Why Carat is putting emotional intelligence at the core of media buying

Media agencies are trying to move beyond the transactional and into the emotional. 

Dentsu-owned global media agency Carat has rebranded around the notion of human and emotional intelligence, supported by a new planning process called “design for people.”

While Carat used to work in a discipline-focused way, its new planning process aims to meet consumers where they are, based on their emotional needs, in a fragmented media landscape, rather than focusing on short-term ROI.

“What clients need from media agencies these days is so much more than media,” said Angela Steele, CEO of Carat U.S.A. “We needed a new way of working that was much more multidisciplinary.”

The new process is designed around “T-shaped teams” that involve bringing in specialists early in the planning process who continue to work together as “scrums” throughout, said Sean Healy, Carat’s global CSO.

“We work in a world with increasing specialism,” he said. “We thought about how we can bring people together who are brilliant at what they do, but can also work on the big picture.”

These teams are set up to work quickly and iteratively, pushing out prototypes and optimizing as they go, rather than creating a static plan months in advance. Carat has developed a methodology and a set of questions that teams can apply to different client briefs, depending on the challenge they are trying to solve. 

“That sits at the heart of design thinking,” Healy said. “The job is never done and you can always improve.”

This way of working became particularly valuable after COVID-19 hit and consumer habits began to shift rapidly, Steele added. 

“Having that ability and approach that allows us to pivot so quickly was crucial,” she said. 

Carat’s new process comes as parent company Dentsu is doubling down on the agency as one of six global brands within the network, which it will whittle down from 160. Campaign recently reported that Dentsu is slashing 6,000 jobs in pursuit of this new model.

Brand EQ

In an industry that’s drowning in data, part of Carat’s goal with its new approach is to help clients make better sense of information to draw impactful insights.

“We're all in favor of analysis and interpretation, and there's probably not enough of that going on right now,” Healy said. “Part of this process is making sure you have the left and right brain looking at the data and figuring out what the story is.” 

To demonstrate that, Carat released its first Brand EQ report this fall, which ranked 48 global brands on their emotional intelligence based on a survey of 10,000 consumers in 10 global markets. 

The study aimed to understand whether certain brands were seen as more or less human by their customers, and how that affects key metrics using behavioral scientist Daniel Goleman’s theory of emotional intelligence. The study assessed brands in five key areas: self-awareness, self-regulation, motivation, empathy and social skills. 

Carat found that many brands that ranked highest for EQ, including Google, Microsoft, Amazon, Samsung and Netflix, are in the tech sector. While that might be somewhat counterintuitive based on recent tech backlash, it shows that consumers find the most human brands deliver connected experiences. 

Facebook and Uber were exceptions in this category, as both scored low on self-regulation and ethics.

“We found a big difference between brands that are experience-led, nimble and able to adapt to people's needs,” Healy said. “They’re able to meet people’s needs more quickly.”

On the flip side, auto and finance brands ranked low on the EQ index, with the exception of Visa and Mastercard, which placed ninth and 20th, respectively. Just 50% of respondents said that brands in these verticals understand them and their needs.

“Those are probably two categories that have the most room for improvement when it comes to empathy,” Steele said. “They tend to be very transactional. [They’re focused on] deals and price as opposed to having that higher purpose, empathy and understanding of customer needs.”

Across the board, brands have a way to go to improve the way they convey empathy and demonstrate their ethics, two of the most important elements of EQ. Just 53% of brands ranked highly in both categories, indicating a broader erosion of consumer trust in institutions. 

The biggest takeaway from the report is that EQ really does drive ROI. Brands that ranked high on EQ scores outperformed low-ranking brands by share price by more than 400% over the last 10 years, while the top 20% of high-scoring EQ brands outperformed the major stock indexes by 575%. 

That’s particularly important as Gen Z comes of age and begins to wield more influence and purchasing power. 

“Gen Z weighs more than their wallets,” Steele said.