Research Special: Insistence, Persistence, Permanence?

Pause, reflect, evaluate, refocus, and adjust course—the life of our brands requires moments of monitoring, oversight, and decision-making.

When we search for “my brand is my son,” Google returns 569,000,000 results in 0.27 seconds. The first ten pages of results are filled with articles published in the last 24 hours…the most recent one was posted just 6 hours ago.

In recent years, a new establishment has emerged, composed almost entirely of digitally native brands. These are products and services with their own distinct identities and a simple, straightforward value proposition. It is a highly connected society where more than three-quarters of internet users regularly engage in e-commerce.

This article provides an up-to-date overview of the brand landscape and the evolution of consumer behavior and purchasing habits in Spain, based on trends observed from 2005 to the present (Jul ’22).

Let’s get down to earth—I invite you to take a look at the Top 20 most recognizable brands according to the Iope/Kantar Brand Awareness Tracking survey from 2005 to 2022. Here’s what we found:

• Only 8 brands remain in this Top 20 compared to 2005: Carrefour , Lidl, ECI, Coca-Cola, Movistar, DIA, Vodafone, and Renault. Of these, only Lidl has managed to increase its brand awareness (by 16 percentage points, p.p.). The rest have lost an average of -9 p.p. over the past 17 years.
• Classic brands from the food, retail, and automotive sectors have disappeared from the Top 20: Amena (now “Orange,” which is also outside this list), Seat, Citroën, Danone, Alcampo, Eroski, Ford, ING, Audi, VW, and BMW.

The rise of retailers like LIDL and Mercadona (which specialize in private-label products) paints a picture of a future in which the power of large retailers is gradually eating away at the market share once shared by brands and long-standing retailers like Alcampo and Eroski.

According to its latest quarterly reports, Danone (founded in 1919) is one of the companies hardest hit by the growth of private-label brands.

Private label products now account for more than 40% of the FMCG market share, while brands are increasingly having to adjust their 7P strategies to: first, negotiate—in many cases to gain access to these supermarkets and hypermarkets so they can offer their products there—and second, continue negotiating to secure favorable shelf placement.

In the case of automotive brands, the decline in brand awareness stems from several factors:

• A widespread shift among consumers toward more eco-friendly modes of transportation, with new options based on a “green use & disposal” model flooding our cities since the launch of Car2Go (now ShareNow) in 2015.
• A reaffirmation of an eco-conscious mindset aimed at leaving a better planet for future generations.
• All of this is compounded by a pandemic and armed conflicts in energy-producing countries, which directly affect fuel prices.

In terms of advertising spending, we have found no reasons to justify these situations, since none of the sectors, advertisers, or brands studied have drastically reduced their marketing budgets. In fact, as we well know, in many cases these budgets have actually increased to meet the needs of digital environments.

The share of their investment allocated to digital has increased by an average of +17 percentage points since 2010 in these brands’ communication plans.

We will now look at the brands that are taking over these top spots from the previous ones:

The Top 20 includes what we’ve dubbed the ” new establishment“—these 12 brands: Netflix, Amazon, McDonald’s, YouTube, MediaMarkt, Burger King, Mercadona, HBO, Telepizza, Nike, IKEA, and Amazon Prime.

Of these, the brands that have seen the greatest increase in brand awareness are, in this order: Telepizza, Mercadona, Nike, and MediaMarkt.

Netflix and Amazon, which launched 11 and 7 years ago, respectively, have knocked none other than Coca-Cola (with 130 years of history) and Movistar (with 27 years of history) out of the 4th and 5th spots on the list of most recognizable brands.

These are brands that, in their early days, positioned themselves through communication targeted at purely digital environments. The increase in Internet penetration and usage in our country (84% in 2022) led these brands to incorporate “new-old” touchpoints into their plans, adapting lessons learned from ATL strategies while maintaining their focus on performance and optimizing their meticulously managed ROAs. The opportunity for these brands arose during the lockdown. E-commerce penetration grew more during that period than it had in the previous six years, reaching in 90 days the level that had been projected for 10 years from then.

Currently, these brands’ TV spending already accounts for 54% of the media mix. Aside from digital media, of course, the increase in outdoor advertising stands out, growing by 16 percentage points compared to 2015, as does radio, which accounts for 5% of the total.

In short, traditional brands are adapting to new digital environments, while digital-native brands are expanding their reach through traditional media.

A multimedia, multi-device communication strategy that is sustained over time, tailored to each audience, and demonstrates agility in any environment.

And these types of strategies are what both traditional brands and the new establishment are using as a roadmap to achieve short-term goals that will help them endure over time and remain in the memory of an ever-growing number of consumers.

Insistence, persistence, and now, yes, permanence.

MIO One Research Team