Advertisers fared better overall through 2nd Corona year. This is the result of the current survey of the organization advertisers in the brand association OWM, which was conducted in October among member companies and presented on Wednesday at the OWM Summit by the managing director of OWM, Susanne Kunz. Half of member companies (50%) expect sales to increase this year, up from 40% in 2020. Only 26% expect sales to remain flat in 2021, compared to 36% last year.
Earnings development has also improved overall. The proportion of companies (42%) reporting better development in 2021 compared with the previous year (35%) increased by 20%.
Advertising investment: 2021 recovery, 2022 stability
In the current year, advertising investments have increased again in total: in 2021, 38% have increased their budgets, compared with only 11% in the previous year. Whereas in 2020, 49% of companies reduced their budgets, the figure is now only 43% - 19% have maintained their advertising volume.
Advertising volumes in 2021 thus show a positive development and are recovering from the Corona-related slumps from the previous year. The data on changes in advertising volumes for 2022 indicate that advertising volumes will remain stable next year: 37% of companies expect advertising volumes to remain stable, 32% expect them to increase.
The forecast for overall economic development in 2022 reflects this sentiment: 35% of respondents currently believe that the situation will improve next year (in 2020, the figure was 29%). This compares with 30% who expect the situation to worsen in 2022 - last year the figure was 38%.
Revenues under pressure: media inflation by far the biggest challenge
Despite the positive development, OWM Managing Director Susanne Kunz notes, "Media inflation is currently the biggest challenge for advertisers, even though they have come through the second Corona year better and stable advertising volumes can be expected next year."
77% of the companies surveyed say that media inflation is a very big challenge for them. And rightly so: The positive development of the pandemic in the middle of the year and the incipient economic recovery have led to strong demand in TV and digital. The parallel explosion of media costs is viewed very critically by advertisers. This development is driving almost every member company.
This is underscored when the companies are asked for their assessment of the development of earnings in 2022 compared with 2021: Despite positive sales development, the earnings development for 2022 is assessed as very subdued (31% worse, 52% unchanged, 17% better). This reflects both the price development on the procurement side and on the media side. In terms of sales development for 2022, 56% of the companies surveyed expect an increase compared with 2021.
Among the other challenges facing advertisers, cross-media measurement, proof of performance and impact, transparency and fragmentation top the rankings.
Shift to digital: trend of the past years continues
When asked about the development of advertising expenditure for 2022, it is clear that digital channels in particular lead the ranking of advertising investment. In particular, CTV/ATV (71% will increase their spending in this area, no company plans to reduce here) and online video (increase: 68%, decrease: 7%). But companies are also increasing their advertising volume for social media (increase: 47%, reduction: 13%) and influencers (increase: 44%, reduction: 1%).
There is little movement in classic media: In sponsorship, 72% of members rate future investments as stable, while print (74%) and out-of-home and search (69% each) are also rated as constant. TV continues to be under pressure (20% increase, 43% decrease).
According to Susanne Kunz, the results confirm that the previous trends in the media mix are continuing: "Advertising volumes are following consumers - the trend towards digital continues, with video leading by far, followed by social media and influencer marketing. Podcasts, as newcomers, can also look forward to a positive development in advertising volumes."
Sustainability being implemented at member companies
More and more consumers expect companies to show attitude and take responsibility. 93% of the member companies are already working on implementing the Sustainable Development Goals (SDGs) or have entered the concrete planning stage.
Almost three quarters (71%) of the member companies already live up to this claim in the area of sustainable consumption and production methods. In the area of gender equality, 69% of the companies are taking a stance. In the area of sustainable economic growth and decent work, the figure is 65% and in climate protection 60%.
Sustainability is also being driven forward in the use of media. 68% of advertisers are already making the CO2 emissions generated by their advertising campaigns CO2 "free" for selected campaigns or are planning to do so in the near future. Kunz is delighted: "Sustainability is not an option, but already part of the business model. The survey shows this very clearly. OWM has already taken up this topic and is currently working on an overview of the most important CO2 compensation models existing in the market."