These are nervous times for brands and advertisers. Having successfully weathered two years of a global pandemic and hopefully heading into 2022, they are now being confronted at every turn by rampant inflation, global geopolitical uncertainties, supply chain shortages and, to top it all, declining consumer sentiment. .
In January, most marketing and advertising budgets were expected to increase this year as many economies began to adopt some way of living with Covid strategies as consumers started spending money again.
Mindful of the fact that they may have underinvested during 2020 and 2021 due to multiple lockdowns in different markets, many of the big consumer-facing global brand owners have committed to increasing their marketing spend in 2022.
In the case of the two leaders in the global marketing industry – P&G and Unilever, the former announced in its Q1 2022 results that it was increasing its marketing spend by 30% or $130 million (€124 million) by restoring it. to pre-pandemic levels.
As a percentage of overall sales, this is down 80 basis points, but P&G has been successfully managing its marketing spend in areas such as performance-related marketing and digital ad spend in recent years. This ensured that he was getting a much better return on his marketing investments.
With well-known family brands such as Olay, Gillette and Pantene in its stable, P&G is also the biggest marketing investor with annual spend in excess of €10.5 billion a year.
Elsewhere, Unilever, the second-biggest marketing investor, entered 2022 with a marketing budget of €7 billion, which increased by €122 million in pre-pandemic 2019.
But other global giants with consumer-facing brands in their stables have also increased their marketing spend for 2022 and this is also evident in their Q1 results as well as those of the global ad agency giants.
Earlier this week, the largest agency group, WPP, raised its annual revenue forecast after strong performance from its media investment business, Grupo M, drove 9.5% growth in revenue to £2. .6 billion in the first quarter. For the full year, the group is now targeting revenue growth from 5.5% to 6.5%.
Speaking to UK media this week, Group CEO Mark Read said the company is “aware of economic risks and our guidance takes into account the economic outlook. As things stand, we haven’t seen huge reductions in spending from our customers.
“We see some pros and cons here and there, but they tend to cancel each other out.”
Meanwhile, Omnicom, another global chain, said it raised its annual forecast to 6.5%, while Publicis took 5% because there was “too much uncertainty”.
While some element of inflation has already been factored into the 2022 budgets, it’s probably fair to say that most companies and their brands have underestimated their scale.
With a global energy crisis and a protracted war in Ukraine looking more and more likely with each passing day, it is already hard-pressed consumers who will feel it the most.
Brands will not only need to remain calm, but also respond in some way to some of the pressures consumers are feeling.
Historically, large retail groups have always been good at this.
In the last recession, they all had agreements to end the recession. Fast forward to 2022 and many of them are offering offers that beat inflation. Lidl’s offer to feed a family of four for less than €74 a week is a perfect example of this.
In the marketing world, when things get this tough, the default reaction has always been to reduce your marketing costs.
While there is plenty of empirical evidence to suggest this is the wrong strategy, arriving so soon after the global pandemic makes it all the more dangerous as several years of underinvestment in a row will be a death blow to most brands.
Above all, however, now is the time for marketing to really connect with consumers to help them find solutions to their problems – whether that’s a deal on their energy bill or another bill, a special offer on their purchases or that stay they’ve been putting off for a few years. In other words, brands need to be more in tune with their customers’ needs now more than ever.
Decreased ad complaints
The total number of complaints to the Advertising Standards Authority of Ireland (ASAI) in 2021 decreased by 12% in 2021, according to its annual report published during the week. A total of 1,450 written complaints about 959 advertisements were received by ASAI during the year, with the travel and vacation industry generating the most complaints at 207. Again, digital media continues to generate the most complaints, with 696 or 48pc of all claims .
accentuate the music
Accenture Interactive, which has more than 150 employees in Ireland, has been renamed Accenture Song. Part of the Accenture consulting group – which has its global headquarters in Dublin – the digital services and marketing group is the largest in the world, with estimated revenues of around US$14 billion (€13.3 billion) this year. Accenture has acquired several of the top agencies around the world over the past 10 years, including Irish agency Rothco, which it acquired in 2018 for €35 million.