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  • Social media to be fastest-growing channel by 2024: Zenith ad spend forecast

    Social media to be fastest-growing channel by 2024: Zenith ad spend forecast

    Mumbai: Social media will be the fastest-growing channel between 2021 and 2024, with an average annual growth rate of 14.8 per cent, closely followed by online video at 14.0 per cent, predicts Zenith’s Advertising Expenditure Forecasts report, published on Monday. The global ad market will continue its remarkable recovery from the 2020 downturn with 9.1 per cent growth in 2022, after 15.6 per cent growth in 2021, according to the report. Retailer media advertising is set to grow from $77 billion this year to $143 billion in 2024, it said.

    Social media is leading ad growth and will overtake television next year, estimates Zenith, with social media platforms embracing commerce and developing new advanced interactions between brands and consumers. The global data analytics firm expects social media ad spend to reach $177 billion in 2022, overtaking television at $174bn. Social media ad spend will rise to $225bn by 2024, when it will account for 26.5 per cent of all advertising, followed by paid search at 22.5 per cent and television at 21.0 per cent. Brands can use self-serve tools to create augmented reality experiences and then distribute them through targeted advertising, which can powerfully lift awareness and intent to purchase.

    Covid-19 setbacks have extended the period of heightened digital transformation and thoroughly disrupted shopping habits. Many consumers who would prefer to browse and purchase in person are shopping online by necessity. Businesses have responded by investing more than would otherwise have been justifiable in new technology, infrastructure, organisational change – and advertising. This includes brand advertising to promote e-commerce platforms, performance advertising to direct traffic to them, and advertising within these platforms (‘retailer media advertising’) to promote specific products, all of which have surged.

    Digital advertising as a whole will exceed 60 per cent of global ad spend for the first time in 2022, reaching 61.5 per cent of total expenditure, and will increase its share to 65.1 per cent by 2024. Zenith estimates that global ad spend will reach $70577billion in 2021, up from $63477billion  in 2019, and will rise to $87377billion by 2024. Global ad spend will expand by 5.7 per cent in 2023 and 7.4 per cent in 2024 as brands continue using advertising to spur further growth in e-commerce.

    “Digital Transformation in India continues to be a priority with one in two corporates having a digital transformation at their core,” said Zenith India CEO Jai Lala. “The pandemic has further accelerated digital growth amongst consumers with increased consumption across platforms in the area of entertainment, purchase, social, education and finance, amongst others. All these factors have led to a steady increase in ad spend making digital the fastest growing medium.” 

    Television advertising remains the easiest route to mass-audience brand awareness, despite years of audience losses to digital media. Brands’ reliance on television is fuelling rapid media inflation, which will continue even after the comparison with 2020 has passed, says the report. Zenith forecasts the cost of television advertising to rise by 11 per cent in 2022, compared to four per cent for out-of-home, three per cent for digital display, two per cent for radio, and zero for print. Brands will have to confront their dependence on a medium that consistently delivers smaller audiences for higher prices.

    Online video is fragmented and complicated to navigate. Multiple platforms deliver content through multiple devices to multiple screens, while ads may be passed through a chain of demand-side platforms, exchanges, ad networks, and content delivery networks before reaching the consumer. But, by investing in data and planning technology, and building partnerships with providers, brands can use online video to increase their reach and reduce their costs. Zenith forecasts online video ad spend to increase from $62 bilion in 2021 to $91 billion in 2024 when it exceeds 50 per cent of this size of television for the first time. Television ad spend will rise from $171 billion to $178 billion over the same period.

    Progress towards containing Covid-19 has been slower than expected with the emergence of new variants, and consumers have been less willing to resume in-person shopping. Businesses have continued their heightened investment in digital transformation, during a period in which many expected to ease back as consumers returned to shops. Digital advertising has therefore been stronger in the second half of this year than previously expected. Zenith now estimates that digital advertising will grow by 25 per cent year-on-year in 2021, compared to the 19 per cent estimated in the previous forecast, published in July.

    This structural change in the economy means that advertising is playing a greater role in driving sales growth through e-commerce. In particular, it has sparked a surge in retailer media advertising: display or search advertising that appears on e-commerce platforms.

    Retailer media can be highly effective, allowing brands to target active buyers at the point of purchase. Zenith estimates that retailer media advertising surged from 24 per cent growth in 2019 to 53 per cent in 2020, and then 47 per cent in 2021, when it totalled $77 billion. This is equivalent to the sums spent on newspaper, magazine, radio and cinema advertising combined, and accounts for 20 per cent of all expenditure on digital display and paid search advertising. By 2024, retailer media ad spend is expected to reach US$143bn, and 27 per cent of display and search. Much of this will be incremental to existing ad expenditure, coming from commercial budgets previously used to negotiate for shelf space in brick-and-mortar stores.

    The rise of the digital economy has also stimulated other forms of advertising, including brand campaigns on television and out-of-home, where digital brands are now prominent. The share of global GDP contributed by advertising had been rising steadily before the pandemic, from 0.72 per cent in 2014 to 0.75 per cent in 2019. After the step-change in digital media consumption and e-commerce last year, it is forecast to reach 0.77 per cent in 2021 and 0.80 per cent by 2024. This will be the biggest rise in advertising’s share of GDP since the late 1990s.

    Ad spend in all regions is now well above pre-pandemic levels, and all are expected to grow healthily over the next few years. Zenith expects digital transformation to slow down, but not go into reverse, as the pandemic eases in 2022 and beyond. The pandemic has accelerated trends that were already fundamentally reshaping the economy and will continue to do so. Zenith forecasts 14 per cent growth in global digital ad spend in 2022, up from the previous forecast of 10 per cent, followed by nine per cent growth in 2023 and 10 per cent in 2024.

    Paid search will grow by 9.8 per cent a year, primarily driven by retailer media, and out-of-home will enjoy solid 7.4 per cent annual growth as foot and vehicle traffic return to normal. Radio and television will grow marginally, by 2.2 per cent and 1.4 per cent respectively, while print declines by 4.7 per cent.

    “As consumers rely ever more on digital technology to connect and entertain them, and to inspire and fulfil their purchases, advertising is playing a greater role in driving sales and brand growth,” said Zenith head of forecasting Jonathan Barnard. “Over the next three years, we expect the ad market to achieve its highest rate of sustained growth since 2000.”

  • Fastest growth in travel advertising to come from India: Zenith report

    Fastest growth in travel advertising to come from India: Zenith report

    Mumbai: Travel advertising is poised for rapid growth as brands reset their relationships with consumers after the great rupture of 2020, according to Zenith’s Business Intelligence – Travel report. The report, published on Monday, forecasts that travel advertising in 13 key markets, including India, will expand by 24 per cent in 2021, twice as fast as the advertising market as a whole, before 36 per cent growth in 2022. 

    Significantly, Zenith expects the fastest growth in travel advertising to come from India, where travel ad spend will be 31 per cent above the 2019 baseline by 2023. Here, rising disposable incomes mean more people are travelling, and existing travellers are travelling more frequently.

    Zenith forecasts digital ad spend by travel brands to grow by six per cent a year between 2019 and 2023. By 2023 travel brands will be spending 70 per cent of their budgets on digital advertising, an increase from 63 per cent in 2020.

    Travel advertisers spend more on digital advertising than the average brand – 63 per cent in 2020, compared to 58 per cent on average, as per the report. This is not surprising for a category that has been well ahead of the market in digital transformation, conducting 32 per cent of sales by e-commerce in 2021 compared to 20 per cent for retail as a whole.   

    “Travel was one of the earliest sectors to embrace digital as booking went online,” said Zenith global chief strategy officer Ben Lukawski. “Post-Covid, the best-performing brands will complete this transformation by making the total experience digital, from reducing form-filling to contactless entry, removing nearly all possible friction from the experience.”

    Digital travel advertising aims to capture consumers in the early stage of research, through search advertising and display and video ads within relevant content. As travel becomes ever more digital, digital advertising will become even more important for both brand building and conversion. Integrating travel apps with vaccine passports, using them to help consumers navigate local Covid-related rules and bureaucracy, and offering digital concierge services will accelerate the transition of travel towards a seamless digital experience, from initial research to enjoying the destination.

    Furthermore, travel advertisers spend substantially more of their budgets on newspapers, magazines and out-of-home than average (20 per cent in 2020, compared to 13 per cent for the average brand), and substantially less on television (13 per cent compared to an average of 24 per cent), the report observed. Consumers are looking for choice and value, so media that allow brands to display a range of options and some details of pricing are particularly effective. Travel ad spend in print is falling as circulations continue to shrink, but out-of-home is forecast to recover from its slump in 2020 and grow at an average rate of six per cent a year between 2019 and 2023.

    Pent-up demand for travel will drive rapid growth in travel ad spend over the next few years, but it will be a long road back to pre-pandemic spending. Travel ad spend will be still 33 per cent below its 2019 level this year, while the ad market as a whole will be seven per cent ahead, notes the report. It will take until 2023 for travel to exceed 2019 levels of spending when it will reach $19.6 billion.

    Travel advertising was one of the categories hardest hit by Covid-19. The travel ad market lost nearly half its value in 2020 (46 per cent), while the ad market as a whole shrank by just four per cent. Zenith estimates that travel ad spend fell from $18.0 billion in 2019 to $9.7 billion in 2020.  

    As global travel starts to recover, travel brands must rebuild their relationships with consumers as they adapt to the realities of post-Covid travel. Brands will have to refocus their communications on different audiences as they adapt to the decline of business travel as companies coordinate more international business with remote meetings, and address consumers’ concerns about the sustainability of travel, and adapt to the growing demand for low-carbon journeys.

    “As travel begins to recover from the unprecedented drop in demand in 2020, brands are rebuilding their relationships with consumers, using digital technology to guide them at every stage,” said Zenith head of Forecasting Jonathan Barnard. “Online video, in particular, will play a key role in creating emotional connections with consumers, inviting them to take their first step on their digital journey.”

    The robust US ad market is pushing up media prices, which is the main reason why travel adspend will be 13 per cent higher there in 2023 and in 2019. Other mature markets will range from +9 per cent to -9 per cent growth over this period, depending on consumer demand, media inflation, adoption of digital technology, and a myriad of other reasons. In all markets, though, the recovery of travel advertising from the slump in 2020 will be well behind the growth of the market as a whole.

    The thirteen markets included in this report apart from India are Australia, Canada, China, France, Germany, Italy, Poland, Russia, Spain, Switzerland, UK, and the USA, which between them account for 74 per cent of total global ad spend. The report covers domestic and foreign travel for business and leisure.

  • Appliance advertising to exceed pre-pandemic level by 24% in 2023: Zenith report

    Appliance advertising to exceed pre-pandemic level by 24% in 2023: Zenith report

    Mumbai: Forced to spend more time at home, consumers are investing in making their homes more pleasant to live in, fuelling rapid growth in demand for both large and small appliances, particularly cookers, washing machines, dishwashers, and air conditioning units, as per Zenith report. Zenith forecasts six per cent annual growth in home appliance ad spend in 2022 and 2023 in 12 key markets, including India, predicting that home-appliance advertising will grow ahead of advertising as a whole in 2021, expanding by 12.6 per cent while total advertising grows by 11.5 per cent.  

    According to the report, digital advertising accounted for 55 per cent of home-appliance ad spend in 2020, up from 51 per cent in 2019 with brand building and e-commerce expected to further drive 10 per cent annual growth in digital ad spend. According to Euromonitor International, e-commerce rose from 23 per cent of home-appliance retail sales in 2019 to 32 per cent in 2020, compared to 16 per cent of the market as a whole in 2019, and 21 per cent in 2020. 

    Zenith expects home-appliance brands to continue to invest in e-commerce over the next few years, driving 10 per cent annual average growth in their digital ad spend between 2020 and 2023. Digital advertising will rise from 55 per cent to 57 per cent of their ad budgets over this time.

    The strongest growth in home-appliance advertising was observed in India and Russia as consumers make more first-time purchases. Zenith forecasts it will grow at an average rate of 18 per cent a year between 2020 and 2023 in India. The rapid growth will be in part a reaction to its decline in 2020, which was much steeper than average, with spending down 15 per cent in India. But growth should remain strong after a swift recovery in 2021, as rising personal incomes allow households to buy new types of appliances for the first time.

    Over the past few years and especially during the pandemic, home appliances in India have witnessed substantial growth, said Zenith India CEO Jai Lala. “Consumer sentiments are changing towards the category – from being a luxury item to now as a need-based one. An increase in spends will be towards digital followed by TV and print amongst other mediums,” he added.

    Television is still a vital channel for home-appliance brand-building, supplemented by out-of-home, as per the report. Home-appliance brands spend substantially more on these media than the average brand: in 2020 they spent 29 per cent of their budgets on television advertising, compared to an average of 24 per cent, and 7 per cent on out-of-home, compared to four per cent. Zenith forecasts out-of-home expenditure by home-appliance brands to grow eight per cent a year between 2020 and 2023. Television, suffering from the continued migration of audiences to digital channels, will lag behind slightly, with growth averaging six per cent a year.

    Zenith predicts that advertising expenditure by home-appliance brands will rise from $4.4 billion in 2020 to $ five billion in 2021, well ahead of the $4.5 billion spent before the pandemic in 2019. By 2023, ad spend will reach US$5.6 billion. Despite the easing of coronavirus restrictions, Zenith expects consumers will continue to devote more of their time and budgets to the home than they did before the pandemic.

    “In most markets, the increased appetite for home improvement is incentivising home-appliance brands to step up their communications activities substantially,” said Zenith head of forecasting Jonathan Barnard. “Most of this growth is going to digital channels to support increased e-commerce activity, but traditional media like television and out-of-home will remain essential tools for maintaining mass brand awareness.”

    Digital advertising will become even more important to home-appliance brands over the next few years as they continue to embrace e-commerce, as per the study. Home-appliance brands were already well ahead of the market in adopting e-commerce before 2020, but the pandemic led to a step-change in home-appliance e-commerce. It is essential both for brand building – mainly using online video, native advertising, and social media – and performance, using paid search.

    “Faced with rising interest in the purchase, the increased role of digital in the mid-to-lower funnel, and a greater focus on delivering direct-to-consumer experiences, appliance brands have never operated in a more demanding and complex marketplace,” said Zenith global strategy lead Drew Erskine. “Successfully building brands for the long term will require agile strategies that find the balance between cultivating desire through broad communications and converting interest, often digitally, in more relevant ways.”

    The 12 markets included in the report are Australia, Canada, China, France, Germany, India, Italy, Russia, Spain, Switzerland, the UK, and the US, which between them account for 74 per cent of total global ad spend. The report covers large and small home appliances, including air conditioners, dishwashers, fridges and freezers, heaters, kitchen appliances, ovens, personal care appliances, vacuum cleaners, and washing machines.

  • Rajiv Gopinath named chief product & solutions officer at Publicis Groupe

    Rajiv Gopinath named chief product & solutions officer at Publicis Groupe

    Mumbai: Publicis Media Services has bolstered its leadership team and elevated Rajiv Gopinath to the position of chief product and solutions officer. The company has also promoted Ajit Gurnani to chief growth officer, media services.

    Gopinath steps up as a chief product and solutions officer from being a chief client officer at Starcom, where he has been instrumental in building strategic functions and upscaling the business. In his new mandate, Gopinath will be leading product development and fortifying the existing offerings while acquiring new products at Publicis Media Services. He will also be helping brands to strengthen their digital offerings, enabling data partnerships, data collection, research, and tools said the agency.

    While Gurnani was spearheading the role of chief client officer at Zenith. In his new role as chief growth officer, Publicis Media Services, he will drive the ‘Power of One’ initiative with non-media entities and agencies of Groupe. 

    The new appointments are part of the agency’s goal to realign its media capabilities and strengthen its growth vertical to create a single-minded focus on new business development. The structure is strategically built to encompass clients and drive the synergies between data, tech, and digital to deliver scaled media solutions, the agency said in a statement.

    Publicis Media Services CEO, Tanmay Mohanty, said, “I am delighted to have Rajiv Gopinath and Ajit Gurnani as a part of Publicis Media Services. Their deep understanding of data, digital, tech, and media tied with a proven track record in business growth will help us in the realignment of our media services. In our continuous efforts to strengthen our team, we are confident that Rajiv and Ajit’s expertise and vast experience will add significant value to the organization.” 

  • KBC returns with a bevy of sponsors for its 13th edition

    KBC returns with a bevy of sponsors for its 13th edition

    Mumbai: Sony Entertainment Television (SET)’s iconic quiz show – ‘Kaun Banega Crorepati’ has returned with its 13th season on Monday. The show’s creators have stepped up the game with a bevy of sponsors backing the show hosted by megastar Amitabh Bachchan.

    With the second wave ebbing away, and ad volume returning on TV, the broadcasters are optimistic of a better show than the 2020 edition which was marred by the Covid-induced challenges. First, the show had to be shot in absence of a LIVE audience, and second, the ad rates reeled under the pressure of an economy battered by the pandemic’s first wave. It’s telecast also clashed with the 2020 edition of Indian Premier League (IPL), which had witnessed a record viewership in the pandemic year.

    For the latest edition which began airing on Sony TV on 23 August, the quiz show has on boarded two ‘co-presented by’ sponsors including Cadbury Dairy Milk and BYJU’s and four ‘co-powered by’ sponsors including Hyundai Motor India, Asian Paints Royale Glitz, Ultratech Cement and Zydus Wellness (Complan). Last year, it had only roped two ‘co-powered by’ sponsors and seven ‘associate’ sponsors.

    This year’s ‘associate’ sponsors include CERA, Pharmeasy, IDFC First Bank, LIC of India, Bharat Matrimony, and Reserve Bank of India which has come on board as ‘special partner’. The four sponsors including Asian Paints, Ultratech Cement, IDFC First Bank, LIC of India and Reserve Bank of India were associated with “KBC” for the previous season as well. The audience too has returned to the sets, however, the shooting is happening as per Covid protocols.

    According to a media planner, the entire sponsorship basket for “KBC 13” is covered within a window for Rs 30-60 crore, with the ad rates ranging from Rs 3 to 4.5 lakh per 10 seconds. The show has also roped in Acko General Insurance as ‘co-presented by’ and Asian Paints Royale Glitz as ‘décor partner’ for KBC Play Along, a game where viewers can also participate in the game show via OTT platform SonyLIV.

    The streaming platform SonyLIV is also exploring deals with advertisers for the show by offering custom packages and engagement initiatives such as KBC Play Along. “The CPM rates vary depending on the targeting, category, size of investment one may choose, ranging from Rs 180-240”, said Zenith, senior vice president – digital transformation, Rashmi Sehgal.

    “SonyLIV has one of the most dynamic non-fiction reality line-ups and this ensures a keen interest from advertisers for a partnership. Their unique proposition of marrying the show with digital engagement properties like Play Along make it appealing. This has attracted advertisers, across FMCG to digital first brands, to help them reach more than 100 million digital natives,” she added.

    The latest data from Broadcast Audience Research Council (Barc) also indicates an uptick in the ad volume on Television. According to its latest report, the ad volumes for July 2021 registered a 14 per cent growth over July 2020. As many as 869 new advertisers chose Television in July 2021, re-affirming their trust in the medium.

    The expectations are also bolstered by the massive vaccination drive across the country, which is also likely to boost consumer sentiments. While there are still apprehensions of another Covid wave, the advertisers have expressed confidence of a ‘stronger festive season’ in 2021.

    However, similar to last year, the current edition of the quiz show will also end up competing with IPL, which is set to resume on 19 September. As many as 30 matches are still to be played in the current season, which was suspended mid-way in May. The cricket league will be followed by the ICC Men’s T20 World Cup in October.

    “Post Covid, the ratings and performance of impact shows have increased dramatically and KBC should be riding on top of it to attract many sponsors,” said DCMN India, head of media and growth, Mohit Gyanchandani. “KBC has always been a top choice for sponsors in terms of impact and lands exactly on the touch point to deliver fresh content and high ratings to the advertiser. This season has made some small changes in the overall format which would make it more fun and interesting to watch.”

  • Global cost of TV advertising up by 5%: Zenith

    Global cost of TV advertising up by 5%: Zenith

    MUMBAI: The overall global advertising expenditure is set to grow 11.2 per cent in 2021, according to Zenith’s latest mid-year Advertising Expenditure Forecasts report, released on Monday. This rise will mainly be driven by the exceptional demand for performance-led ecommerce advertising on online video, says the report.

    In fact, the cost of television advertising is up 5 per cent this year on average, well ahead of its one per cent adspend growth rate, led by rapid recovery in ad spend and continued migration of audiences from traditional to digital channels which is fuelling substantial increases in media prices, particularly for television. The volume of audiences reached worldwide via television is, however, shrinking.

    Digital, on the other hand, is growing mainly due to rising audiences and more extensive monetisation, with online video inflation averaging seven per cent, and social media roughly flat, compared to their 26 per cent and 25 per cent respective ad-spend growth rates. Advertising expenditure will total $669 billion this year, $40 billion more than was spent before the pandemic in 2019, as per the report.

    Growth in ad spends is expected to remain robust in the medium term, with 6.9 per cent growth forecast for 2022 and 5.6 per cent for 2023.

    Social media and online video have eclipsed traditional static display, which is forecast to shrink by 15 per cent this year. Overall, Zenith expects digital advertising to grow by 19 per cent in 2021, and increase its share of total adspend to 58 per cent, up from 48 per cent in 2019 and 54 per cent in 2020.

    Most other media are enjoying growth this year, as spending rebounds from the 16 per cent drop in traditional media adspend in 2020. Cinema and out-of-home were the worst affected by COVID-related restrictions, shrinking by 72 per cent and 28 per cent respectively, and will enjoy the fastest recovery in 2021, with respective growth rates of 116 per cent and 16 per cent.

    Radio advertising, which shrank by 22 per cent in 2020, is forecast to grow by four per cent in 2021, while television fell eight per cent in 2020 and is forecast to grow one per cent in 2021. Print will continue its long decline, now in its fourteenth consecutive year, with an eight per cent drop in adspend in 2021. In 2023 adspend in all these media will still be below 2019 levels, though cinema and out-of-home will have made up almost all of their lost ground.

    Audiences continue to migrate online, and online video viewing is growing rapidly, even as traditional television ratings shrink again after a one-off spike when lockdowns began in 2020. Advertisers value online video as a means of maintaining reach while television declines, but it’s an effective form of brand communication in its own right. Demand is strong, although the popularity of subscription-funded video-on-demand has helped limit the supply of high-quality online video available to advertisers. Zenith predicts that online video advertising will be the fastest-growing digital channel in 2021, rising by 26 per cent to reach $63 billion.

    The coronavirus pandemic has accelerated the structural shift in the economy from bricks-and-mortar sales to ecommerce, driving more consumers than ever to research and complete purchases online. Brands have responded by forming partnerships with retailers and creating new direct-to-consumer operations, using performance-driven advertising – primarily in social media and paid search – to lead consumers down the path to purchase. Zenith forecasts that social media advertising will expand by 25 per cent this year to reach $137 billion, overtaking paid search in scale for the first time. Paid search will expand by 19 per cent to reach $135 billion.

    Much of this is new money to the ad market, coming from small businesses that have had to pivot rapidly to ecommerce to survive lockdowns, and from budgets that brands would previously have allocated to retailers to secure physical shelf-space, which they are now spending on display and search ads on retailer websites. The shift to ecommerce will slow down as coronavirus restrictions lift and economies open up again, but won’t go into reverse. Zenith expects ecommerce to continue to pull in incremental revenues to the ad market, driving 13 per cent growth in social media and 12 per cent growth in search in 2022.

    “The online video landscape continues to transform, fuelled by the growth of streaming services and connected TVs,” said Zenith global chief digital officer Benoit Cacheux. “Its continued evolution requires a radical rethink of how to build the optimal screen-neutral reach model. The ingestion of new data sources into TV planning also creates further opportunities to further sync TV and video planning.”

    All regions will enjoy robust ad spend growth in 2021, with Asia Pacific showing a nine per cent growth.

    The US will be by far the largest contributor to global growth in 2021, accounting for 46 per cent of the $67 billion added to the global ad market this year, followed by China with 11 per cent, and Japan and the UK with six per cent each.

    “After a very tough year last year, the ad market is enjoying rapid and broad-based recovery, and will end this year well above the level it achieved in 2019,” said Zenith head of forecasting Jonathan Barnard. “Digital advertising is becoming a more effective tool for brand growth as media and commerce continue to move online, attracting greater investment from large brands and small businesses alike.”

     

  • Alcohol digital ad spend grows to 24% in 2020

    Alcohol digital ad spend grows to 24% in 2020

    MUMBAI: Alcohol ad spend in 12 key markets, including India will grow by 5.3 per cent in 2021, ahead of the 4.9per cent growth of the ad market as a whole, as brands recover from a much steeper drop last year, according to a report by media agency Zenith published on Monday. Alcohol advertising will then grow roughly in line with the market, with 4-5 per cent annual growth in 2022 and 2023.

    Pandemic forced the alcohol ad spend to move online

    Alcohol brands have historically been slow to commit to digital advertising, devoting less than half as much of their budgets to it than the average brand in 2020. This is changing rapidly now. The closure of hospitality venues meant that brands needed a new route to market. Breweries, distilleries, bars, and restaurants diversified into direct-to-consumer shipping and takeaway drinks, facilitated by e-commerce, and advertised heavily on digital media, particularly social media. Alcohol brands increased their spending on digital media from 21per cent of budgets in 2019 to 24per cent in 2020. Seeking to create compelling brand experiences at home instead of at the bar, drinks companies invested in owned assets such as brand websites and educational content. Spirits brands were particularly prominent, using influencers and trade partners to teach consumers to mix their cocktails, for example.

    “Spirit brands have surpassed beer brands in terms of sales value by offering more premium experiences and rituals around their product and serve,” said Zenith global chief strategy officer Ben Lukawski. “With the pandemic taking audiences away from the on-trade we have seen a greater emphasis on bringing these premium experiences in the home through owned digital content.”

    Consumers are now much more aware of the available options for buying alcohol online, and alcohol brands now have distribution networks in place to supply them. Zenith expects brands to expand their digital advertising to support alcohol eCommerce even after pubs and restaurants are fully open, fueling 9.2per cent annual growth in digital ad spend between 2019 and 2023 when digital advertising will account for 30per cent of alcohol advertising budgets.

    Adspend on Television & OOH less effective

    Alcohol brands traditionally rely heavily on television and out-of-home advertising, spending twice as much on television as the average brand and nearly four times as much on out-of-home. Alcohol brands devoted 49 per cent of their budgets to television in 2020, compared to 24 per cent for the average brand, and 19per cent to out-of-home advertising, compared to 5per cent. This tactic has become less effective as audiences shift to digital media, though, particularly the young consumers most likely to visit a new bar and try out a new drink.

    Zenith predicts alcohol brands will reduce their expenditure on television by 2.4per cent a year to 2023, compared to the 2019 baseline, as traditional broadcast audiences continue to shrink. Out-of-home advertising, by contrast, will grow by 1.1per cent a year, even taking into account the pandemic-induced reduction in foot and road traffic. Television’s declining reach makes out-of-home ubiquity even more valuable.

    Alcohol advertising to recover from 2020 decline by 2023

    Alcohol advertising shrank nearly twice as fast as the overall ad market in 2020, falling by 11.6per cent compared to 6.4per cent of the market as a whole, Brand finances were squeezed by reductions in consumption volume, the average price per drink, and profit margins. With bars, pubs, and restaurants closed, consumers drank less alcohol and bought the drinks they did consume from shops where they cost less, with a much lower mark-up. Brands cut back their marketing sharply to protect their bottom lines, and their combined ad spend fell from $7.6bn in 2019 to $6.7bn in 2020.

    Brands are now bringing money back into the market as vaccine programmes have consumers socialising in person again, and the hospitality industry has begun to reopen. But the return to normality will be slow, and alcohol ad spend will still be 8per cent below the 2019 level by the end of 2021, at $7.0bn. Zenith does not expect alcohol advertising to exceed the pre-pandemic peak until 2023 when it will reach $7.7bn.

    “The alcohol industry has suffered more from the pandemic than most, and that was reflected in the steep drop in ad-spend last year,” said Jonathan Barnard, Head of Forecasting, Zenith. “The recovery won’t be as dramatic as the downturn, but investment in digital communication will drive steady growth in alcohol advertising for the next few years.”

  • Telecoms’ ad spend to return to 2019 levels of spending in 2022: Zenith

    Telecoms’ ad spend to return to 2019 levels of spending in 2022: Zenith

    New Delhi: Telecom advertising will grow at an average rate of 4.5 per cent a year till 2023, as the sector recovers from an 8.7 per cent decline it suffered in the pandemic-ravaged 2020, according to Zenith’s Business Intelligence – Telecommunications report published on Monday.

    The agency predicts that as spend by telecom companies in the 12 key global markets, including India, will rise from $17.8 billion in 2020 to $18.7 billion in 2021, and then return to its pre-pandemic level of $19.5 billion in 2022.

    Smartphone sales will start to spring back this year once consumers feel more confident in their future. Consumers are becoming more willing to finance and purchase handsets independently from their network providers, giving manufacturers and retailers a greater incentive to advertise handsets themselves. Meanwhile, the networks will seek to recoup their investment in 5G licences and infrastructure through new services and more expensive data packages. According to Zenith, all these trends will help fuel healthy growth in telecoms advertising over the next three years. It predicted that telecoms adspend will grow 4.7 per cent in 2021, 4.4 per cent in 2022 and 4.3 per cent in 2023.

    Traditionally, telecoms brands are known to spend more on television and radio advertising than the average brand – in 2020 they spent 42 per cent of their budgets on television and radio, while the average brand spent was 30 per cent. Their ad spend in digital is relatively less than average. In 2020, 49 per cent of their budgets went to digital channels, compared to 56 per cent for the average advertiser, but digital advertising is also the only channel in which telecoms adspend is increasing.

    However, Zenith's estimates show that as audiences migrate online, telecoms companies will be refocusing on communicating their brand narratives to mass digital audiences and, by 2023, digital advertising will account for 54 per cent of all telecoms advertising. As per the forecast, telecoms brands will increase their digital adspend at an average rate of five per cent a year between 2019 and 2023.

    "Telecoms companies have been the unsung heroes of the pandemic, shifting our lives online and keeping us connected to entertainment, work and commerce. Their challenge is to go from being unsung to being acknowledged and appreciated for their efforts. The spread of 5G and the reality of our new-found virtual lives give telecom brands the opportunity to move into the limelight,” said Zenith global chief strategy officer Ben Lukawski.

    The analysis also showed that telecoms brands are cutting back their spending on traditional television and radio as their reach declines, but less rapidly than brands in most other categories. Zenith forecasts that between 2019 and 2023, telecoms brands will reduce their television adspend by an average of 2.0 per cent a year, compared to a 3.5 per cent annual reduction across all categories. They will also reduce their radio adspend by 2.8 per cent a year, compared to 4.1 per cent a year for the market as a whole.

    It also predicts that India will be the fastest-growing market for telecoms advertising between 2020 and 2023 by some distance, with 11 per cent annual growth. According to eMarketer, only 31 per cent of the population currently has a smartphone, but this proportion is rising rapidly due to  launch of low-price handsets such as the JioPhone.

    “The telecom sector in India in 2021 is anticipating a robust growth on the basis of an increase in tariff pricing, demand for data, growing number of mobile users and hopefully the launch of 5G in the last quarter. This will lead to a substantial increase in media investments by the key players especially on television and digital,” said Zenith India COO Jai Lala.

    Russia is another market with relatively low but fast-growing smartphone penetration, and here telecoms adspend is forecast to rise rapidly too, by eight per cent a year. Most of the other markets  in this report except for France are forecast to grow by between three per cent and six per cent a year to 2023.

    “The rollout of 5G services will allow mobile operators to supply bundled voice, data and entertainment services to the home and compete directly with landline broadband,” said Zenith head of forecast Jonathan Barnard. “This will spur greater competition to put together the most attractive services at the best prices and help stimulate a sustained recovery in telecoms ad spend to at least 2023.”

    The report covered 12 markets – Australia, Canada, China, France, Germany, India, Italy, Russia, Spain, Switzerland, the UK and the US, which between them account for 73 per cent of total global ad spend.

  • Video brands’ India ad spends to rise 19% by 2022: Zenith Report

    Video brands’ India ad spends to rise 19% by 2022: Zenith Report

    KOLKATA: There is no denying that the advertising market has been in the doldrums for most of the year, owing to the Covid2019 pandemic. However, video entertainment ad spends are projected to shrink just 0.2 per cent in 2020 across ten key markets, according to the recent Zenith Business Intelligence – Video Entertainment report.

    Video entertainment advertising will far outperform the ad market as a whole, which will drop by 8.7 per cent across these same markets. Moreover, India and Spain will be top of the table when it comes to ad-ex growth through 2022.

    The report concluded that the resilience of video entertainment ad spend in the face of a global pandemic and subsequent recession is the result of increased demand from consumers, increased supply of content, and intense competition among video brands for viewers.

    Faced with spending much more time at home, consumers have turned to video content to keep themselves informed and entertained. In France, for example, TV viewing time was 30 per cent higher year-on-year in April and was still 11 per cent higher in August.

    Investment in advertising by online video brands has far outpaced traditional television recently. In the US, online video brands increased their ad budgets by 142 per cent in 2019, while television brands increased their spending by 15 per cent.

    In the UK, ad spend by online video platforms increased by 79 per cent, while ad spend by traditional television grew 34 per cent. In both markets, television broadcasters and pay-TV platforms pushed up spending temporarily in response to their new competition, but this will prove unsustainable in the face of ongoing decline in their revenues, both Covid2019-related and structural.

    In contrast, online video platforms have continued to raise their budgets to exploit the current window of opportunity to build a loyal customer base. Each platform is spending heavily to ensure that they are top of mind while consumers consider which ones to commit to for the long term.

    “Consumers are now faced with a vast and confusing array of programmes and films vying for their attention,” Zenith global managing director Christian Lee said . “Video brands need to cut through this complexity and give consumers entertainment that matches their personal preferences with minimum fuss. Brands that provide compelling experiences and act as more than just repositories of content will be best positioned for growth in the long term.”

    Here are a few highlights from the report:

    Lockdown has made digital even more vital to video brands

    Video entertainment brands spend more on digital advertising, out-of-home and cinema than the average brand. Their reliance on out-of-home and cinema has posed a particular challenge this year, as they have been forced to compensate for lost audiences from empty cities and closed cinemas. This means even more digital spending, which is forecast to rise from 53 per cent of total video entertainment spend in 2019 to 57 per cent in 2020.

    Video entertainment ad spend to exceed 2019 peak by 1.2 per cent in 2022

    While video entertainment is expected to substantially outperform the market in 2020, Zenith forecasts it to underperform over the next two years, with no growth in 2021 and 1.3 per cent growth in 2022. Online video platforms will have less capacity to raise budgets after spending heavily in 2020, and traditional TV broadcasters will be weighed down by shrinking revenues from TV advertising and pay-TV subscriptions. Nevertheless, Zenith expects video entertainment ad spend to be 1.2 per cent higher in 2022 than it was in 2019, while overall advertising will still be 0.6 per cent below its 2019 peak.

    Spain and India to lead growth in video entertainment ad spend

    The stable headline figures for growth hide considerable variation between the 10 markets. In 2022, video entertainment brands are forecast to spend 27 per cent more than in 2019 in Spain, and 19 per cent more in India. Meanwhile, spending is expected to decline by 5 per cent in the US and 7 per cent in Australia over the same period.

    Spain and India both have fast-growing appetites for video-on-demand, especially on smartphones in India. India’s television ad market also enjoys rapid long-term growth – unlike in most Western countries – and should bounce back quickly in 2021.

    The US is the only market where video entertainment ad spend is expected to continue to decline after 2020, as rising online revenues fail to compensate for the ongoing declines in TV advertising and pay-TV subscriptions, reducing available ad budgets. The video industry is healthier in Australia, but here the ad market as a whole is retrenching after the sudden halt to Australia’s 29 years of unbroken economic growth, so video brands can maintain a share of voice without raising budgets.