WARC/AA report reaction: Time for ‘smart marketing’

disciplines nWhile the Qatar World Cup might have its knockers, for the advertising and marketing industry the global competition is set to provide a much-needed shot in the arm. Add in a sprinkling of festive advertising and there is a £10bn bonus on the cards, according to the latest WARC/AA Advertising Expenditure Report.

The report draws its own conclusions, but what about the wider industry? Decision Marketing quizzes industry chiefs to gauge opinion.

Joint chief strategy officer Rowenna Prest welcomes the industry recovery over the past quarter, especially cinema and out of home (OOH) which would have been hit hardest by pandemic behaviour.

However, she adds: “With inflation a key driver of price rises, advertisers need to be more focused than ever in ensuring all elements of their campaigns pay back as strongly as possible. Let’s hope as we head into what’s set to be another record-breaking Christmas media market, that we remember the ROI magic of delivering ‘the feels’ to customers.”

Meanwhile, Fuse chief executive Louise Johnson says we can take some confidence from the positive story found in the anticipated ad spend for 2023.

She continues: “The appeal of sport and entertainment partnerships – sometimes considered a ‘luxury investment’ by many brands – has grown in the last few years due to factors impacting advertising effectiveness, particularly the inflating cost of media and audience fragmentation.

“Specifically, sport’s ability to command mass audiences, particularly on TV, is an attractive proposition for brands seeking a solution to the problem of media fragmentation. The ability to lock-in price over a multi-year period also means that brands can ride the wave of inflation over the mid to long-term.”

For Raconteur director of strategic partnerships David Kells the positive results for publishing are a major bonus, especially an uptick in investments from last year and an encouraging 9.1% increase for newsbrands’ advertising revenue in Q2.

Even so, he is quick to point out that the numbers also reveal the strong recovery from the pandemic has hit some bumps in the road, caused by the ongoing economic instability.

He adds: “Rising operating costs for media owners will undoubtedly have an effect on advertising cards, particularly when brands are more cautious with marketing budgets.

“But all is not lost. Yes, Q4 may seem bleaker than Q2, but having recently navigated a crisis, marketers need to use this experience to their advantage.

“Innovative media owners and brands that tap into their pandemic survival strategies and remain agile and smart with their marketing budgets will stand to profit when the marketing picture starts to improve. Although knowing how long the current disruption is set to last would certainly help steady the ship!”

Strat House founding partner Melanie Welsh, meanwhile, reckons the AA/WARC findings and forecasts are reflective of the ebbs and flows the economy has faced and is facing this year.

She explains: “It’s no surprise ad spend rose by 8.8% in Q2 2022, as businesses found their feet following Covid-19 and the bounce back began. But seeing a slight downgrade of 1.7pp from the previous forecast in July were clearly the initial signs of the cost-of-living impact on ad spend and general consumer spend.

“We can see a positive increase in adspend in Q4, as media and ad slots filled up earlier than usual thanks to the World Cup. However, there is a question mark over whether adspend would have hit another record high this year without the tournament, particularly given the depth of the cost-of-living crisis.

“But for those who are advertising through the ‘golden quarter’ the tone of advertising (beyond the World Cup) will generally move from one of sales to one of support, especially since more people are looking for support during this uncertain period.

“We can also expect brands to push their budgets into Q1 and come back fighting when there’s less competition from the World Cup and Christmas period coinciding.

“For those that can, prioritising search advertising (including ecommerce) and digital spend are sensible options while media inflation is so high. It may not completely mitigate the downward trend in consumer spend, in fact – the lowest since records began according to Deloitte – but those that keep calm and carry on with their marketing investment, wherever they choose to put it, will benefit over the long term.”

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