Cake 2010 Trends by Cake Group

ere verywh ideas e

Money Retail Trends Media Lifestyle Home Entertainment Technology Social Media Summer 2010 Culture Overseas

Things g y you should know about the next twelve months

Ten for twenty ten

In 2009, the Noughties ended with a bang: The election of a black US president, the death of Michael Jackson, the reduction of all communication to 140 characters via Twitter, and the return of mass unemployment. We also had the warbling of Susan Boyle, the anticlimaxes of an epidemic we called Swine Flu and climate change talks at Copenhagen, an endless stream of expenses scandals and the cinematic swansong of the decade - 2009’s highest grossing movie around the world… Transformers 2. So what does 2010 hold? Over the next few pages you’ll find ten trends for 2010; Cake’s collective thoughts on key trends we expect will have a genuine impact on how your consumers will be interacting in the months to come. While we don’t claim to be prophets, we do hope you’ll find this interesting and informative for both you and your business over the next twelve months. Take it as a brief moment of inspiration in the dark, wintry months of a new year. Last year was tough for everyone so we’re really looking forward to 2010 being a year of change, filled with renewed positivity, grit and determination and yet another new world order when it comes to the everchanging media landscape. Enjoy a happy new year.

Contents Money

Retail Trends

Media

Lifestyle

Home Entertainment

Technology

Social Media

Summer 2010

Culture

Overseas

About Cake

Money Cake isn’t made up of global economists. Instead we tend to look at the simple measures. Talking to Visa - the credit card business - earlier in December, I got a pretty clear snapshot on where consumer confidence stands. This is a company that can flick a switch and see how people are using their credit cards across the world in an instant and the signs are positive. This will be a recovery with a difference. As a 36 year old, this is my first “working” recession. (I watched the last one on TV as a student, back in 1991-92). The difference this time, is that this a recession that in many ways we – the people – have brought on ourselves. No oil shocks, no bungled Eurocratic exchange rate mechanisms, war has not plunged us into this mess. We – consumers and financial institutions – got a little too greedy. The results have been ugly, and we are all learning a simple lesson. Don’t spend what you can’t see. ‘Boom and bust’ is over, just not in the manner Gordon Brown had in mind. 2010 will see ‘bust’ give way to a return to old-fashioned economic values. Work hard, spend, but spend well.

Commentary by Jim Dowling Managing Partner

4 | www.cakegroup.com

t is widely accepted that what goes up must come down; be it tidal flux or the precarious balance of celebrity (watch out Cheryl Cole...) most things in life are subject to peaks and troughs.

Such highs and lows were never more evident than in 2009 when the steady collapse of the global financial markets at the end of 2008 bathed the global economy in the bleak light of recession as the new year dawned. Europe’s economy contracted for the first time since World War II and even the city built on sand, Dubai, started to crumble under the pressure.

Bank loans are scheduled to rise by 5.9% globally in 2010 Here in Britain things looked pretty bleak; High Street stalwarts folded, redundancies hit 2.5 million, public funding of banks reached £850 billion and in the third quarter, despite assurances of ‘green shoots of recovery’, our economy shock-shrank by 0.4%. So far, so grim. As we turn our back in despair on 2009 there’s one clear question: How will the global economy look in 2010? Consumer spending habits altered noticeably in 2009 shifting away from disposable purchases and towards more controlled spending. This was witnessed in the leisure sector as the penny-pinching public downscaled on gym memberships and holidays abroad and elsewhere as we scaled back unnecessary or ‘luxury’ buys (11 million of us now use restaurant deals when we eat out). To put this in perspective, one in two of us now spend more on promotions than in previous years.

Our desire for the latest ‘must-have’ gadget seems unlikely to diminish. Research conducted by Mintel shows that 40% of us would rather stay in than go out with our friends if it helps us to afford top of the range technology, suggesting that we now view electronic devices (from smart phones to sexier white goods) as not just important, but essential in our lives. Whatever the outcome of Copenhagen was, (are we really sure?) sustainable, ethically sourced and environmentally friendly consumerism is definitely growing. This trend has been building over the last year, playing into the protectionist mentality of a nation in financial crisis. In 2010 it will become more closely associated with corporate social responsibility - brands that show their intent to succeed by doing work that benefits others are more likely to ensure consumer loyalty.

China’s economy is expected to grow by 8.8% in 2010, India’s is expected to grow 6.5% After the battering of 2009, we have weathered the storm and are ready to take baby-steps to recovery. But these steps must be slow and steady to ensure a solid foundation for growth, of which innovation and a longterm outlook from brands, banks and governments alike will be an essential component.

Global growth in 2010 is predicted to be 2-3% As the economy (hopefully) steadies and stabilises in 2010, consumer habits will hold fast; the trend for ‘own label’ is here to stay in many categories and the boom in supermarket growth is likely to continue as we choose to spend more time entertaining at home. Overt consumption will take a backseat and we’re likely to opt for quality and durability when it comes to buying clothes, accessories and household goods rather than splurging on a quick fix.

www.cakegroup.com | 5

Retail Tren T

here was a time when shopping was described as a national pastime but this was rudely declared passé by the Bank of England in early 2009 as Britain’s high streets emptied. Fortunately we’ve started to pick ourselves up and, despite a total drop of 3.7% in consumer spending since the start of the recession and some not insignificant casualties, our high streets have proved surprisingly resilient. Still, there’s no denying that the way we purchase items has changed in the last 24 months. Echoing the early 90s Grunge phase, blatant consumption characterised by the ‘bling’ of the early Noughties has vanished and in its place is more thoughtful consumption. Fuelled by buzzwords like ‘sustainability’ and ‘ethical consumption’ consumers are starting to wave farewell to disposable purchases and hello to quality pieces that are ethically produced.

12 million people in the UK use the internet for investment advice, while 23 million use price comparison sites. Last year’s economic situation stalled the growth of sustainable retail but with the economy now walking rather than limping, this trend is primed for a comeback. That’s not to say that bargain stores will disappear; there is still a global appetite for cheap produce (Wal Mart has just opened it’s first shop in India) but a more ethical approach to consumption is starting to burgeon. 2010 is also likely to be the year of unconscious giving. For brands to successfully cultivate consumer trust and show they care for their customers, they need to adopt more long-term strategies and pay some serious attention to CSR. Combining creativity with community need can be a winning force for good – for example the recently relaunched (RED) campaign or Ikea’s initiative in which every solar powered ‘SUNNAN’ lamp purchased is matched with another and donated to the developing world. Arguably, making ethical purchases is a luxury dictated by income, but as we move into 2010 consumers have a greater ability than ever to learn about the products they are buying, whatever they plan to spend. The spread of super-fast broadband and portable internet connections

6 | www.cakegroup.com

puts a whole new spin on the way consumers interact with the internet. It provides a platform to comment, share and review in real-time. This continual dialogue between brands and consumers means that brands are well placed to figure out exactly what consumers want and how they want it while consumers are savvy about what brands are doing.

Expect to see a rise in vending machines 21st century style. Already on the market are ‘Afterheels’ (rolled up shoes for when your heels get too much, vended in nightclubs) and the ‘Wonder Pizza Vending Machine’ (vends hot, freshly cooked pizzas). There are definite advantages to this new transparency. Whilst ‘Crowd Sourcing’ is not a new concept it is one that has gained considerable traction in 2009. A world of constant connectivity means brands are uniquely positioned to garner consumer insights into marketing campaigns, new products, brand extensions or flavours. Some brands are taking this even further, using crowd sourcing to make key decisions within their businesses: Hot London restaurant L’Anima recently selected parts of their wine list based on crowd sourced responses. Meanwhile over at Royal Opera House the ‘People’s Opera’ was staged, an opera written almost entirely by Twitter users.

Expect to see a continuation of designer/high street hook-ups. As high street brands look to add value.

nds Two words spring to mind when I gaze into the crystal ball of retail - cautious optimism. While we’re by no means out of the woods, the impact of the ‘R’ word has been less severe than we might have thought this time last year: ‘staying in’ has had its benefits for the bottom lines of grocery retailers, entertainment and lifestyle brands across the board. Generally consumers are now under much less pressure to trade down and our Big Four were predicted to have a pretty good Christmas (trading statements as yet unreleased at the time of printing). Outside of grocery, stores on our streets and online, dragged customers in with the carrots of discounts and pre-VAT increase and buy-now-pay-later bargains. Certainly Selfridges was packed and the Ugg store had customers queuing around Westfield to buy the furry boots, but according to the London Retail Consortium, like-for-like sales in central London were up 13.3% in November, but for the entire country they were ahead by just 1.8%. A nod of thanks to our European friends and the weak pound. We will watch with interest as to how retailers will entice consumers to dig deeper into their pockets and no doubt, an ethical silver lining and clear evidence of values will become more and more relevant as illustrated here. For long term credibility retailers need to invest here. But as the majority of punters remain cautiously optimistic the price tag in 2010 will be the overwhelming short-term priority for all.

Commentary by Davnet Doran Client Services Director

www.cakegroup.com | 7

Media The media landscape in 2009 changed dramatically, with traditional media and social media merging, and an increasing number of stories breaking on consumer driven channels – most notably Twitter. This kind of social journalism is here to stay and it’s a great thing for the clarity and openness of communication. The industry impact for traditional journalists is revolutionary and we, as communications specialists, need to respond to the new world order. Traditional journalists need to adapt their news gathering skill sets (if they haven’t already) to ensure they have their fingers on the pulse of every new trend, debate and story coming through from the social media portals. In turn this will greatly affect how the public relations industry chooses to communicate with journalists. The tradition of producing long press releases and ‘selling in’ to news desks may be over. Instead stories are increasingly condensed to 140 characters and targeted straight at the consumer. We’ll then manage the ground swell of consumer interest, to eventually feed up to the more traditional media publications – a true role reversal. As the lifetime of a story decreases, newspapers may start to compact their content into mini editions that run through the week, saving the supplements, features and special sections to bigger editions on the weekends. This new format during the week could tap into a generation of consumers who don’t currently consume newspapers, while the bumper weekend editions will still appeal to the demographic for whom reading the weekend paper is as traditional as enjoying a Sunday roast. Journalists can often be distrustful of PR’s, but a good story has credibility with consumers and readers first and foremost so it’s in everybody’s interest to make content creative and credible. Over the next twelve months the role for brands and their agencies is to hone the methods of communication and find the right balance between editorial endorsement from trusted media channels, and the direct, honest communication audiences and consumers really want.

Commentary by Jodie Butt UK Media Strategist

8 | www.cakegroup.com

n this new digital era, media and technology go hand-in-hand. Messengers on horseback, letters, telegrams, emails and tweets – communicating and sharing news gets easier and easier with constant access to multiple platforms at the touch of a button on our smartphones. Via constant connectivity not only can we break news through our social networks (think the Hudson Bay plane crash in January 2009, broken via Twitpic) but we can also be brought up-to-date on the latest global and local news regardless of where we are in the world. While this is great news for us, its less welcomed by more traditional media channels. The rise of online news sites filled with quality journalism and rich media has coincided with the decline of newspaper sales as more people choose to catch up online or on the move. One media mogul who is clearly fed up with the decline in both sales and profits of his media properties is Rupert Murdoch, who outlined his intention to introduce a charging model for all of News Corporations’ online news sites. What effect this will have on the rest of the publishing industry remains to be seen but it is quite probable that if it is successful then the rest of the news industry may well follow suit.

Online advertising now accounts for 23.5% of advertising spend in the UK. A whopping £1.75bn was spent in the first six months of 2009, overtaking TV advertising spend. Also likely to impact on traditional publishing houses is the arrival of the e-reader. These natty devices have been around for some time but 2010 is the year ‘e-reading’ goes mainstream. Like digital music players, as prices fall and the technology improves, people will be more inclined to give them a try. For media houses the e-reader may offer a life belt already people are prepared to pay to receive newspapers and magazines on the Kindle and there may be scope within this market to retain subscriptions. US publishing

houses are already catching onto this with Hearst, Time, Condé Nast, Meredith and (allegedly) News Corp in the process of developing a new digital newsstand for the e-reader market that will act as an iTunes-style shopping forum for content.

Amazon’s e-book sales overtook print sales for the first time ever over the Christmas period of 2009. In TV, things are also altering to accommodate increasing online consumption (every UK terrestrial channel now has an ‘on-demand’ offering online). The huge success of the BBC iPlayer saw it garnering 1 million viewers in its first year of activity. Since it’s launch, iPlayer has now expanded across multiple platforms licensing an application for the iPhone and streaming via Virgin Media. Expect other channels to work up their online and multi-platform presence in 2010.

MPG predict that ad spend will make a slight recovery of 0.5% in 2010 with the largest growth area projected at a 6.5% rise for online spending. In 2010, the proposed relaxation of OfCom’s regulations on product placement within television shows would be timely for many broadcasters struggling with decreased ad spend which in 2009 saw online overtake TV for the first time (Some experts are predicting product placement could rake in revenue of up to £125 million). Discussion around this potential legislation has been divided, with some parties claiming it will compromise editorial content and others stating that it will add value. One thing is certain, should this world be deregulated, it will present some golden opportunities for brands across the board.

www.cakegroup.com | 9

Lifestyle Economic slowdown is a bit like a constant winter. As well as an impending sense of gloom and SAD, just as when the nights draw in, it somehow encourages a new found creativity and a return to old values and pastimes. While I’ve been beavering away part-time on an MBA in the last 18 months, friends and colleagues have also found time to get involved in a range of hobbies and life improving enterprises. A friend of mine decided to ‘be more international’, in that way we all get inspired in the first few weeks of January, and over the last 12 months has sat up in bed three nights out of seven repeating Spanish phrases over and over out loud to the Rosetta Stone language kit. Another friend with a pretty corporate job decided to liven things up with a DJ course to unleash his inner Fat Boy, while many of Cake’s single ladies took up dance classes to re-live their Flash Dancing youth. Another new year, still only a few shoots of recovery and everyone’s still on the hobby band-wagon which looks set to roll even faster in 2010. It’s the year of the Tiger in the Chinese calendar and with a Tiger’s fiercely competitive streak, all this self improvement could be put to the test. Three new TV shows hit the screens showcasing the nation’s dancing skills, it’s a World Cup year and Andrew Lloyd Webber’s back searching for a Dorothy. I’m very into building one’s personal skill base but with all this going on, I may have to cross my chums off my Christmas card list if they start dribbling a ball down the yellow brick road and Dirty Dancing in their lunch hours.

Commentary by Greg James Head of Branded Content

10 | www.cakegroup.com

ne of the few good things about recessions (surprisingly there are some) is the determined, stiff upper lip mentality that is almost universally adopted when things start to go down the pan.

Many of us in 2009 had to consider what we were prepared to do without. When faced with impending unemployment and/or a shrinking bank balance, we’re more than happy to cut out the luxurious habits cultivated in happier times and, as this re-evaluation of what we want and what we need kicks in, we start to find methods other than consumption to define and set ourselves apart from the crowd. In 2009, as budgets got smaller, so did our lifestyle expenditure; holidays became ‘staycations’ and we started socialising at home. Although it’s unlikely that come spring we’ll be donning our glad rags and ditching the two-man tent, it’s probable that the shift in attitude towards consumption (and thus status) will settle down, forming what is widely being referred to as a ‘postconsumerist’ society.

Disney will be giving away up to 1 million free passes to visitors who have done a full days volunteering in their communities via the ‘Give a day, get a Disney day’ initiative

So where do skills come in? The shift away from differentiating ourselves through consumption made room for other ways to stand out from the crowd. Be it creative writing or learning how to cook fusion food, 2009 marked the start of a trend for niche skills. Sustainable skill sets also caught on, with a resurgence of traditionally ‘unsexy’ pastimes: sewing and knitting went mainstream with events like ‘Craft Guerilla’ (complete with hip DJ’s and cocktails), allotments currently have a waiting list of 100,000, and even the Women’s Institute got a makeover in the form of the Shoreditch Sisters.

15.8 million people in the UK are pro ‘Grow your own’. That’s not to say that we’ve stopped enjoying traditional channels of entertainment; we still watch television with gusto (albeit frequently through on-demand services), listen to music (often via Spotify) and go to live events. But in 2010, we’ll be able to consume what we want, when we want it, commenting as we go.

Cinema attendance grew by 16% in the UK in 2009. This means that consumers can have a prominent say in what’s going on. From pop-up stores in unique locations to festivals, gigs or flash-mobs, the combined power of a live event and real time commentary offers scope for brand amplification. Being there and experiencing the moment is great but its even better when you can tell everyone about it while it’s happening.

So if buying stuff isn’t the way to affirm status and lifestyles any more, then what is? Step forward skills and information. The arrival of constant connectivity means we have answers to almost any question at our fingertips; in 2010 knowledge truly will be power. For brands this presents a conundrum: yes, we’re connected to our social media and information sources constantly, but the overload of information being shared means that consumers will filter what they digest. How can brands hold our attention? Simply by giving us that little bit more. In such an information-filled world, a little bit of spontaneity, creativity and effort go a long way.

www.cakegroup.com | 11

Home Ente I

n 2009, staying in got a lot more glamorous.

Gone were lonely nights spent on the sofa, or evenings taking care of laundry and in their place came a whole host of glammed-up opportunities to entertain ourselves at home. From meal deals like Sainsbury’s’ ‘Feed your family for a fiver’ and M&S’s three-course meal for a tenner, to X-Factor parties and Singstar championships with friends - entertainment was firmly rooted in the home. Television viewing increased by 3%, take-out sales rocketed, as did subscriptions to LoveFilm, as the UK got re-acquainted with living in the living room.

Sainsbury’s reported a 50% year-on-year rise in it’s champagne sales over Christmas 2009. When it comes to going out, last year’s restraint looks set to continue. Although big name restaurants and bars kept abreast of the economic downturn, beer sales in the UK plummeted by 8% in 2009. In contrast supermarkets, with their decreasing prices and more varied stock, blossomed; there are now more supermarkets than pubs in the UK. All this goes to suggest that staying home and cooking up a storm with friends (30% of us regularly entertain at home) is a far preferable alternative to popping down the boozer for a few pints.

18 million people tuned in to watch the 2009 final of X Factor In June, South Africa will host the World Cup, undoubtedly the biggest sporting event of the year, pulling in 300 million viewers from around the world. This is a prime time to buy a brand new, acronym-happy-cutting-edge LED HD TV so you can kick back with your mates, have a beer and watch England make it all the way to penalties in the quarter finals. It will also be the first time a World Cup has been shot and screened in 3D thanks to a collaboration by Sony and Fifa. This follows hot on the heels of Panasonic’s announcement that they will capture the Winter Olympics in 3D.

12 | www.cakegroup.com

These announcements show a clear commitment to a much talked about technology and the three dimensional fun doesn’t stop there; 2010 sees the launch of Sky’s first ever 3D channel, Sony has confirmed 3D updates for the PS3 which will be fully compatible with their range of forthcoming 3D TV’s and prepare for a rush of mainstream movies at the Box Office as more cinemas convert to 3D technology. Those consuming at home will be able to watch 3D releases on blu-ray (although at present the funny glasses are still mandatory). Expect auto-stereoscopic TVs to become mainstream over the next five years.

Domino’s Pizza sales rocketed by 11% this year. If 3D doesn’t appeal, there will be plenty more to keep you occupied in 2010. Along with the usual spate of American TV imports (watch out for Glee and The Forgotten in particular), November 2010 will see Microsoft launch the first ever controller-free console and the launch of Sony’s entertainment content distribution service that allows users of Sony hardware to access movies, music, books and other content, giving consumer’s yet more in-home entertainment.

ertainment So in 2010 it’s a new decade and new technology, right? Well how come everyone from journalists to bloggers and gadget-heads seem to be talking about a piece of technology that’s been around for decades - 3D? The first ‘golden age’ of 3D in the 1950’s was a boon for Hollywood as audiences across America and Europe rushed to their local cinema to try on those ‘oh so naff’ cardboard glasses. There followed a seemingly endless stream of films where the director was more excited about the technology and ‘making big stuff leap out of the screen’ than the dull necessities of script and casting. Audiences soon drifted away as the novelty wore off and the often-reported headaches caused by watching early 3D films increased. Since then, 3D has made the occasional resurgence through the ‘60s and again in the ‘80s, without ever truly becoming mainstream. In 2010 that finally looks likely to change. As always with technology, it’s down to a combination of the right content, with the right technology, at the right time. Directors are now looking beyond the obvious 3D techniques of actors throwing objects at the screen to create films that are enhanced by, but not reliant on, 3D. High profile releases such as James Cameron’s Avatar are already demonstrating that 3D can truly enhance the viewing experience. Sky has already announced 3D will become a big focus for them in 2010. With almost 10million households in the UK currently subscribing to the satellite broadcaster, 3D now has a backer with the muscle to take it out of the cinema and into the mainstream.

Commentary by Jason Lees Account Director, Sky

www.cakegroup.com | 13

Technolog 2009 will be remembered as the year that technology assisted consumers in finally getting the upper-hand in the way they were marketed too. Indeed Twitter left 2009 with a bang, forcing the manufactured X Factor winner from the top of the Christmas Charts in favour of ‘real music’ with a relatively simple campaign of mass consumer participation. We’ll see a lot more from Social Media harnessing technology in 2010 and brands really getting hold of how to use it effectively. So, in terms of pure technology what’s a technophile like me looking forward to? Top of my list is going to be the much-rumoured Apple Tablet. Oh the joy of not having to lug around a laptop crammed with thousands of files, bring on the world of TCT (Thin Client Technology) and cloud computing. I’m imagining an ultra-thin slab of Aluminium, that’s about A4 in size, has a Solid State Drive and is super-fast. My other certs for 2010 are: Geo-tagging will finally be harnessed for marketers, as consumers take advantage of the many benefits of personalised DM from Augmented Reality to ghost messaging. 2010 will also be the year of Android – the Google invented platform will become the OS of choice for handset, camera, MP3 and Navigation brands as technology integration and consolidation become the buzz words.

Commentary by Mike Mathieson CEO

14 | www.cakegroup.com

gy B

ack in the late 80’s, when the good old desktop monitor with green ‘futuristic’ type had just become mainstream, the computer was heralded as a revolutionary business tool, a piece of kit that was going to change the world.

Fast-forward 20 years and life without the web is barely conceivable (so much so that the Government recently announced an initiative to teach all five year olds how to use the internet). In 2010, technology is about being connected, be it through conversation, interaction, sharing or commentary. And the driving force behind constant connectivity? The smart phone. If 2009 was the year of the iPhone then 2010 is the year the rest of the handset market catches up. The iPhone, Apple’s brainchild, hit the mass market in 2007 and has subsequently sold over 30 million units worldwide. And that’s just the beginning; after a shaky start, Google’s Android platform is hot on its heels and has buy-in from most major handset manufacturers, all keen for a slice of this emerging market. Set against this fractious backdrop, smart phones look set to be the fastest growing category of handsets in 2010, with The Economist citing projected growth in this market at a staggering 28% in 2010.

India and China are expected to see the fastest growth in the smartphone market And what has this got to do with brands? Well, it’s pretty simple really. With constant online connectivity, clever applications and snappy functionality, users will be in the unique position to comment in real time on absolutely anything they want. Whether it’s tweeting about a gig from your phone, reviewing a movie while you watch it or adding to a rich-media wave on Google Wave, real-time commentary is big news.

platform that enables real time commentary and richmedia discussion, and collaborative content truly comes into it’s own.

M-commerce is expected to grow by 28% in 2010, to more than $20 billion The rise of smart phones and increasing broadband penetration will enable brands to show their creativity and engage their consumers on a completely different and more useful level, adding value to their lives, not just with information but with rich content that connects and engages with consumers. Also on the cards in 2010 is Augmented Reality; be it a cunning app from Stella Artois that locates local bars when you hold your phone up to show the street you’re on, or a symbol on the back of a packet of crisps that unlocks exclusive content for you online when you sync it with your smartphone camera, Augmented Reality is set for the mainstream, and smart brands will be all over it.

Nokia will be launching Nokia Money in 2010, a mobile financial innovation that allows users to pay bills and transfer money. Also expect to see a rise in tracking. Be it tracking your friends or the price of a new pair of shoes, monitoring your own fitness or receiving email alerts when you’re favourite shop gets new stock, digital tracking and alerts will give consumers the knowledge to consume more efficiently. This isn’t being forced upon consumers, it’s being requested by them and offers brands a unique opportunity to give their customers exactly what they want.

With all this commentary comes a surplus of content to sift and search through. The online community has been aware of this for a while (a spate of social media search engines appeared in the second half of 2009) and now the key players are starting to take note. Throw into the mix the recently launched Google Wave, a collaborative

www.cakegroup.com | 15

Social Med F

acebook, Twitter, Habbo, Bebo, Flickr, friendsreunited, MySpace, Last.fm, LinkedIn, My Single Friend, FriendFeed, Foursquare, the list for innovative online networks goes on, begging the question, ‘what on earth did we do before social media?’

Facebook landed on British shores in 2005 and went public in 2006. It garners 49% of all internet site visits in the UK and has approximately 23 million users around the country. Yes, that’s right; 40% of the population have Facebook profiles all bursting with valuable market research material made public voluntarily.

Twitter grew by 2,680% in 2009 What is more surprising is that this brand/consumer dialogue online has become a two way street; 10 million people a day become fans of branded pages (The top ranking fan pages belong to Coca Cola, Starbucks and Skittles respectively) and Facebook claims that the average user becomes a fan of two pages a month. If Facebook is the poster child of the social media revolution, then in 2009 Twitter became its cooler, younger brother. Exploding into mainstream consciousness when Stephen Fry tweeted about being stuck in a lift, Twitter became a key part of the media landscape, offering brands a succinct and immediate platform for communication. However, this has proved to be a double edged sword: while it’s easy to shout about how great your brand is on Twitter, it’s equally easy for consumers to let you (and everyone else) know their bad experiences with your brand. If brands want to maximise their presence in social media and maintain a positive reputation, they need to embrace a transparent approach, offering realtime customer service. Two great examples of brands on Twitter are Motorola (their consistently updated and engaging feed genuinely adds value), and Dell (who appear to fully understand the capacities of social media, claiming to have generated $6.5 million in revenue via twitter in 2009). The rise of smart phones means that we’re constantly connected to our social networks. This information overload may also feel a backlash as some users tune out the constant noise of networks, hiding certain feeds and ignoring others. Brands will have to employ more creativity, intelligence and clout to ensure they cut through this online noise.

16 | www.cakegroup.com

Whatever the negatives, social networks remain a great place to engage existing and potential customers. By reaching out to people in places they already frequent online, brands eliminate the consumer journey to their sites. The next inevitable step is to bring products to them in these places. In 2010 expect to see an increase in social media shopfronts; in August 2009, Facebook announced the intention to launch 20 virtual shop fronts allowing users to shop without ever leaving the confines of Facebook.

Following hot on the iphone’s heels, Palm, Microsoft, Nokia, Blackberry and Google Android have all launched app stores in the last year. So what about harnessing all this commentary echoing around the internet? The brilliant thing about real-time commentary is that consumers are opening a direct dialogue with brands, telling them where and how their products let them down. Brands can react in three ways: ignore any criticism and try to control the online commentary (not advised), over-perform on every product release (unrealistic) or accept that although you can never please everyone you can incorporate consumer feedback into forthcoming products, working collaboratively to produce exactly what your consumers want.

The 2009 mobile advertising and marketing world is projected to be worth up to £50 million despite last year’s recession.

dia What is a friend? Open up your Facebook page, your Twitter account, your LinkedIn profile. Who are all these people that claim to know you and that you are proud to display as part of your network? And why are you friend-ing brands? And since when was friend-ing a verb? Well, you know the answers to these questions - because of social media. Thanks to social media, we’re connected all the time. We’re in charge of what we see, when we see it, how brands and advertisers present themselves to us, and how we present ourselves to others. We’re in charge of the persona(s) we present online and how we want members of the digital world to see us (and I’m not just talking about avatars in Second Life). And it’s only going to get better (or worse, depending on how you look at it). We’re moving from computers to smart books to smart phones to well, what’s next? With mobile devices becoming increasingly dynamic, we’ll never have to disconnect. Social media will be with us wherever we are, both onscreen and via augmented reality all around us. Want to know if your friends like a bar you’re walking by? Want to see who’s hanging out within a 200m radius? Geotagging will help with that. With people proving their value via the rise in importance of social currency, a new version of influencers will come into their own - helping to start the trends previously dictated by a powerful few and now easily cemented by the power of many. Social media is exciting because it gives ordinary people the power to influence others through brand new channels. And because these channels continue to thread back into the offline world, it’s only going to get more interesting - as long as brands can keep up and get in on it too. 2010 is all about curating your life and navigating your experiences through social technologies. So go out there and have fun - but make sure you link up on Foursquare/Twitter/Facebook/Tumblr and tell us about it - or else, how will we believe it really happened?

Commentary by Michelle Schildkret Head of Digital

www.cakegroup.com | 17

Summer 20 Despite several small festivals going to the wall in 2009, it seems like The Great British Public can’t get enough of their summer fix of tents and music. And with new events springing up every week, it looks like 2010 will be no exception. The big boys, Isle of Wight, V Festival, T in the Park, Reading and Glastonbury, know what they are doing and are selling out earlier and earlier. They’ve also recognised that their demographic is widening in age and so have started launching packages to suit all ages and budgets with a frankly bewildering range of accommodation options, quiet camping, extra days and the like… But it’s the boutique sector that’s seeing the sharpest rise in the number of events and ticket sales. While bands are becoming harder to book (there literally aren’t enough of the big names to go around in July and August) public demand seems to grow each year. Festival-goers, now quite often in their late 30’s and possibly with a small child in tow, are looking for better facilities; where a patch of grass and occasional access to a chemical toilet was fine at Reading in 1989 most customers are looking for that bit more comfort. And this rise in demand for prepared accommodation, organic food stalls and somewhere to charge the iphone, means festival promoters have had to increase the quality of services on offer – oh, and of course the ticket price. Brands have been slightly slower to take advantage of this second tier event activity, preferring to talk to the masses at V Festival or T in the Park instead. However, events like Bestival would indicate that this is starting to change and that sympathetic, relevant activity, can indeed prove cost effective.

Commentary by Will McHugh Head of Live

18 | www.cakegroup.com

010 G

iven that you’re reading this in January, summer probably feels like a distant memory of early evening pints, picnics in the park, festivals, and a plethora of sporting events. In fact, (and just in case you’ve forgotten) while summer ‘09 was a significant improvement on 2008’s washout, it was not the barbecue bonanza predicted by the Met Office. The damp summer saw a rise in foreign holiday bookings at the end of last summer as various budget airlines announced their 2010 holiday flight programmes well ahead of schedule. International tourist travel is set to grow by 2.2% next year. So what else is in store?

This summer, women’s fashion is all about the 90’s. It’s been on the cards for a while now we’ve exhausted the 80’s so expect to see cycling shorts, sportswear, kitten heels, neon and (unfortunately) everyone’s favourite 90’s garment the body hit the high street. According to Euromonitor, one emerging characteristic in the leisure industry is the rise of concierge travel services, no longer the reserve of the wealthy thanks to the variety of options presented by the internet. The growing prominence of these services allows brands an opportunity to differentiate their products in a saturated market by adding value to their customers, be it by offering an in-airport concierge on-hand to answer immediate requests or dedicating an advice team to help people get more bang for their bucks when it comes to planning their holidays.

So what about that other summer stalwart, the festival? With over 200 contemporary music festivals taking place each summer in the UK, it’s would be no surprise if 2009’s economic situation had taken it’s toll. Surprisingly this was not the case; most major UK festivals sold out almost immediately and combined forecast profits for 2009 were estimated at £450 million. There’s been a significant rise in the attendance of boutique festivals with about 80% of the UK’s 4 million festival-goers choosing boutique festivals over mainstream events.

For men 2010 is the year skinny jeans make their exit, paving the way for the comfort fit jean which features a more roomy leg and a wider cut. Also in the offing is a return to everyone’s favourite country garb, Tweed, ideally worn with a fully buttoned-up shirt. Also thriving are literary festivals such as the Hay Literary Festival and the Edinburgh International Book Festival and with sponsorship and attendance of these events growing year on year, the literary festival scene is a force to be reckoned with. Why this love of festivals? Well, despite living increasingly online we all still want to interact in the real world. Perhaps this isn’t that surprising, as thanks to modern technology we’re more informed than ever. Throughout 2010, the opportunity to experience en masse in the real world (and subsequently comment on it in real-time in the online world) offers brands a strong opportunity to facilitate real world experiences and explode awareness and knowledge online.

Also motivating travel this summer will be the Fifa World Cup in South Africa where up to 450,000 football fans are expected from around the globe. Even if you’re not going, the World Cup is going to be unavoidable at home or abroad in 2010: Look forward to a spike in TV and beer sales throughout the summer months.

www.cakegroup.com | 19

Culture E

very year that passes is defined by its own key cultural moments, moments that distil into ‘do you remember where you were…’ memories, classic films, genre-defining albums, historical events and so on. And with each newyear comes a plethora of ‘hotly tipped’ and ‘Ones to watch’ lists, all staking their claims on the next big thing. 2009 was no different; hotly tipped names in music and film were largely on the mark (the success of megahyped female acts such as La Roux and Florence + The Machine was predictable) as were economic and lifestyle predictions (a recession, unemployment, staying in, etc.). And then there were completely unpredictable cultural moments such as the unexpected death of Michael Jackson on the eve of his ‘This Is It’ tour, accompanied by blanket media coverage and a commercial maelstrom. While we’re not in a position to predict the Universe’s more random happenings, here are some key cultural trends that we think all brands should be aware of in 2010:

ART The art world, traditionally confined to corporate sponsorship of large exhibitions, is more accessible than ever before. In the last year or so, some brands have started to cotton onto this with interesting and experiential partnerships with art (Chanel’s ‘moving art gallery’ collaboration with Zaha Hadid emerged in 2008 and last year saw Rankin and Oxfam collaborate in Rankin Live!) Here are some of the exhibitions to look out for in the next year: • Exposed: Voyeurism, surveillance and the Camera at the Tate Modern • Henry Moore at the Tate Britain • Grace Kelly: Style Icon at the V&A • Irving Penn Portraits at the National Portrait Gallery • The Real Van Gogh at the Royal Academy • Picasso: Peace and Freedom at the Tate Manchester

FILM At the end of 2009 ‘Avatar’, James Cameron’s venture into 3D, hit movie screens. Promoted in collaboration with the LG BL40 Chocolate (phones came with pre-loaded content showcasing versatile multi-media functionality), the movie is also one of the first 3D films getting to grips with the marketing opportunities surrounding 3D. In 2010, 3D films will go mainstream, bringing similar media-

20 | www.cakegroup.com

partnership opportunities with them. Forthcoming titles include ‘Toy Story 3’ and Tim Burton’s ‘Alice in Wonderland’ Also on the menu are a spate of eighties remakes; Wall Street 2, The A Team and Footloose, the penultimate instalment of the Harry Potter franchise and the final third of the Twilight series.

MUSIC In the last year or so traditional supporters of new music, such as Telco brands, have backed away, making room for other brands to make their mark (Barclaycard’s sponsorship of the Wireless Festival being a case in point). For big brands it’s often more commercially viable (and easier) to work with one global artist who will bring in the results (see the recent collaboration between Rihanna and Nokia) than four lesser-known bands waiting to break. That said you can’t beat the brand kudos and repercussions if you do get it right. Here are our ones to watch for 2010: • Delphic - four synthy/electro boys from Manchester who built hype in 2009 and are tipped by every ‘one to watch in 2010’ list going – this one included. • Marina & the Diamonds - heavily touted at the start of 2009, Welsh/Greek Marina is a slow burner, but 2010 looks like it might be her year. • Ellie Goulding - the ‘new’, more electro Florence + The Machine. No, really. • The Drums - a ridiculously hyped Florida via NYC foursome who are playing the NME Shockwaves tour.

Other Big Cultural Moments In 2010, Glastonbury - headlined by U2 - is celebrating its fortieth birthday. Expect to see a variety of limited edition products, from Wellington boots to ice cream.The FIFA World Cup is also kicking off in South Africa. Aside from being a moment of cultural importance, the opportunities for brands are massive (there are obvious opportunities for the mobile market e.g. limited-edition World Cup handsets pre-loaded with exclusive World Cup content) Also taking place are the Winter Olympics in Vancouver. Panasonic have committed to filming the Winter Olympics in 3D, further pushing this technology into the mainstream. The moment the flame is extinguished, the eyes of the world and the brains of marketers will turn to London 2012.

In 2009, our cultural output seemed to echo our national mood: Stagnant and dull. Britain’s Got Talent and X Factor reigned supreme, the music scene was populated by frothy girlish eighties synth pop and our big screens filled with sloppy romantic comedies or big action sequels. Luckily it wasn’t all bad thanks to some hard hitting, coming of age movies (FishTank made a lot of noise), some strong exhibitions (Gilbert + George at the Tate Modern and Anish Kapoor at the Royal Academy), and a stellar summer comeback from Blur. While recessions are rarely relished, they are widely regarded as periods of heightened creativity. A drop in global wealth and the huge changes that come with it can force the least creative among us to start looking at things in a different way, re-evaluating, re-inventing and re-working to forge new and exciting innovation. And what of 2010, should we look forward to a year of feverish innovation and creativity? While it’s unlikely that the creative output of 2009 will be widely felt until beyond 2010, some innovation shifts and changes are already happening. Online has become a great platform for burgeoning creativity and getting your work seen and heard (Fede Alvarez’s short film on YouTube was recently commissioned by a Hollywood Studio), sharing ideas and engaging in collaborative creativity. In 2010 expect to see a lot more collaborative and crowd-sourced creative output from both brands and artists, and an increase in people putting themselves on multiple platforms under their own steam and on their own terms.

Commentary by Simon Moore UK Creative Director

www.cakegroup.com | 21

Overseas Cake opened its doors in New York in May 2009 and it’s a strange and new time for America. A recent survey of everyday Americans pronounced that 7 out of 8 Americans placed the economy above global warming as the most pressing problem. But America is nothing if not refreshingly optimistic. It is a state of mind that exists in every walk of live from the Board room to the Billiard Room this is a nation that defines consumerism and measures success by that very apparent barometer of what one has versus what one would like to have. So where is 2010 taking us? The Obama administration is pulled apart and dissected on a daily basis. Never has a leader of the western world been under such scrutiny. Set against a woeful economy unable to resuscitate itself without state intervention we in the marketing services business are under more pressure to come up with ideas and solutions with cast iron guarantees of success and ROI. To some extent, that’s acceptable - why shouldn’t clients expect agencies to root ideas in pragmatic business terms beyond pure creative indulgence and excellence? But it also leads to risk aversion on a grand scale. There is a current ‘ethos de jour’ which states ‘if you want to be creative go to Amsterdam. If you want to make money, go to New York’. Consumerism goes to the very DNA of North Americans and this is a market that has taken a kicking. But there is no question that brands and consumers are already working their way out of this thing and setting their sights on new (broader) horizons. The way forward - for the immediate 12 months at least - will see social media and digital based solutions allied to an emerging need for a bulletproof CSR programme as adapting to the moving media landscape and the need to take greater care of the world at large becomes increasingly apparent. Recovery on a macro scale? The signs are positive. But without a thorough understanding of how to act within the social media world then it’s going to be a bumpy ride. Strap yourselves in, this is the most exciting yet unpredictable time of seismic social change we have ever known. We all have much to learn.

Commentary by Adrian Pettett Chief Operating Officer

22 | www.cakegroup.com

he more connected we get, the smaller the world feels. As we hit the teens of the 21st century, it’s commonplace to engage with three or four different countries a day via email or phone or IM. Therefore, it is no surprise that what happens abroad has a knock on effect on what occurs on these shores. The US is at the forefront of these developments and innovations; MySpace, Facebook and Twitter have all come from America, and are set to continue setting the standards for the social media world. The 3D push for 2010 is also being pioneered by American film studios, with a spate of 3D movies slated for 2010. And what would 2009 have been without vampires? True Blood, Vampire Diaries and the Twilight series have spread the US vampire mania of 2009 into Europe. Look out for werewolves in 2010 (no, seriously). Sweden’s Spotify will continue to push its argument for legal streaming of music across further territorities. As Spotify extends it’s reach to Android and iPhone platforms, expect to see a rise in people using the music service on the move, negating the need for purchasing.

the USA has people. Chinese internet usage is growing at 41.9% per annum and over 90% of that is broadband and approximately 83% of all Chinese internet users download music. With direct air links to the US and Europe, the highest income per capita, a booming nightlife and great restaurants 2010 is the year that Brasilia will explode as a ‘must do’ destination. Australia is an emerging coffee market. The Aussies spend 1.5bn on it a year, and their thirst for good coffee is increasing. Although instant coffee still comprises the bulk of sales, there is an emerging trend for premium coffee consumed in boutique environments. Owner of ‘St.Ali’ in Melbourne, Australia personifies this rising trend; ‘Coffee should not be viewed as a commodity susceptible to the forces of the market, but as an artisan, high-end product.’ Bulgaria is establishing itself as one of the superpowers of snail exporting. In 2009 they exported 850 tonnes of snails, six times more than the previous year. This isn’t new territory for Bulgaria, they’re also one of the largest exporters of Caviar in the EU and the second largest producers of Foie Gras in Europe.

India is set to become one of the biggest markets for 3G handsets thanks to it’s lack of fixed line country-wide facilities; an estimated 17% of their 1 billion population will be using 3G by 2013. India is also at the helm of entertainment consumption in South East Asia opening up massive commercial opportunities for brands in 2010 and beyond. China has been identified as central to almost every current global issue. Despite ongoing human rights issues China is becoming an ‘indispensable nation’. The demand of China’s increasingly wealthy consumers for the world’s resources will be among the biggest determinants of the planet’s future. The iPhone goes on sale in China this year (albeit without WiFi) and retailers Unicom are already developing market specific apps. Spotify is also planning to go east along with Qtrax, the ad-funded download site which launched in October 2009. Why this migration east? At 330m Internet users to date, China has more users than

www.cakegroup.com | 23

References: Money www.venturebeat.com www.dailymail.co.uk www.telegraph.co.uk www.independent.co.uk www.brandrepublic.com www.businessweek.com www.moneyweek.com www.deloitt.co.uk The Economist Pocket World in Figures 2010

Retail Trends www.brandingstrategyinsider.com www.brandrepublic.com www.trendwatching.com Monocle Anne Lise Kjaar The Times Trend Central

Media www.agentwildfire.com www.moneyweek.com www.brandingstrategyinsider.com www.brandrepublic.com www.businessweek.com www.venturebeat.com www.mashable.com www.brandstrategy.wordpress.com www.luckie.com www.guardian.co.uk The Economist Elle Monocle New Media Age Marketing Week PR week MPG

24 | www.cakegroup.com

: Lifestyle

Summer 2010

The Economist Elle Monocle www.creativereview.co.uk/cr-blog www.trendwatching.com www.mediapost.com

www.flightmapping.com www.worldtravelguide.net www.dailymail.co.uk www.fashionbeans.com

Home Entertainment www.broadcastnow.co.uk www.mashable.com www.brandstrategy.wordpress.com www.luckie.com www.camerjam.com www.creativereview.co.uk/cr-blog www.trendwatching.com www.dailymail.co.uk Elle Monocle Trend Central

Technology www.mashable.com Monocle Anne Lise Kjaar Trend Central The Economist

Social Media

The Economist Monocle Music Week NMA

Culture www.trendwatching.com The Economist BBC.co.uk Elle

Abroad www.venturebeat.com www.dailymail.co.uk www.telegraph.co.uk www.independent.co.uk www.luckie.com www.brandrepublic.com The Economist Monocle Anne Lise Kjaar The Times

www.mashable.com www.brandstrategy.wordpress.com www.luckie.com www.researchandmarkets.com www.brandrepublic.com www.businessweek.com www.cnn.com/TECH The Economist Monocle Anne Lise Kjaar The Times Trend Central NMA

www.cakegroup.com | 25

About Cak C

ake creates ideas everywhere connecting audiences with brands, and turning them into fans.

Sainsbury’s

Cake’s ideas reach people anywhere and everywhere using traditional and digital media, live events and multi-platform branded content.

A 68% sales increase of sustainable Pollack at Sainsbury’s after our tongue in cheek re-brand.

Acquired by Havas Media in April 2008, Cake’s roster of clients includes Vodafone, Motorola, Sky, Unilever, Sainsbury’s and Magners. Cake is also on the COI’s PR roster (recent projects include work for the Royal Navy, The Big Lottery Fund and Visit London).

Princes Rainforest Projects

Some of the agency’s proudest moments include launching Nintendo Wii, branding Brockwell Lido with the Evian logo and twice transforming Trafalgar Square – first into Red Square to promote Motorola’s role in the (RED) campaign then turfing it to promote green spaces for Visit London.

If you’d like to talk to us about how we could help your business, please call Greg, Chris or Jim on +44 20 7307 3100 or email Greg@cakegroup.com

Cake 10 Stephen Mews London W1T 1AG

26 | www.cakegroup.com

Global social media campaign for The Prince’s Rainforests Project reaching 6 million views driving action on climate change.

Sky+ HD Recreation of the legendary Dark Side of the Moon cover to promote a screening on Sky Arts in HD.