary Clinton, were consistently more negative than today. During the second week of October, Clinton was 38 points worse than Joe Biden now, and Trump in 2016 was 29 points worse than now. Over the last three weeks, improvements for Biden have been driven by improvements among groups that were quite negative about him before: white voters (20 point better now), Hispanics (37 points better), and those who have a high school diploma or less education (29 points better). The conversation shifts among Hispanics and those with less education are particularly dramatic, coming in the first two weeks of October and corresponding to a series of major news events, including the first presidential debate, the nomination of Amy Coney Barrett to the Supreme Court, and the president’s COVID diagnosis. The conversation data do not necessarily indicate how specific groups will vote, merely the conversation momentum that may influence future behavior. Three weeks ago, women’s conversations were more negative about Biden (-23) than men’s (-13) despite overwhelming evidence in traditional polls that women favor Joe Biden much more than men do. Since then, men’s and women’s conversations have become more positive toward Biden. Trends in conversation topics for Biden suggest the shift could lead to increased support at the ballot box. The biggest topic of Biden conversations among those with a high school diploma or less is about “wanting to vote for the candidate” (47%) while fewer people are talking about “disliking the candidate (32%). Biden conversations among these voters now more closely resemble those among college graduates. Another change in recent weeks is the rise in conversation frequency about Joe Biden. With the benefit of incumbency, Trump’s ability to drive news has 58% talking about him each day compared to 43% for Joe Biden, but the gap between the two has been much smaller since the two nominating conventions. Conversation dynamics can be a leading indicator of both consumer and voter behavior because conversations tend to precede action whether at the cash register or the ballot box. Consumer research has shown that conversations are responsible for approximately 19% of consumer purchases. In 2016, a dramatic shift in the voter conversation helped signal that Clinton’s candidacy was in trouble following the release of the James Comey letter about Clinton’s emails 10 days before the election.
About Engagement Labs and the StudyEngagement Labs has a unique methodology that captures the word of mouth conversations of Americans – the true kitchen table things people talk about. Our data and method has found some notoriety after the 2016 campaign and was written up in the Clinton and Lanny Davis books as evidence of the impact of the Comey letter. Engagement Labs measures offline conversations using an online survey about political candidates, issues and brands talked about “yesterday”. For this report, analysts focused on the offline conversations of representative national sample of people 18-69 years old. The study involves approximately 32,000 people surveyed per year (600 per week). SIGN ME UP TotalSocial Briefing
The following is a transcript of Ed Keller’s thoughtful acceptance speech at his induction into the Marketing Research Council’s Hall of Fame. In 2014, Keller was also elected to the Word of Mouth Marketing Hall of Fame by the Word of Mouth Marketing Association (WOMMA). Chartered in 1927, the Market Research Council is the oldest and one of the most prestigious market research organizations in the world. The MRC Hall of Fame annually recognizes outstanding marketing research professionals since 1977 celebrating leaders such as Arthur Nielsen, David Ogilvy and Burns Roper.