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Advertiser spend on TV and social media is twice as high as daily consumption
Advertiser spend on TV and social media is twice as high as daily consumption
For the first time, social now attracts more investment from advertisers than linear TV, a new WARC Global Advertising Trends report reveals, but both media attract a disproportionate share of advertising budgets when one considers the time the average consumer spends with these channels each day.
WARC Global Advertising Trends: The Investment Gap
- Social media is forecast to account for 39.1% of 2022 adspend but has a 21.4% share of daily media consumption; the equivalent figures for linear TV are 31.5% and 16.1%.
- Social media spend would need to reduce by $94.3bn in order to mirror global consumption levels next year, while the investment gap is $86.9bn for linear TV.
- The largest gaps between social consumption and adspend can be found in China (where advertiser spend is 3.3x consumption), the UK (2.2x) and the US (2.0x).
- Conversely, in Australia (0.9x), India (0.4x) and Russia (0.5x), social’s share of daily media consumption is higher than its share of advertising budgets – a potential indicator of opportunity for brands.
- While linear TV spend is inflated in relation to its consumption, online video is now close to parity after years of underinvestment.
Undervalued media
- Podcasts are found to be undervalued by $40bn, with the greatest opportunities for advertisers among audiences aged 16–24, middle earners, and those educated until the age of 16.
- Advertisers would need to spend $58.0bn on online press ads globally next year to achieve parity with consumption levels. Instead, forecast spend is just $12.8bn.
WARC’s Global Ad Trends: The Investment Gap is based on WARC analysis of advertising spend forecasts for 100 markets worldwide, combined with the results of a survey by GWI of more than 715,000 consumers. A sample report is available for all. WARC Data subscribers can read the report in full.
Hybrid viewing is the European norm
Hybrid viewing is the European norm
CTV adoption among European households has increased by 30% from 2020, meaning four in five households can now be reached by CTV, a new study reveals.
Why it matters
With more than three quarters of European audiences watching CTV, this channel is now an essential element of TV planning for advertisers, the more so since CTV yields greater results than social media or traditional TV when it comes to engagement.
The UK angle
The report (CTV is for Everyone: 2021) from sell-side advertising platform Magnite reveals that:
- Two thirds (65%) of British CTV viewers pay more attention to an ad on CTV than when an ad is seen on social media (22%).
- British CTV viewers are 54% more likely to share personal information to receive relevant advertising, while 57% think it is important that brands align with their values and opinions.
- British parents are easier to reach with CTV, especially households with teens: 45% of households with teens watch mostly streamed content.
- CTV reaches diverse audiences including purchase decision-makers (68%), gamers (89%, of which 28% watch CTV only), light TV viewers (65%) and those born outside of the UK (69%).
Sourced from Magnite
Younger marketers need seniors’ help to sharpen skills: report
Younger marketers need seniors’ help to sharpen skills: report
Senior marketers need to do more to help junior-mid-level marketers hone their skills, according to research by the Association for Data-driven Marketing and Advertising (ADMA).
Why it matters
Skills that are shared more in relation to knowledge are planning, goal setting and strategy, while the skills that are less shared but with the same knowledge score are critical thinking, curiosity, opportunity, insight, learnings, communications strategy and campaign plan and tests.
Key insights
- The research, reported by Mumbrella, found senior marketers lack the most in data planning, marketing technology and data management.
- Mid-junior level marketers are more adept than the senior-executive level at strategy and execution.
- The research, which included 136 marketing practitioners in Australia, also surveyed knowledge in discovery and planning.
Quote
“This gap is not the case for businesses that are e-commerce natives but more for those businesses that are coming from traditional disciplines who have had to quickly pivot and adapt to a new consumer expectation in a shifting, evolving and predominantly online environment” – ADMA Marketing Skills Assessment research report.
Sourced from Mumbrella
Deloitte: CMOs spot growth potential in purpose
Deloitte: CMOs spot growth potential in purpose
Purpose helps the top brands grow if they believe it should run through the entire company, and guide decision-making across the whole organisation, according to Deloitte’s marketing trends for 2022.
The findings
A key part of Deloitte’s Global Marketing Trends Report focusses on the behaviour of high-growth brands (growing at more than 10% each year).
These brands are found to be much more likely to have committed to an integrated purpose. However, in Deloitte’s definition, this requires those brands to “put a premium on accountability and establish key performance metrics anchored around their purpose.”
- High growth brands tend to enact their purpose more holistically than their lower-growth peers.
- For these brands, purpose doesn’t just feed into product and service delivery.
- High-growth brands are 66% more likely to use their purpose to help guide employee decision making than low-growth brands and are 41% more likely to use it to drive the CSR investment agenda.
Methodology
The recommendations are based on a combination of:
- a poll of 1099 C-suite executives from global companies operating across the US, UK, France, Japan and the Netherlands
- A global consumer survey of 11,500 participants across 19 countries across the Americas, EMEA and Asia.
- In-depth interviews with 18 C-suite executives.
Sourced from Deloitte
The positive impact of showcasing black stories in advertising
The positive impact of showcasing black stories in advertising
Advertising that features black characters and positive, joyful black culture creates a very large uplift in effectiveness, according to new ad testing conducted by System1 to mark Black History Month in the UK.
Why it matters
When people see their life or culture represented on screen, it resonates more powerfully and emotionally. The research (part of the Feeling Seen report series) also demonstrates that, to a point, advertising that strongly appeals to a minority group will usually appeal to the general population, proving there’s no downside to making inclusive work.
Some considerations
System1 looked at six examples of black representation in advertising and concluded that all ads saw a large uplift in effectiveness (as measured by its Star Ratings and Spike Ratings) when tested with a black British sample. But it also observed that there may be a point at which diverse advertising stops uniting audiences and offered some suggestions as to why that could be:
- While advertisers have long used black music, this has often been music released two or more decades before, rich in association and recall. Ads with, for example, a modern RNB or grime soundtrack may not resonate as effectively with the general audience.
- The testing indicated that black audiences regularly notice more right-brained elements – especially hummable tunes and familiar locations – and are more likely to pick emotional rather than functional key associations. So advertisers should emphasise elements, such as characters and stories unfolding, which aren’t so culturally determined and which may then have the same impact on general audiences.
- Creating work with generally broad appeal is more effective than creating work that targets smaller populations. (Different audiences don’t necessarily need different advertising – they just need to feel seen within varied elements of the advertising.) So advertisers are better making minor creative shifts rather than entirely new work, to avoid losing reach or resonance.
Sourced from System1 [Image: Levi Roots]
Global vs local: managing brands in a world of uncertainty
Global and local brands need to measure the level of ‘incidental uncertainty’ felt by their target customers and adjust their brand strategies accordingly, say Nanyang Technological University’s Boon C Lim and Sharon Ng.
Why it matters
In a state of uncertainty like the current pandemic, consumers’ preference for a global or local brand may be reversed, but there are ways for both global and local brands to maintain a preference for their brands during such a period.
Takeaways
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How Behavioural Science can make new health behaviours more sticky
It can be difficult for patients to adhere to treatment, but behavioural science can help, through the simple intervention of making a plan. Also known as an implementation intention, this helps patients work to specific guidelines concerning performing certain behaviours.
Why it matters
Non-adherence to medication and health-related lifestyle changes have a detrimental impact on patients and on the healthcare system. For example, only 50% of type 2 diabetes patients adhere, costing an estimated $300 billion annually in the US alone.
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Reaching Southeast Asia’s new digital audience
Reaching Southeast Asia’s new digital audience
Digital penetration during the pandemic has increased by 15% or more across Southeast Asian markets, thus adding a whole new audience to an already fragmented landscape.
Why it matters
While the detail varies in each market, ad budgets are increasingly allocated to digital channels such as search, social and video, and, says Nielsen, influencers are a fast-growing touchpoint.
Key stats
- Philippines: internet usage stands at 87% (Q2 2021) up from 70% (Q2 2019), smart TV usage at 17%, up from 7%, video on demand viewing at 27%, up from 6%.
- Thailand: internet penetration increased 15% during the pandemic, with increased uptake among the rural population and older consumers.
- Instagram claims two thirds of the total number of influencers within the region; within that figure, Indonesia has the highest number of influencers with over 7 million personality profiles.
Key quote
“Where influencers are really fitting in is how they are able to deliver and reach the specific audiences they are engaged with. Brand recall for influencer content is 4x up versus traditional digital content” – Nicholas Bruce, Head of Consulting and Research for Asia at Nielsen.
Sourced from Nielsen
Winning India’s festive shopper : digital readiness and personalisation
To win Indian consumers this festive season, digital readiness is essential in a post-pandemic world; panelists at a recent InMobi event explained why.
Why it matters
To prepare for the important festive shopping season, brands can build digital capabilities by pursuing strategic industry partnerships, driving personalisation at scale, tapping consumers’ passion points to deliver gratification, and leveraging technology to deploy scalable brand solutions.
Takeaways
This content is for subscribers only.
Sign in or book a demo to continue reading. WARC’s unbiased, evidence-based insights that save you time and help you make marketing choices that work.
TV and social advertising inflated compared to consumption
TV and social advertising inflated compared to consumption
Advertising spend on TV and social media is highly inflated in relation to daily consumption worldwide, according to WARC Data's latest Global Ad Trends report. The analysis compares WARC Data's new quarterly advertising spend figures with GWI's survey of more than 700,000 consumers.
Why it matters
The purpose of the report is to assist clients in identifying the discrepancies between daily media consumption and advertiser spend, in order to better recognise opportunities for optimisation.
It also finds global social media advertising spend is now larger than linear TV investment while podcasts are being potentially undervalued by as much as $40bn.
Takeaways
- Spend on TV and social media is highly inflated in relation to daily consumption.
- Conversely, audio formats and online press appear to be heavily undervalued by advertisers.
A sample of the report is available here and WARC Data subscribers can read it in full here.
Sourced from WARC Data, GWI
Mindful self-disruption: how to work like China’s tech giants
Mindful self-disruption: how to work like China’s tech giants
Titans like Alibaba and ByteDance experiment constantly with their core products, a new analysis argues, with innovation at the centre of strategy rather than a set of initiatives at the fringes of a company – then, having created something new, the trick is to stimulate both demand and supply.
Analysis
“The most interesting thing about Chinese tech startups isn’t necessarily how innovative they are, but how willing they are to shake up their best, most core assets and disrupt themselves,” writes analyst Rui Ma in a piece for the venture capital firm Andreessen Horowitz’s in-house magazine, Future.
Specifically, Ma explores the strengths of companies that lead in the areas that China has pioneered, notably live e-commerce and short video.
Alibaba
Live e-commerce wasn’t an overnight success. Alibaba spotted that growth was increasingly coming from commerce linked with content. So it pushed aggressively into the space, training potential streamers and setting up events like Singles Day to drum up interest, incentivising sellers and dedicating media dollars and prime app position.
TikTok
Known as Douyin in China, TikTok wasn’t ByteDance’s original bread and butter. First came the news aggregator Toutiao, which bet big on video and even bigger on data prices falling. Like Alibaba, its new idea required focus and money, bringing on board big names both to grow demand and spur supply.
Competition is a key
Partly, the reason for Chinese tech’s speed is competition: “The domestic market is incredibly competitive and international markets have thus far been pretty inaccessible. Chinese companies fight over every market opportunity,” writes Ma.
But they also tend to develop differently from large western companies. Rather than slowing down with size, they speed up and make more changes.
Sourced from Future
Not investing enough in news brands could have negative results
Not investing enough in news brands could have negative results
Increasing investment in news brands versus other channels delivers the greatest gains to the bottom line, according to research from Newsworks.
Why it matters
News brands work effectively alongside other media, but can work harder. That is demonstrated in Newsworks’ figures showing that increasing investment from low levels boosted campaign PROI by 60% for print news brands and 62% for digital news brands. The latter figure is in stark contrast to general online display – what Newsworks’ Denise Turner calls “the run of the internet” – where boosting investment actually reduces PROI by 23%.
Takeaways
- Over the last three years, brands have enjoyed a 10% profit boost by investing in news brands: £268m between 2017-2020 has the potential to become £1bn by 2025.
- In terms of broad categories that can benefit, the research highlights Leisure & Pleasure (including supermarkets), Shiny New Things (non-grocery retail) and Grown-up Stuff (finance and motors).
Key quote
“There’s a certain proportion of investments that should go into news brands to deliver optimum profit to the bottom line. It’s not profit that comes back from news brands, it’s profit to the whole bottom line from advertising investment” – Denise Turner, Director of Research and Insight, Newsworks, speaking at the Festival of Marketing.
Newsworks’ research is based on a decade (2011-2020) of effectiveness data and a meta analysis of 1012 econometric models. The trade organisation has also devised a profit calculator to enable advertisers to see how to optimise spend in news brands across specific categories and increase their campaign profit return.
Sourced from Newsworks
PayPal moves for Pinterest, hinting at ‘super app’ ambition
PayPal moves for Pinterest, hinting at ‘super app’ ambition
Payments firm PayPal has made an offer of $45 billion for the inspiration-focused social media and shopping site Pinterest – one of the largest consumer tech deals ever, should it go through – with its eyes on a combination of social media, financial services, and commerce.
Why it matters
Two reasons: It’s literally a big deal. The closest in consumer tech was Salesforce’s acquisition of Slack for $27.7 billion in 2020.
The second, and more important, is what the potential acquisition, first reported by Bloomberg, says about the capabilities that PayPal is looking for. Following acquisitions of the deal-finding service Honey in 2019, and Japanese buy-now-pay-later platform Paidy last month, the company has amassed an arsenal of financial services.
But Pinterest is of a different magnitude, planting a flag in a new category and among a serious user base of 459 million MAUs, an influential marketing touchpoint, and a blossoming commerce business.
Super app
Western tech firms have long coveted the suites of services offered by ‘super apps’ like Tencent’s WeChat in China. Back in July, PayPal CEO Dan Schulman sketched the plan to the FT as combining messaging, savings, payments and money transfer, shopping and even crypto.
The tough part, however, is not in giving people services but in getting people to engage with and use the app regularly – PayPal will be hoping a sticky service like Pinterest will provide just that. This would be no simple audience purchase; moving people across from users of a mood board, even if they buy from it, and into a financial platform is a major task.
Sourced from Bloomberg, Financial Times, TechCrunch, PayPal [Image: Pinterest]
Marketing budget growth at strongest in over four years
Marketing budget growth at strongest in over four years
Total UK marketing budgets have increased at the strongest rate since Q2 2017, according to the Q3 IPA Bellwether Report, as an effective vaccine program and the loosening of pandemic-related restrictions enable pent-up consumer demand to find expression.
Key findings
- A net balance of +12.8% of firms registered upward budget revisions in Q3 2021, from +6.0% in Q2 (the first time in three years that successive quarters of growth in overall marketing spend has been registered).
- Main media advertising was the best-performing marketing category in the third quarter, with a net balance of +8.6% of firms recording upward budget revisions (from +1.3%), as more firms upped their spending on 'big-ticket' campaigns.
- Within main media, video (+12.6%, from +4.2%) was the main driver, followed by other online (+10.6%, from +11.0%) and audio (+6.0%, from +1.1%).
- Adspend is predicted to grow 6.6% in 2021 and 6.2% in 2022 before normalising from 2023 onwards.
A note of caution
While upward revisions to total marketing budgets were strong, they fell short of the growth firms initially had predicted for the 2021/22 financial year, when a net balance of +17.4% of firms anticipated expansion. There remain concerns around the trajectory of virus cases as we head into the winter period, while ongoing supply chain disruptions are also affecting the ability of some firms to carry out marketing campaigns.
Key quote
“We hope this is just the beginning, and businesses continue with their aggressive growth plans to keep momentum moving as the post-lockdown growth boom peters out” – Joe Hayes, senior economist at IHS Markit and author of the Bellwether Report.
Sourced from IPA
Nestlé India sees small-town growth
Reporting double digit growth for the September quarter, Nestlé India highlighted the food company’s performance beyond the country’s metros and signalled a greater focus on small towns in the coming months.
Why it matters
As the pandemic eases and vaccine coverage grows, the company is seeing growth across all food and beverage categories. But with packaging and transport costs increasing, expanding further into rural markets likely will mean sacrificing margin for market share.
Takeaways
- While e-commerce continues to grow, out-of-home channels are showing signs of a return to pre-pandemic levels in some areas.
- Coffee and chocolate were the fastest-growing categories in the organised trade channel.
Key quote
“We are firmly on a journey to accelerate [small town growth] further by using a healthy mix of a customised portfolio, enhanced distribution infrastructure and deployment of resources, localised communication, enhanced visibility and building consumer connect” – Nestlé statement.
CMO and CIO collaboration key to business growth: report
CMO and CIO collaboration key to business growth: report
The chief marketing officer and the chief information officer are two roles that ought to collaborate more. focusing on hybrid customer experience to grow their business, says a new Forrester report.
Why it matters
The pandemic has changed the CMO/CIO partnership, notes The CMO and CIO Partnership in Digital Transformation report. It is forcing marketing and IT to work more closely to achieve customer success while producing new opportunities for CMOs and CIOs to align their teams to accelerate digital transformation, especially around hybrid commerce.
Key insights
- A strong partnership between marketing and technology is necessary, and while examples of great collaboration have been scarce, the pandemic closed the gap, with a third of B2C marketers saying in 2021 that CMOs and CIOs are strategic partners.
- The percentage who consider that marketing requests are a low priority for IT dropped from 23% in 2020 to 12% in 2021.
- Despite strong e-commerce growth, CMOs and CIOs need to focus on hybrid commerce to ignite their collaboration.
- CMO and CIO have to rethink the martech ecosystem to stay ahead of data deprecation – a good opportunity to collaborate.
- CMOs, CIOs may have different goals (eg brand perception vs platform security) but it is critical to co-own business KPIs.
Quote
“For years, IT was the one thing that kept me awake at night but now that we have elevated the CIO role at the executive committee level in all our markets, we have started working closely together and I have committed to help my peers by reducing our complex product and tariff portfolio” – Nikos Vlachopoulos, Global CMO, Vodafone.
Sourced from Forrester
Netflix ramps up subscriber growth, adding 4.4m in Q3 2021
Netflix ramps up subscriber growth, adding 4.4m in Q3 2021
Netflix's slowdown in growth in the first half of 2021 looks set to be reversed in the second half of the year, according to the latest company reports.
Why it matters
Additional data show that audiences use an average of five video streaming services, putting pressure on Netflix to continue its market leadership. As video streaming becomes more competitive, focusing on new audience groups will become more important. For Netflix, this includes older audiences, a segment that it currently lags behind in.
Takeaways
- Netflix added 4.4m paid streaming subscriptions in Q3 2021, more than twice as many as it added in the second quarter.
- The company also expects to add a further 8.5m subscribers in the final three months of the year, taking the total to a forecast 222.1m.
WARC Data Premium clients can access the latest data on Netflix's performance here. If you do not currently have access, register your interest to find out more.
Sourced from Netflix, WARC Data
Streaming is about time spent: Netflix and YouTube are dominating
Streaming is about time spent: Netflix and YouTube are dominating
Despite strong subscriber competition from established firms like Disney, new research suggests that Netflix and YouTube continue to dominate people’s attention with a 47% share of time spent watching, according to technology, media and telecommunications research firm Lightshed.
Why it matters
What’s interesting about LightShed’s new research is how Netflix and YouTube’s time spent is exceptionally strong even as new competitors from established TV giants, like Disney and subsidiary Hulu, have grown subscribers by around 50%. “The clear implication is that time spent per household subscriber fell meaningfully for both services,” says LightShed.
Of course, it’s not a totally fair comparison as YouTube is free to air, though it does reinforce its status as a good destination for ad dollars.
But the research firm suggests that both Alphabet’s streamer and Netflix have cracked the important aspects of streaming which is capturing more time spent through a wide breadth of content. Engagement is fundamental to a robust subscription service over the medium- to long-term. For Disney, high subscriptions with low engagement could spell very real problems when it must inevitably raise prices.
The research
- Based on a combination of Comscore figures and LightShed research estimates, the new study compares share of viewing hours between January of 2020 and June 2021.
- It applies an extraordinarily wide definition to connected TV as the amount of subscriber time spent on a service via smart TV, streaming device, mobile, tablet, or PC.
- Netflix and YouTube continue to dominate with 26% share for Netflix with a subscriber increase of just 9%, and YouTube taking 21% of people’s viewing time.
- The core comparison is to Disney+ which despite 55% subscription growth in those 18 months has seen share of time decline from 5% to 4%.
- Hulu, which also saw strong subscriber growth at 41% has seen time share decline three percentage points to reach 13%.
The background
Netflix is in an extremely strong run of form with the barnstorming global success of improbable hit Squid Game, and with subscriber growth ahead of Wall Street forecasts in this week’s third quarter results.
But, as Netflix CEO Reed Hastings told investors, the company is aiming for a bigger prize: “[A] company like Disney is still ahead of us in some of those dimensions of putting that whole experience together, but boy, are we making progress. And so exciting over the next three to five years, [to be] closing that gap and hope to pass them on that spectacular all-around experience.”
Sourced from LightShed, FT, Motley Fool. [Image: LightShed]
Audiences use an average of five video streaming services
Audiences use an average of five video streaming services
Audiences use an average of five video streaming services and this number is steadily increasing, according to the latest data from media analysts Omdia.
Why it matters
Video streaming is getting more competitive as new services launch and more content is being distributed. While audiences are steadily using more, services may need to start focusing on new audience segments, like older consumers, to continue their growth.
Consumers using more video services also adds complexity to the challenge of measuring audience behaviour, particularly as audiences are also watching on more devices.
Takeaways
- Across the seven markets surveyed, online video audiences use an average of 4.82 advertising video-on-demand (AVOD) and subscription video-on-demand (SVOD) services, up from 4.54 last year.
- Usage is highest in the United States, at 7.06, but this has fallen for the first time.
Sourced from Omdia, WARC Data
Self-care and the grocery run: What CPG brands in SEA should take note of
Amid the pandemic, Twitter’s Martyn U’ren says self-care is emerging as a key trend in Twitter conversations throughout Southeast Asia and influencing daily purchases.
Why it matters
In these uncertain times, retrospectively reacting to trends is no longer enough and to keep the finger on the pulse, brands have to go to the grassroots and engage with their communities in real time to understand where sentiment is moving, and how to best support their consumers.
Takeaways
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