Innovation, Ethics and Reason The Grounding Forces in a World of MotionSeptember 2018Table of ContentsExecutive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3Context: A world in motion . . . . . . . . . . . . . . . . . . . . . . . . . . . .5Brands in Motion: The study . . . . . . . . . . . . . . . . . . . . . . . . . . 7Key 2018 takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14Managing a world of motion . . . . . . . . . . . . . . . . . . . . . . . . . .23Appendix 1: Categories by market . . . . . . . . . . . . . . . . . .25Appendix 2: The four realities of motion . . . . . . . . . .29Appendix 3: Survey methodology . . . . . . . . . . . . . . . . . . . 32WE BRANDS IN MOTION 2018Executive SummaryOur 2018 Brands in Motion study finds consumers and B2B decision-makers have even higher expectations for how brands use technology to make their lives better than they did last year .At the same time, respondents across the eight countries in the study also have overwhelmingly high expectations that brands will exercise ethics and responsibility when using technology . Whats driving this call for responsible and ethical innovation? Global headlines and dialogue on topics including Facebooks entanglement with Cambridge Analytica, YouTube and Googles content moderation struggles, Europes GDPR, and the risks and rewards of disruptive technologies such as AI, blockchain and autonomous vehicles .We are also witnessing intense debates (and the accompanying hyperbole) around the future of the European Union and NATO, the viability of a post-Brexit Britain, the ratcheting up of global trade tensions, loud debates on nuclear deals, the proliferation of “fake news,” continued drama around immigration and the unyielding train that is the #MeToo movement . It is against this backdrop of technology-related fears and hyperbolic headlines that consumers are raising their expectations for greater rationality and greater responsibility in their long-term relationships with brands .3 WE BRANDS IN MOTION 2018Brands in Motion 2018 sees three major themes emergeINNOVATION MEETS ETHICSConsumers have high expectations for brands to use innovative technologies, but most are afraid of how those same technologies might disrupt their lives . These fears are causing consumers to demand accountability . 97% said its a brands responsibility to use technology ethically. And if brands cant do it right, then 94% said its the governments job to ensure the ethical use of tech.CONSUMER LOVE IS BINARYWEs Brands in Motion findings indicated that most people have strong convictionsone way or the otherabout both sectors and brands . Consumers around the globe are reserving their greatest love and appreciation for a smaller number of brandsit is harder this year to score high emotional and rational marks from global consumers . This means that competitors of a beloved brand may have a hard time drawing their share of consumer affection .SHOW DONT TELLHow are consumers responding to an increasingly chaotic and uncertain world? By demanding proof over promise . Average global scores for rational drivers of brand motion are up 16 percent and average scores for emotional drivers are up 14 percent, indicating that consumers needs for reason are outpacing their needs to feel emotionally connected to a brand. In addition, consumers still want a balance between purpose and functionality, but in 5 of the 6 countries for which we have year-over-year data, people in 2018 over-index toward brand functionality over brand purpose.4 WE BRANDS IN MOTION 2018Context: A world in motionAll brands are in motion either driven by, or in relationship to, the technologies that dominate their markets and that impact their stakeholders .That motion is relative to the markets in which brands sit, the categories theyre a part of, their competition, their employees, their investors, and current and future customers . Its also driven by environmental factors over which brands have little or no control: global economies, regulatory environments, crises, cultural zeitgeist and politics .In 2018, those external forces have become more turbulent and much more influential . Globally, we see two major groups of environmental forces exerting pressure on brands: sociopolitical forces and technological forces .Consumers want stability in these uncertain times, and theyre looking for less promise and more proof from brands and industries .Three sociopolitical forces driving motion in 2018POLITICAL UNRESTThe past 12 months have seen mounting chaos in both multinational alliances and individual governments around the world . The U .K .s looming Brexit may reshape Europe, and tensions are rising among NATO allies and within other longstanding multinational alliances . In Asia, nuclear weapon concerns on the Korean peninsula and Chinas militarization and economic diplomacy remain under a microscope .TRADE TENSIONSThe United States escalating trade war with China and increased trade tensions with NAFTA and European Union allies, as well as anxiety over what a post-Brexit United Kingdom will mean for both the U .K .s and the EUs economies are contributing to further global strain .#METOOThe #MeToo movement and high-profile comeuppance of abusers in the entertainment, media and tech industries have caused brands to be more cognizant of how they treat women and minorities, both internally and externally .RESULT5 WE BRANDS IN MOTION 2018Three technological and platform forces driving motion in 2018Responsibility and ethical treatment of personal data along with content moderation have been at the forefront of tech coverage this year . Consumers are demanding that brands use technology ethically and that they exercise discretion in their content .RESULTFACEBOOK AND CAMBRIDGE ANALYTICAFacebook took a hit after journalists discovered that a digital political consulting firm called Cambridge Analytica had acquired access to millions of users personal data to create psychographic profiles they used to sway political outcomes in the U .S . 2016 election, the U .K .s Brexit vote and elsewhere .TOXIC CONTENTUnilever threatened to pull its ad dollars from YouTube and Facebook over the tech companies inability to police content . Twitter continues to dominate headlines based on the poor behavior of some of its biggest users and its hands-off approach to moderating .GDPRThe E .U .s General Data Protection Regulation affected how every company operating in the E .U . uses consumers personal data, upping the legal consequences for data breaches and mismanagement of personal information .This world of social and technological turmoil is where brands are moving, operating and reaching their consumers.6 WE BRANDS IN MOTION 2018Brands in Motion: The studyBrand positioning gives way to brand motionU .K . AustraliaSingaporeChinaSouth Africa GermanyIndiaU .S .8 Countries27,000CONSUMERS & B2B DECISION-MAKERS90BRANDS8 CategoriesAutomotive Smart HomeFood & BeverageHealth & Wellness Prescription HealthComputing DevicesFinance & BankingBusiness Tech SolutionsThe traditional concept of brand positioning assumed your brand is moving to a fixed positioning destination and that once it arrived, your goals were achieved . This doesnt take into account that everything else in the environment is moving: your competitors, your consumers and their expectations, the regulatory environment, the global economy, the media ecosystem and more . Brands in Motion updates the static concept of “brand positioning” into “brand motion,” by understanding and mapping those shifting environmental factors from the point of view of the customer .7 WE BRANDS IN MOTION 2018Emotional and rational driversRespondents rated each brand on 10 emotional and 10 rational drivers . Categories were rated on six emotional and four rational drivers .EMOTIONAL DRIVERSCustomer experience*Overall impression*Defend/shame*Social impact*Disappeared*Love/hate*Forgive/not forgetShared valuesLife impactBuzzRATIONAL DRIVERSExecutive behavior*Intent to purchase*Necessary*Innovative*Financial performanceEasy to work withIndustry leaderValue providedResponsibleQuality*Drivers measured at category level .8 WE BRANDS IN MOTION 2018The Motion MatrixThe Motion Matrix is Brands in Motions diagnostic tool, a quick visual way to understand how brands, categories and markets compare on the drivers of motion . The x-axis plots the average scores of a brand or categorys emotional drivers . The y-axis plots the average of rational drivers . The Motion Matrix is divided into four quadrants:Notice something different? Weve changed two of the quadrant names in 2018: 2017s “defender” quadrant is now “provider,” and the old “survivor” quadrant is now called “defender.” Why the change? We felt “survivor” had a negative connotation, and many successful brands fall within that category. Just because a brand scores low in emotional and rational drivers of motion doesnt mean its not seeing strong business outcomes.“Im excited about it, but do I need it?”EMOTIONALRATIONALPROVIDERLargely transactional . Customers need this brand or categorys products, but dont feel emotionally attached to them .HIGH RATIONALLOW EMOTIONALMOVERHarnessing forward motion . Customers want and need this brand or categorys products and have high expectations around innovation .HIGH RATIONALHIGH EMOTIONALDEFENDER AGITATORWaiting for a big moment . Emotional and rational connection is low . Many brands or categories moved here from other quadrants, or are on the precipice of a significant change .Exciting proposition . Customers love these brands and categories, but likely have not tried them and may not see the long-lasting benefit .LOW RATIONAL LOW RATIONALLOW EMOTIONAL HIGH EMOTIONALIm not consistently excited about it, but Im ready to be impressed.”My life requires it, but I dont always feel excited about it.”I need it, and Im excited about having it.”Im excited about it, but do I need it?”9 WE BRANDS IN MOTION 2018The illustrations below show you what we found in 2017 and what changed in 2018.Markets in motionUNITED STATES36 (+2)26 (+1)UNITED KINGDOM21 (-1)15 (-3)51 (+4)45 (+2)SOUTH AFRICA32 (+6)27 (+2)GERMANY50 (+1)46 (+2)CHINA38 (+6)29 (+1)AUSTRALIA2017 2018Every market has its own Motion Matrix, calibrated to the averages of the respondents scores in the geography provided . The matrix is indicative of two things . First, it shows year-over-year changes in the way study participants in individual geographies respond to brands . Second, it allows us to compare markets to see how reactions to brands and categories vary across the globe, and to understand relative optimism or pessimism in each market .In our inaugural Brands In Motion study in 2017 we covered six countries: Australia, China, Germany, South Africa, the United Kingdom and the United States .10 WE BRANDS IN MOTION 2018