TV still attracts over two-thirds of advertising investment within the soft drinks sector, while a similar share is seen in the food category — both sectors are far less likely to have been disrupted by ecommerce, so the need for high levels of digital adspend to facilitate a path to purchase is reduced.
Across all categories however, ad investment is shifting heavily into internet formats. The pivot to online advertising is particularly stark within financial services and retail, with both sectors having heavily developed digital platforms to serve their customers in recent years.
These are some of the findings from Warc’s ‘Global Advertising Trends – Benchmarking ad investment by product category’.
The key findings for five of the 19 product categories available include:
• Total global adspend in 2018: USD 43.2 bn (+13.0% year-on-year)
• Median revenue ROI for successful campaigns: 2.93
• Media spend: Internet USD 19.7 bn (+24.4% year-on-year). TV USD 12.9 bn (+4.0%). Radio USD 3.7 bn (+5.1%). Other USD 7 bn (+6.7%)
• Ad/sales ratios: Financial services (3.6%). Banks, credit, loans (6.7%). Insurance (0.8%). Investment (1.5%).
Close to half of the USD 43.2 bn financial services brands invested in advertising last year was directed towards internet formats. The data show a dramatic shift to digital over the last five years; internet’s share of sector spend has grown 22.0 percentage points (pp) since 2013, to 45.5 percent last year. This is just above internet’s share of global adspend (44.1%). As a share of sales revenue, the sector spends 3.6 percent on advertising, rising to 6.7 percent among banks.
• Total global adspend in 2018: USD 25.3bn (+1.4% year-on-year)
• Median revenue ROI for successful campaigns: 2.93
• Media Spend: TV USD 16.5 bn (+1.0% year-on-year). Internet USD 3.7 bn (+7.9%). Print USD 2.8 bn (-12.7%). Other USD 2.3 bn (+15.3%)
• Ad/sales Ratios: Food (2.6%). Confectionery (5.6%). Dairy (0.6%). Meat, fish, poultry (0.7%).
Almost two-thirds of the USD 25.3 bn in ad investment within the food category last year was spent on TV, nearly double TV’s global share of 33.3 percent. TV spend in the sector rose 1.0 percent year-on-year to USD 16.5 bn in 2018 but has dipped by 3.7 percent each year since 2013 on a compound basis. Print also accounts for a greater share of food adspend than is the case globally, with newspapers’ (-2.6pp) and magazines’ (-2.1pp) share dipping mildly over the last five years.
• Total global adspend in 2018: USD 62.3 bn (+0.0% year-on-year)
• Median revenue ROI for successful campaigns: 4.40
• Media Spend: Internet USD 21.5 bn (+9.1% year-on-year). TV USD 20.3 bn (-0.6%). Print USD 9.6 bn (-15.5%). Other USD 10.9 bn (+0.8%)
• Ad/sales ratios: Retail 2.3 percent. Clothing & fashion (2.9%). Restaurants (2.0%). Supermarkets (1.2%).
Global advertising spend in the retail sector was flat in 2018 at USD 62.3 bn. The USD 1.8 bn in extra internet spend (up 9.1% from 2017) was offset by a decline in spend for all other media bar out of home (+12.7%) and cinema (+4.9%). Ad investment among the retail sector has tracked downwards in recent years, recording a compound annual growth rate of -1.8 percent since 2013. However, online advertising has become far more valuable to the sector during this time.
• Total global adspend in 2018: USD 15.1 bn (+1.1% year-on-year)
• Median revenue ROI for successful campaigns: 2.84
• Media Spend: TV USD 10.5 bn (+1.1% year-on-year). Internet USD 1.9 bn (+28.3%). OOH USD 1.3 bn (-24.1%). Other USD 1.4 bn (+1.3%)
• Ad/Sales ratios: Soft drinks (5.9%). Bottled water (5.9%). Carbonated (5.9%).
At 70.0 percent, TV’s share of soft drinks brands’ adspend is higher than all other categories studied for the report. The USD 10.5 bn spent on TV ads in 2018 was up 1.1 percent from 2017 and has grown at a compound rate of 2.0 percent each year since 2013 – bucking the global trend. However, investment in other media — chiefly internet — has eroded TV’s share of sector spend by 4.4pp over the five years to 2018. Internet formats still draw a relatively small amount of investment, at 12.8 percent; this is almost three times less than the global level and is likely a reflection of how little ecommerce has disrupted the sector.
Toiletries & Cosmetics
• Total global adspend in 2018: USD 25.7 bn (-3.6% year-on-year)
• Median revenue ROI for successful campaigns: 2.06
• Media Spend: TV USD 14.9 bn (-3.9% year-on-year). Internet USD 5.6 bn (+9.7%). Print USD 2.9 bn (-12.0%). Other USD 2.3 bn (-15.9%)
• Ad/sales ratios: Toiletries & Cosmetics (16.9%). Bath toiletries & soaps (12.3%). Fragrances (21.5%).
At a top line level, ad investment within the toiletries and cosmetics sector has dipped 4.1 percent each year since 2013 on a compound basis, to a total of USD 25.7 bn last year. This is largely due to how this spend has been allocated historically: in 2013, TV accounted for two-thirds of adspend while print drew a further fifth.
Both of these media have recorded declining spend over the period, with internet (+10.7pp) and out of home (+4.7pp) gaining most in share but from a low base —depressing total investment growth in recent years. Print still accounts for 11.4% of sector spend, with magazines alone worth over USD 2 bn, but this total has more than halved since 2013.
“In a multichannel world, it has become harder than ever to track campaign performance, measure ROI, or to even trust third-party data. Additionally, the problem is compounded by an environment of ad blocking, fraud, and consumer distrust, and is hazed by walled gardens, programmatic stacks and opaque practice. This results in millions of ad dollars wasted each year,” explained James McDonald, Managing Editor, Warc Data, and author of the research.
He explained it is still essential that ad investment works harder in the media mix to obtain optimal reach and effectiveness. “As such, our latest research into product category insights provides vital data to help brand owners, agencies and media strategists and planners inform their decision making,” he added.