Boom in Christmas TV ads cooled by cost of living, Qatar worries

There won’t be a Christmas TV advertising boom this year, as jitters over partnering with the World Cup host country, Qatar’s human rights record and cost-of-living crisis all ended the annual battle for the big-budget decorations that traditionally bombard the public during the festive season.

British companies will continue to spend a record £9.5bn. in the run up to Christmas, known as the “Golden Quarter”, where many retailers make the bulk of their annual profits and sales, but the amount going to traditional TV, newspaper and radio outlets will decline this year.

And as savings take hold, advertisers are reining in the traditional Christmas budget.

The 4.5% year-over-year growth in spending forecast for the latest quarter is the smallest for a Christmas period in almost a decade, excluding 2020, when the country was in the grip of a pandemic, according to the Association of Advertising and Advertising firm. of Warc research.

Major retailers will start rolling out their Christmas promotions over the next fortnight, including Marks & Spencer, Sainsbury’s, Boots and John Lewis.

However, prime-time TV ad prices are up to 20% more expensive than usual, as the Black Friday discount period, the World Cup and the build-up to Christmas coincide, attracting companies that don’t normally buy ads. during the season, such as bookmakers and sports brands.

As a result, traditional holiday advertisers are adjusting their television ad plans to fit their budgets and turning to other mediums, such as the movies and social media.

Social media channels can also be a more cost-effective way to reach consumers. M&S, for example, is beefing up its team of social media influencers at the workshop, including an AI-created personality, Mira, who will have her own Instagram account.

Retailers and brands are hoping families will celebrate after the Omicron variant of Covid ruined last Christmas, which was supposed to be a return to normalcy after the 2020 lockdowns.

However, the British are expected to spend £4.4bn. less on non-essential items before Christmas as inflation depletes your cash reserves.

With smaller celebrations and fewer gifts on the cards, retailers’ marketing budgets are expected to shrink as they focus their efforts on keeping prices low.

Charlotte Rogers, associate editor of trade magazine Marketing Week, said: “Many brands have shifted their focus to value and price. Brands have to walk a tightrope to be festive and not be deaf. With the understanding that it’s going to be a difficult Christmas for many families, they don’t want to be too lenient.”

With the UK entering a new era of austerity, glittering Christmas campaigns are on and targeted digital marketing is on the way.

AA/Warc report predicts search ad spending, including Google and the increasing amount spent on campaigns by companies targeting Amazon customers, will rise 7.3% year-over-year in Q4 to £3.4 billion, double the amount budgeted. TV spending this Christmas.

“Higher costs are squeezing both advertisers’ margins and household budgets, and business conditions are at their worst since the covid outbreak, leading to dovish expectations for the Christmas quarter,” said James McDonald, Director of Data, Intelligence and Forecasting at Warc.

Historically, the World Cup is a commercial television bonanza with advertisers claiming to pay up to £500,000 for a 30-second slot in a high-profile England game.

But this year, which is the first time a World Cup has been held so close to Christmas, it turns out he’s not announcing gold. Instead, the amount expected to be spent on traditional TV advertising will fall 0.6% year-on-year in the latest quarter, with some companies fearing a backlash for being too closely associated with Qatar.

“Normally there would be a lot more interest from advertisers, but unless a brand has specific links to the World Cup, the ethical issue and cost inflation has left some customers wondering if it’s worth spending the money.” Said a senior executive of A media. agency that advises and buys advertising space for clients.

“If England does well, I’d bet there will be late money for TV and other media, but for many advertisers Santa is a much less controversial target for ad budgets.”

Last month, Danish sportswear brand Hummel released the national team’s World Cup kit with its branding all but faded in protest at the event, which was held in Qatar.

Hummel tweeted:

In the UK, spending on broadcaster video-on-demand (BVOD) services last quarter – which, as a commercial broadcaster broadcasting the World Cup, mainly means ITV’s new streaming service, ITVX – rose by 4.2% year-on-year . However, this is less than half the forecast in July, with growth of 9.4% last quarter.

And the rise in online TV spend will not be enough to prevent the overall £1.7bn UK TV advertising market experiencing a flat year-on-year Christmas.

Total spending on newspapers is also expected to fall 4.2% last quarter despite a small bump in online spending, while spending on radio ads will fall 0.6%, again despite a small increase in online budgets.

“That [newspaper] the industry is certainly having trouble getting ads booked for World Cup coverage,” said a source from a national newspaper editorial group.

AA/Warc has also lowered its forecast for social media spending, which is often targeted by advertisers as soccer fans tend to use their phones to interact while watching matches, from 11.5% to 6.9% growth in the fourth quarter.

Part of the reduction in social spending forecast is due to Apple’s decision to block the cookies that advertisers use to target users on their devices, which has cost companies like Facebook, Snap, Twitter and YouTube. Google has some tens of billions of dollars in ad revenue to date.