Advertisers increasingly invest in digital, content and branding

For the 2021 industry indicator, Leading Swiss Agencies LSA and the Swiss Advertising Client Association SWA surveyed advertising clients on their assessments and outlook for the Swiss advertising market.

(Source: Sector indicator 2021 LSA SWA)

In the current survey, some of the questions correspond to the global "Gartner Annual CMO Spend Survey 2020-2021" for the first time, which allows further comparisons to be made.


Media budgets reduced by 14 percent in 2020 

Before looking ahead to 2021, the two associations wanted to know from advertising clients what impact the coronavirus pandemic had on their communications last year. The answers show that budgets that had already been approved were reduced by an average of 11%, investments in agency services were cut by 15% and in media services by 14%. Covid-19 had the greatest impact on media planning, including shifts to digital channels. Message content also had to be adjusted and numerous campaigns had to be canceled and postponed.


More and more digital - also in 2021

Looking ahead to 2021, almost 62% of advertising clients want to invest more in digital compared to the previous year, 25% want to invest the same amount and only 11% want to invest less. The outlook is less positive for offline or traditional media: Only 11 percent of respondents want to invest more advertising money here, 33 percent the same amount and a whopping 52 percent less.

When asked about the breakdown of marketing channels, 32% still want to invest in offline media. More than in any other channel. This is followed by channels such as digital advertising (19 percent), website (11 percent), social marketing (11 percent), event marketing (11 percent), mobile marketing (8 percent), email marketing (8 percent), SEO (7 percent), digital commerce (6 percent), channel/affiliate marketing (6 percent) and others (21 percent).

(Source: Sector indicator 2021 LSA SWA)

Content/Campaign Creation and Brand Strategy in vogue

When it comes to the distribution of budgets according to marketing disciplines, four areas clearly come out on top: Content/Campaign Creation and Management (26 percent), Brand Strategy (26 percent), Sales Support (23 percent) and Marketing Operations (18 percent).


TV is ahead in classical music

What should interest Swiss media marketers is the demand from advertising clients in the traditional media mix. TV is clearly in the lead here in 2021 with a share of 41%, followed by print (33%), direct marketing (27%) and OOH/DOOH (26%). Radio (5%), cinema (2%) and other media such as events and POS (12%) only play a minor role.

Although most advertising clients want to invest roughly the same amount in traditional media as in the previous year, further losses are on the horizon for print media. Here, only a few clients want to invest slightly more, but a good 40% want to invest the same amount and almost as many want to invest less. In the other categories, investments remain roughly the same as in the previous year.


Programmatic in demand again in 2021

For the first time, clients were asked how they allocate their digital budgets to specific channels. Programmatic bookings (24%) were mentioned the most, followed by paid social media (20%), search AD (18%), GDN (18%), network bookings (16%), YouTube (13%), native AD (13%) and direct bookings (12%).


Marketing skills in Corona times

54% of the clients surveyed identified content creation and management as well as brand strengthening measures as their most important strategic capabilities for achieving their goals in the coming year. The new challenges brought about by Covid-19 have shifted the focus of advertisers in terms of key marketing capabilities. According to the survey, it was recognized that they need to respond to the challenges and opportunities in the customer journey and adjust the focus of messages and their activation.

(Source: Sector indicator 2021 LSA SWA)

This change is also reflected in collaboration with agencies: clients are investing more than 60 percent more in digital, around 50 percent in content marketing and around 25 percent in analytics and branding at their top 3 agencies in 2021 in order to successfully manage brand content and interactions with consumers.

(Source: Sector indicator 2021 LSA SWA)

Agency pitch still popular

Despite this time-consuming, often inefficient and costly method of agency selection, competitive presentations are still the most frequently used method of finding a new agency partner. However, some alternatives are catching up fast, such as the written offer, direct award or the chemistry meeting. This development is necessary because in the fast-moving communications industry, efficient and accurate selection procedures are needed to ensure a prosperous collaboration between client and agency right from the start.


Remuneration: Agile pricing increasingly in use

The changing forms of collaboration also have an impact on fee models: agile pricing is currently the most common model used by clients, followed by quotation/scope of work. Team hire, which is particularly suitable for long-term projects, is used less frequently. The percentage fee on the media volume continues to hold up well among media agencies, with roughly the same number of clients wanting this form of remuneration more or less. The success fee is still not widely used, although the measurability of campaigns is becoming increasingly important.

The Industry indicator was published for the third time. 158 advertising clients took part in the annual survey conducted by the SWA and LSA. The survey was conducted between October and the beginning of November 2020. The detailed results can be obtained from the offices of both associations.

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