The majority of advertising clients are positive about 2024

In recent months, the associations Leading Swiss Agencies (LSA) and the Swiss Advertising Clients Association (SWA) have once again examined the most important indicators in the communications industry.

To this end, advertising companies were asked about their assessments and prospects for the new year. Although rising prices are depressing consumer sentiment, a good half of the advertising clients surveyed expect their sales to increase in 2024. Around 22% see no change in sales and 19% expect a decline. While 42% of the advertising companies expect higher revenue in 2024, 36% expect no change and 21% expect a decline.

Successful 2023 for advertising clients

In the past year, 90% of the advertising companies were able to record either the same or higher sales. This also led to higher revenue for 49% of respondents. For 58.8% of respondents, turnover increased last year and for 31.5% it remained unchanged. Only 15% of the advertising customers recorded a decline. Revenue remained unchanged for 24.2% of respondents and fell for 26.6%.

Stagnating communication budgets in 2024

While 43% of companies do not intend to make any changes to their communication budget, roughly the same number will increase their budgets (29.1%) as will reduce them (27.7%). The situation is similar for the media budget. Here, half of the respondents (49.6%) expect budgets to remain the same, while around a quarter each see an increase (23.4%) or a decrease (27.0%).

Consistency in the marketing channels

The breakdown of the marketing and communication budget for 2024 shows only a slight shift towards digital channels. Traditional channels remain at around a third (31.9%). Compared to the previous year's survey, investment in the company's own website has increased significantly (from 7.6% to 15.5%). All other digital channels grew only slightly.

Branding and content creation are in demand

In 2024, advertisers want to allocate the most funds to the marketing disciplines of Brand Strategy/Brand Building (25.6%) and Content/Campaign Creation (23.1%). Sales Support (15.3%) and Marketing Operations (12.8%) follow at a distance.

Digital is growing - offline is under pressure

Compared to the previous year's survey, slightly more respondents (44.6%) want to spend more money on digital. Around half of the respondents want to spend the same amount (49.4%) and almost no one (3.6%) wants to spend less on digital. Even less growth (6%) is expected for traditional advertising compared to the previous year. Most of the respondents (57.1%) want to spend the same amount and around a third (34.5%) less on offline advertising.

Classic with OOH/DOOH in front of TV and DM

Within the offline media budget, OOH/DOOH is likely to benefit the most from an increase (24.4%) or the same amount (36.6%) of advertising investments. TV (more 12.8%, same amount 20.5%) and direct marketing (more 12.5%, same amount 50%) remain popular. Print can expect significantly less growth (6.2%) but the most decline (33.3%). Nevertheless, almost half of those surveyed (45.7%) still want to invest the same amount in newspapers and magazines as before.

Cinema and radio in particular are not part of the 2024 media mix for many of the advertising clients surveyed, and not all of them can afford TV either. In contrast, print, direct marketing and OOH/DOOH will be used by most advertising clients in 2024.

In terms of the specific distribution of the 2024 offline media budget, OOH/DOOH can take the biggest slice of the advertising pie (30%) and only slightly more than in the previous year (26.5%). Followed by print (25.3%), TV (19.9%) and direct marketing (17.5%). Cinema, radio and other media remain at shares of less than 3 percent.

Online with display, video and search

As in the previous year, 53% of digital campaigns will be booked directly (IO bookings) and 47% programmatically (programmatic advertising) in 2024. Display (28.3%) remains the most popular form of advertising, ahead of video (27.6%) and search (26.5%). Only Native lost some of its importance (14.3% compared to 17.1% in the previous year) and Audio increased slightly (from 2.3% to 3.5%). The allocation of budgets to individual advertising inventories changed only slightly compared to the previous year. The top 5 places are occupied by Google/Search (28.7%), Meta (21.4%), YouTube (15%), Premium Publisher Networks (11.3%) and LinkedIn (8.6%).

Top challenges: digital transformation, improving customer experience and data management

The challenges facing advertising clients will change very little in 2024. The top challenges (very important/important) include: digital transformation (90.6%), improving customer experience (90.5%), data management (88.3%), customer journey management (85.8%), proving ROI in marketing (85.9%), data protection and security regulations (82.4%), choosing the right technology (80%) and making personalization a reality (81.1%). Sustainability in marketing as well as artificial intelligence and machine learning are an issue for respondents, but did not make it to the top of the survey in terms of importance.

Recommendations remain the most important source of information for agency selection

The most popular source of information for selecting an agency continues to be personal recommendations (90%). This has increased by almost 10% compared to the previous year's survey and clearly stands out from all other sources of information. Other important sources of information are agency websites/social media (58.8%) and contact with agency management (56.3%). This is followed at some distance by the trade press (26.3%), the LSA website (21.3%), the creative rankings (18.8%), the LSA ranking (15%) and the Effie Awards (6.3%).

Chemistry, tasks/skills are the most important selection criteria

The three most important criteria for agency selection are: 1. personal chemistry/culture (95%), 2. understanding of the task/competencies (82.5%) and 3. references (72.5%). In addition, the size of the agency (26.3%) is another relevant criterion mentioned by clients.

For the evaluation of an agency, the chemistry meeting (30.4%) is mentioned the most, ahead of the written offer (25.7%) and the competition presentation (18.8%).

Agency support for customers remains constant

The majority of advertising clients plan to invest the same amount in the individual disciplines at their top 3 agencies in 2024. Respondents plan to invest slightly more in content, brand communication strategy and marketing technology. In contrast, slightly less in live com and production.

Offer before agile pricing and team rental

When it comes to fee models, the most common option is a quote. This is followed by agile pricing and team hire. The percentage fee is also frequently used, while the performance-based fee model is rarely used.

Different opinions on how to deal with sustainability in advertising

Opinions differ on the question of whether advertising clients, agencies or marketers should calculate and offset the CO2 emissions of advertising campaigns.

While 35% of customers do not think this is a good idea and focus on avoiding and reducing CO2, 25% think it is a good idea and can imagine offsetting the emissions themselves. A further 13.8% of respondents also think the idea is a good one and want to oblige marketers to offset. 10% of respondents do not like the idea and see it as a "trade in indulgences". Only 5% think the idea is good, but want to pass this on to the agency, which should charge the customers for the compensation.

What is pleasing about these rather mixed answers to the CO2 compensation question is that, with 1.3% of respondents, almost no one thinks that the advertising industry has bigger problems to solve than sustainability.

Between October and November 2023, a total of 168 well-known advertising clients in German- and French-speaking Switzerland took part online in the "Industry Indicator 2024" survey conducted by SWA and LSA. The detailed results can be obtained from the offices of the two associations