Brand trust impacted by rising costs
Almost one third (30%) of consumers say rising costs are impacting their trust in brands, with one in five (22%) admitting their loyalty to the brands they usually shop with has declined in recent months.
The survey of 1,000 consumers also reveals one in five have switched supermarkets, energy supplier or mobile provider in the past 12 months.
As well as cost, the survey finds customer service, loyalty programmes and sustainability are major factors impacting how consumers feel about brands.
Three quarters of those surveyed claim they would switch brands for a better loyalty scheme. Close to a third (32%) of those surveyed say good customer service is one of the leading factors influencing their trust in brands. However, less than one in five (18%) state they are happy with the customer service they are receiving from their current provider across the finance/banking, insurance, utilities, telecoms/mobile and retail sectors.
One in 10 also say the sustainability credentials of a brand are a crucial factor in their decision making.
Source: Ello Group
Majority of marketers believe customer data inefficiencies are hindering their work
Marketers believe they have wasted an average of 31% of their budgets, the equivalent of £1.6m, in the last six months due to poor data optimisation.
Three quarters (75%) of UK marketers admit to knowing their team has customer data inefficiencies, which are hindering their marketing efforts, and 61% don’t feel they know how to get the most out of their marketing data.
This lack of confidence in how to use data comes as marketers are increasingly under pressure to deliver results for their business. Some 72% of the 500 senior marketers surveyed believe the cost of living crisis has upped the pressure on them and their team to deliver return on investment or return on ad spend.
The study shows 65% of marketers have had to make cuts to budgets already, and that the same number (65%) are predicting more cuts to come.
Almost three quarters (73%) of marketers say they are changing their strategies in the face of the cost of living crisis.
The research also surveyed 2,000 consumers, with 83% of British consumers suggesting marketing campaigns should be adapted to meet changing needs during the cost of living crisis. Almost two thirds (63%) believe they should be marketed to less altogether.
Source: Treasure Data
UK ad market expected to hit £35bn in 2022
The UK advertising market is set to grow by 9.2% in 2022 to £34.9bn, a downgrade of 1.7 percentage points from the previous forecast in July.
The revision, published in the latest Advertising Association/WARC Expenditure Report, reflects high levels of inflation and squeezed margins amid the cost of living crisis. The media sector is bearing the brunt of these pressures, the report notes, causing advertisers to face higher costs.
UK ad spend rose by 8.8% during the second quarter of 2022 to £8.6bn, while ad spend during the first half of the year was up 14.4% at £16.7bn.
The UK’s ad market is forecast to grow by a further 3.9% in 2023 to £36.2bn, a downgrade of 0.5 percentage points on the July forecast.
Online advertising’s share of total ad spend is set to grow by 74% in 2022, according to the AA/WARC figures.
The data suggests a “strong” post-pandemic recovery in out-of-home (up 46.4%) and cinema (up 2,208.2%). The report notes IAB figures showing online classified advertising – representing the likes of recruitment advertising and property listings – rose by almost a third during the second quarter.
TV was the only medium to witness a decline in investment, down 0.6%, although broadcaster video-on-demand continued to grow, up 9.3%, as audiences turned to catch-up and streaming platforms.
Positive second quarter results were also recorded across the publishing sector, including national news brands (up 9.1%), magazine brands (up 3.3%), and regional news brands (up 0.6%).
According to the report, ad spend for the final quarter of 2022 will be up 4.5% on last year’s record high at £9.5bn, setting a record level of investment during the Christmas period as festive advertising combines with World Cup fever.
Search advertising, including ecommerce, is forecast to become one of the fastest growing media over the fourth quarter, rising by 7.3% to £3.4bn. At £1.7bn, TV advertising spend is expected to remain flat during the quarter, but video-on-demand is set to rise ahead of the wider market with growth of 4.2%.
Source: Advertising Association/WARC
Digital ad market grows 15% in first half of 2022
The UK’s digital ad market grew by 15% year on year in the first six months of 2022 as spend reached £12.52bn, according to the latest IAB Digital Adspend update.
The findings of the report, which is co-authored by PwC, indicate the digital ad market is returning to a rate of growth in line with pre-pandemic levels, when the market expanded 15% in both 2018 and 2019. During the first six months of 2020 ad spend dipped by 5%, only to rebound by 55% in the first half of 2021.
Search continues to drive most digital advertising spend, representing 53% of the total digital ad market. The search sector was worth £6.66bn during the first six months of 2022, up 16% year on year. Display has grown by 8%, with spend on video display increasing by 6% and non-video increasing by 10% year on year.
Mobile continues to attract the majority of all spend (57%) from a device perspective, although spend on non-mobile ads is up 38% year on year. Classified ads also saw strong growth during the first half of 2022, up 42%.
IAB UK chief executive Jon Mew notes digital ad market growth in 2022 has fallen more in line with pre-Covid levels following the “socio-economic turbulence” of the pandemic, which supercharged growth in digital advertising.
While both video and search revenue grew by 80% over the past two years and continue to grow, Mew explains this growth rate could not be sustained in the long term.
“Today’s results indicate that we have returned to a point where growth is strong but more sustainable. Looking to the future, we have Christmas and the World Cup coming up, which will likely see spend peak in 2022, but digital advertising won’t be immune to tightening budgets as the cost of living crisis takes hold,” he adds.
“Continuing to invest in marketing throughout challenging times is well documented and digital has the benefit of offering advertisers a powerful combination of proven results and flexibility.”
Source: IAB and PwC
Older consumers more likely to stick with brands they know during Black Friday
Almost three-quarters (73%) of over-55s say they are likely to prioritise shopping with brands they know and trust during Black Friday and Cyber Monday this year.
This figure is considerably higher than in younger demographics. Just over half (57%) of 16- to 24-year-old consumers agree they will prioritise the brands they know in sales this year. While there are variations, across all age groups, the majority of consumers agree they will be prioritising the brands they know and trust over this period.
However, people are more willing to experiment during Black Friday and Cyber Monday than at other times of the year, according to the study, with 52% of people aged 35 to 44 and 51% of 25- to 34-year-olds agreeing.
It’s also important to consumers that brands maintain a consistent experience online and instore. 72% of consumers say it’s important to them that stores run the same promotions online and instore.