Karan Chadda

Global digital marketing and communications leader

Do you know if you’re capex or opex?

The brutal logic used in accountancy is a useful tool for understanding where you fit in your clients’ eyes. If you understand how you’re seen, you can deliver a better service and achieve greater growth.

Take the concept of breaking expenditure down into two buckets: capital expenditure (capex) and operational expenditure (opex). Broadly speaking, capex is money spent buying, building or maintaining assets, and opex is money spent on running the company.

Why are these two definitions useful? They help you understand what a client sees when they buy your services.

Advantages and challenges

For instance, if you’re a law firm that specialises in mergers and acquisitions, then a client might see the money they spend on you as capital expenditure. It’s money they only spend because they’re building their business. If they stop investing in growth through acquisition, they’ll probably stop using you. If they delay investment plans, then your planned fee income will be delayed too. The advantages of capex are that it normally has specifically identified budgets associated with it and there is a clear business objective (e.g. buy that company).

However, if you’re a public affairs specialist working with firms in heavily regulated industries, you’re probably operational expenditure. Your clients will need a dialogue with legislators and regulators, either through you, your competitors, a trade association, internal capacity or some mixture of all of these.

The big advantage from opex is more stable and cyclically defensive income; you’re a necessary expense for the business. The challenges typically come from greater or more constant scrutiny: why does this service cost this much? Where can savings be made? Efficiency gains in opex tend to accumulate over time. If costs can be cut by 10%, then future costs have also been cut. It is a perpetual saving.

P&G’s $100m saving

Let’s take a real world example, Proctor & Gamble (P&G) recently cut its digital ad spend by more $100m and claimed to see no detrimental impact from the move. At the same time, P&G’s CEO said the company was investing in new digital capabilities.

In effect, that $100m is an opex efficiency saving, meanwhile capex on digital marketing continues. So some agencies will be growing their business with P&G, others will have lost a lot of income.

How do clients see your firm and how are you using that knowledge to plan and grow a stronger business? Contact us to have a chat about capex, opex and how marketing can help.

Four points of note from the CAP’s report on gender stereotyping within advertising

A lot has been made of the ASA’s announcement that it will more strongly regulate gender stereotypes in ads. Here are four points worth noting from the report.

1. Extending existing work

The report advocates an extension of the ASA’s existing work on gender. At the moment, ads that objectify or inappropriately sexualise women can be banned. The CAP report proposes formalising the framework in this area and extending it to look at gender in terms of:

  • Roles
  • Characteristics
  • Mocking people for not conforming to stereotypes
  • Body image

2. The public believes brands have a responsibility to ensure ads aren’t offensive or harmful

Reading through the qualitative research part of the report is a reminder that people are aware of the ubiquity of advertising and its power to normalise stereotypes and body image.

One participant is quoted as saying, “If you are seeing it all the time, you just get used to it… it becomes the norm doesn’t it.”

There is particular concern among the public in the way children and young people can be affected or even harmed by advertising. It is an issue brands should take seriously.

3. That responsibility extends to social media

The concern for children and young people extended beyond advertising into social media. Again, the qualitative research part of the report is revealing.

This comment, by a 15 year old girl in York really stands out, “Singularly, no but put together and seen on a daily basis then yes. Let’s say you follow Topshop on Instagram and you check it every day. You see that kind of picture every day. Then you get into that mindset that this is what you’re meant to look like. Especially if you see it from a young age. “

It’s a powerful reminder that the daily repetition of images and messages not only sells products, but also leaves a lasting impression on people.

4. It’s not censorship

While the mooted changes will alter how the ASA assesses ads, they don’t affect the process. People will still have to complain about an ad before the ASA will review it and issue its decision. The days of controversial ads are not over.

Why you don’t get leading potatoes

What consultancies can learn from potatoes

Buying a potato is simple, right? You go to a shop, pick up a spud, pay for it, and you’re done.

But that’s how it always happens. Sometimes you buy one potato. Sometimes you buy a bag of them. Sometimes a sack. Then there’s variety. Some people buy plain old baking potatoes. Others will buy Maris Pipers or King Edwards. Foodies might opt for heritage varieties, or different coloured ones, or sweet potatoes.

And still we’re not at the end of the choices available. You might buy oven chips instead of potatoes. But what kind? Fries or chunky chips? Wedges? Peeled or skin on? Curly fries? Smiles? Alphabites? Or why bother with an oven at all? Why not get microwaveable chips? Or just go to the chippy and buy steaming hot, fresh out of the fryer chips?

There are many more potato options, but let’s stop here. The point is that for whatever type of potato product you want, it’s out there. Someone is producing a potato in whatever form you want.

Producers will tightly specify the types and form of potato they’re selling and then market them very specifically. They’ll talk about the benefits, whether that is crisper chips, better flavour or convenience. By clearly defining their offer, they make it easy for customers to understand what’s being sold.

But consultancy isn’t potatoes, is it? It’s bespoke. Consultants treat each client differently, providing a solution based on a client’s needs. You can’t define it like a potato.

Well, it’s true that services can be harder to define. But harder doesn’t mean impossible. You can define which sectors you support. You can say which services you offer. Many consultancies think they do this, but what they actually do is list every possible sector they could work in and every conceivable service a client might want.

Many consultancies, whether they’re offering PR or legal advice, shy away from tightly defining what they do because they’re scared of losing potential clients. But this fear leads to an opaqueness that deters customers.

It manifests itself in two ways. One is the long list of services and sectors on consultancy websites. These lists are supposed to show clients you work in their sector, but actually they’re just hard work. Who wants to look through a list of 20 things to see if what they want is on it?

The second manifestation is bland language. We’ve all seen consultancy websites dripping with industry-specific jargon. The tell tale sign is often an opening line describing a firm as “leading”. A potato would never be described to customers as leading because a potato knows what it is.

Six UK-specific insights from the Reuters Institute Digital News Report

The Reuters Institute recently published its annual Digital News Report. The top line findings were very interesting. We’ve been able to pore over the study’s raw data tables. From our analysis, we’re sharing six insights. Some reinforce conventional wisdom, others turn it on its head.

1. Established media brands dominate

The conversation about news for the past year or so has focused on social media and the spread of fake news. Social media has a strong presence in news distribution with two in five people using it in the last week as a source of news. However, marginally more people use the websites and apps of TV and radio companies as a source of news. The third most used sources are the websites and apps of newspapers. In short, established media brands dominate online news.

2. The BBC dominates most of all

And the BBC dominates more than any other. Online, 51% of British adults use BBC News. Offline, the domination is equally strong, the most used traditional source of news is BBC TV News. The second most used traditional source is BBC Radio News.

To understand quite how dominant the BBC is, it’s worth noting that BBC TV News is watched by more than twice as many people as ITV News and three times as many as Sky News.

3. People really don’t like online ads but blocking isn’t the huge problem publishers feared

Unsurprisingly, people hate online ads. Three in five (59%) think the ads on news sites are intrusive. Only one in 11 (9%) disagree.

Despite this, only about a quarter (22%) of British adults are currently using ad blockers. Even better news for publishers is that of this group, three in five (60%) have temporarily switched off their ad blocker. Moreover, the vast majority of ad blocking occurs on computers, whereas the trend for online news consumption is mobile first.

4. Social media is dominated by Facebook Inc

Moving onto social media, Facebook Inc dominates massively. Of the social networks listed in the study only two of the seven most popular are not part of Mark Zuckerberg’s online empire. It’s worth noting that its two messaging apps, Facebook Messenger and WhatsApp, are used more than Twitter. In the broader context of news on social media, this is not good for Twitter.

5. Facebook Inc dominates social news too

More British adults source news from Facebook than any other social media network. While nearly three in 10 (29%) use Facebook, only about one in eight (12%) use Twitter.

Much was made when the report was launched of the power of messaging apps as news sources. The numbers are startling in other markets, in the UK only one in twenty (5%) adults get news from WhatsApp and Facebook Messenger. This number is likely to grow but that growth isn’t rapid. Back in 2015, the same study found 3% of British adults using WhatsApp as a news source.

6. Twitter is a news source, Facebook is news discovery

The question of whether stumble upon or seek out news is perhaps the most interesting. Twitter is becoming a news feed. More people (7%) think of it as a useful way of getting news than those who say they tend to find news on Twitter while using it for other things (5%).

Conversely, news discovery on Facebook is more serendipitous. One in five (20%) adults mostly see news on Facebook while using it for other reasons. Only about one in 12 (8%) think of Facebook as a useful way of getting news.

We’re happy to meet to discuss further findings

At Evolving Influence, we think it’s important to go beyond the top line and understand how people consume, discover and share news. We’re poring through the data tables from this, as well as looking at data from Ofcom and other sources. If you’d like to learn more about what we’ve learnt, we’d be happy to meet for a coffee and a chat.

Click here to drop us a note and set up a meeting

How to use the new Posts function on Google My Business

Publish your blogposts on Google

Google My Business is what the Yellow Pages used to be. Google scrapes all manner of business data and automatically compiles listings. When people Google your company’s name, this automatic list will appear near the top of the search results. You can improve that listing by verifying your ownership / control of the business and add in additional information, such as opening hours, contact details, etc.

So far, so very standard as a business listings model. The control panel page for your business includes links to analytics (so you can see how often you’re appearing in searches) and AdWords (so you can boost your company’s presence through advertising on Google).A posts function joined these other services at the end of June. It’s pretty simple, all you have to do is:

  1. Go to your Google My Business homepage or app (iOS, Android)
  2. Click on create post
  3. Write 100-300 words about your topic
  4. Select a suitable image from your computer (optional)
  5. Select a button option (i.e. buy here or read more) and provide a link to point the button towards.
  6. Click preview and if you’re happy…
  7. Click publish

So why should you do this? Quite simply, standing out in search is critical for many businesses. The new posts function is an excellent way to ensure those searching for you find out not only where you’re based but also what you think. It effectively lets you publish your thoughts at the top of the first page of Google search results.