Which ads work best in emerging vs developed markets

In ads in emerging markets, focus on functional benefits (e.g. product benefits, quality, value). In developed markets, focus on the emotional experience around the product.

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Many of us sell internationally. Today we’ll look at how you should adapt your campaigns to different types of markets.

P.S.: At Google, I worked on Google Market Finder, a platform that helps you find the most profitable international markets for your product based on Google search data (note: doesn’t work well for B2B).

It also has guides and some tools to help you adapt your operations to new markets (e.g. in Germany and the Netherlands credit card payments aren’t widely used online, so you need to offer alternative methods or people won’t buy). I think you’ll find it useful!


Use functional ads in emerging markets and experiential ads in developed markets

Impacted metrics: Ad performance | Customer acquisition
Channels: Ads
For: B2C

Tip type: Existing research (October 2012)
Previous tip: Use vertical video ads for mobile (All tips here)

Recommendation

In developed markets, use ads with emotional appeals that focus on the experience around the product (e.g. social moments it creates).

In emerging markets, use ads with functional appeals that focus on the benefits, quality, and value of the product and brand.

Important: this research was conducted only on ads of household cleaning products. Be more careful than usual when generalizing it to your product.

Effects

  • Ads can be used to persuade through two different components:

    • Experiential, focused on emotional benefits (e.g. stimulating feelings, imagining being transported to a pleasurable life moment)

    • Functional, focused on rational benefits (e.g. the product works, is safe, reliable, and sold at a good price-quality)

  • In developed markets (e.g. Europe, Japan, North America) experiential ads are more effective at persuading.

  • In emerging markets (e.g. Indonesia, India, South Africa) functional ads are more effective.

  • We don’t know which approach is best in transitional markets (e.g. Brazil, Mexico, Turkey).


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Why it works

  • In emerging countries, we may have doubts about a brand’s basic quality and safety promises, so reassurances in those aspects are key.

  • In developed countries, we take the basic quality of products for granted (e.g. because of EU quality and warranty guarantees), so our enjoyment of the ad and product is more important to persuade us.

Limitations

  • The analysis was on only one product category (household cleaning products). This makes it riskier (than other Ariyh tips) to generalize to a broader variety of products such as fashion, cars, software, or B2B products. Still, the principle is likely to work to a smaller or larger extent in other product categories.

  • Only TV ads were analyzed (165 in emerging markets, 91 in developed markets; Jan 2007 - Aug 2010). The effect probably applies to other mediums like print and online ads, but this wasn’t tested.

  • The researchers did not have sufficient data to reliably study ‘transitional markets’ (e.g. Argentina, Turkey, Saudi Arabia), that are in between emerging and developing markets. So it’s unclear which approach is best to use there.

Companies using this

  • Multinational giants - like the FMCG company on which the data is based (anonymous, but likely P&G or Unilever) - have the capacity and understanding to adapt their campaigns to local markets.

  • Most companies don’t have the ability to adapt campaigns to each market, but some use 2-3 different campaigns across similar market clusters.

Steps to implement

  • If you have the capacity, create different campaigns for different markets.

  • If - like most businesses - you don’t have the capacity to run a huge variety of different campaigns, consider reducing your total number of campaigns so you can at least have two different ad types for emerging markets (functional focus) and developing markets (experiential focus).

  • Additional tool: Google Market Finder (at no cost). It will help you find profitable new markets and adapt to them. It’s the platform I worked on at Google a few years ago 😉


Study type

Field experiment (analysis of 256 household cleaning product TV ads tested in 23 countries by an FMCG multinational).

Research

Zarantonello, L., Jedidi, K., & Schmitt, B. H. (October 2012). Functional and experiential routes to persuasion: An analysis of advertising in emerging versus developed markets. International Journal of Research in Marketing, 30(1), 46-56.

[Link to paper]

Affiliations

IÉSEG School of Management, Catholic University of Lille and Columbia Business School, Columbia University. France and United States

Remember: This research could be disproven in the future (although this is rare). It also may not be generalizable to your situation. If it’s a risky change, always test it on a small scale before rolling it out widely.


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