New figures from the Advertising Association/WARC Expenditure report reveal that, despite the tough conditions, marketers are refusing to be buffeted by the economic headwinds, with plans to plough more spend – especially digital – behind this summer’s big sporting events and blockbuster movies.
While the report draws its own conclusions, Decision Marketing takes a deep dive into its contacts book to discover the bright lights of marketing industry that are likely to see all the action.
First in line is Buttermilk co-founder Jamie Ray, who insists that while brands will be eager to invest in the growth areas of cinema and sporting events, as ever, ensuring they are standing out from the noise will be paramount to making the most of their budgets.
He added: “The Barbie movie has executed one of the most impressive advertising campaigns that we’ve seen for a film in a long time. Not only has it got people all around the world talking, it’s also successfully positioned Barbie as the ultimate influencer. Brands can learn a lot from the activities of this pink-tastic diminutive doll. She has been the spotlight of the campaign and has found the perfect brands to collaborate with – Barbie has engaged with new and relevant audiences, expanded her reach and ensured the hoards are flocking to cinemas.
“With adspend showing minimal growth this year, it will be important for advertisers to take a cost-effective route, and take a leaf out of Barbie’s book. Influencer marketing can provide brands with a lower cost option but also focuses on the entire marketing funnel – generating awareness, engagement and conversion, just with a single piece of content.”
Meanwhile, Omnicom Media Group UK chief market analyst Bhavin Balvantrai sees the report as an encouraging statement amid economic stagnation.
He explained: “There are green shoots rising as we approach the second half of the year. Broadcaster video-on-demand stands out, with spend rising 18.7% during Q1. This is a trend expected to continue over the forecast period, justifying the strategies employed by the broadcasters to pivot to ITVX, Channel 4’s VOD rebranding and Sky’s broadening streaming strategy. It’s clear audiences are migrating to these platforms and adspend is following, providing more opportunities for targeting.
“We are also seeing more opportunities for advertisers in audio and digital out of home; both areas provide advertisers with clear advantages in better targeting and more dynamic copy rotation. And let’s not forget ‘Barbenheimer‘ – creating the most successful weekend for UK cinema since before the pandemic. Despite the macro-conditions, established media channels are well placed to capitalise on further growth in 2024.”
For Fuse chief strategy officer Alex Charkham, brands should be using this time to reflect on their successes, maintain their confidence, and align on resilient strategies. And with an improved outlook since the previous forecast in April – spend expected to reach £35.7bn – there is certainly some light at the end of the tunnel.
He continued: “The big boost to the next quarter will come from the Rugby World Cup and the FIFA Women’s World Cup through a large injection of ad spend into TV spots, sponsorship, radio and out of home. We hope to see some more meaningful and authentic sponsorships and campaigns forming around these big sporting moments, much like the Vodafone Wimbledon ad. A great example that looks at the difficulties, triumphs, and pride from being the parent of a wheelchair tennis Wimbledon champion.
“It’s also likely that we’ll continue to see these in-person events support the growth trajectory of online formats as brands look to reach the fans across the world. With the World Cup taking place in Australia and New Zealand, fans are taking to social media to catch up on matches missed due to time differences.”
BrightBid CEO Gustav Westman sees another reason for the growth in search and online digital advertising categories, with the rise of generative AI solutions like ChatGPT transforming the entire landscape and changing the entire perception of search. This signals brands’ continued confidence in the power of these solutions to effectively reach their target audience, he reckons.
Westman explained: “Generative AI-driven tools allow advertisers to focus limited resources on where they matter the most, contributing to better efficiency, improving return on investment and setting the business up for long-term revenue growth.
“However, marketers need to adopt a data-driven and educated approach to optimising their spend. It’s crucial to remember that the results will be only as good as the quality of the input, emphasising the need for continuous learning and deepening knowledge about these tools to yield the best outcomes.
“With over 75% of marketers already leveraging AI to some extent in their marketing efforts, and the significance of the competitive advantage these solutions can provide, boosting productivity and driving better results from ad spend, will undoubtedly grow in the future.”
It is the bright spots of the report which point to encouraging signs of recovery in the sector for EssenceMediacom chief executive Kate Rowlinson.
She commented: “The activity surrounding cultural breakthrough moments like the FIFA Women’s World Cup and the release of the ‘Barbenheimer’ movies highlight the industry’s role in driving our economy and the power of brands to use these opportunities to inspire and add value to people’s lives.
“As inflation (hopefully) falls, we need to build up on the momentum already evidenced in categories such as digital, out of home and cinema, and continue to invest in meaningful, attention-grabbing content that continues to resonate with consumers as their confidence grows.”
Given Stephanie Johnson’s role as marketing leader at subscription and billing platform Recurly, it is perhaps unsurprising that she reckons one key solution to the cost of living crisis is subscription models as they offer budget-friendly options for consumers to tackle inflation and are already being successfully adopted by streaming platforms.
Johnson notes that with the drop in adspend on news and magazine publishing, publishers could offer more variable payment options to attract cost-conscious consumers back to their platforms.
She added: “To capitalise on the growth attributed to the new crop of blockbuster movies, cinema and experiential service providers should also consider offering subscriptions that include exclusive screenings and bundled experiences.
“Our recent consumer survey highlighted that financial loyalty incentives, such as discounts and exclusive products or services, have huge appeal.”
StackAdapt director of inventory and partnerships Edmund Mullins, meanwhile, insists the rise in spend across DOOH, cinema, BVOD, and streaming platforms, bodes well for the ever-changing landscape and indicates continued investment as advertisers look to reap the benefits of a multi-channel strategy.
He continued: “To make the most of this, brands should prioritise efficiency by leveraging tools, such as AI-powered platforms, to optimise campaigns for a better ROI. Striking the right balance between costs and engagement is key.
“The anticipated 4% increase in overall ad spend and hope of inflation dropping in 2024 will be ideal for brand confidence. Focusing on innovations and higher rates of engagement will enhance long-term plans for sustainable growth and help build the foundations for activations on new platforms, which has huge potential for deeper consumer engagement.”
Finally, Wavemaker UK chief strategy and planning officer Elliott Millard reckons the Q1 figures show tension between consumer behaviour and media investment.
He explained: “The report clearly calls out the current FIFA Women’s World Cup and the extraordinary cinema slate of blockbusters as drivers of advertising spend. These events and experiences bring people together for shared moments of entertainment.
“However, the increased media spend is weighted towards growth in search and display (channels that are growing ahead of the market). The challenge here is that in the current societal climate, Brits are feeling confused, anxious and stressed, and they are seeking moments of joy. That’s why things like women’s football and Barbie will do well – they offer moments of joy and togetherness. Search and display are not about togetherness; they are increasingly personalised and designed for acquisition.
“In other words, brands need to be more present in the first space much more than in the second. They should be part of those social moments, not just spending around them. People get joy from film. People get joy from sport. Nobody gets joy from a hyper-targeted display ad.”
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