Optimism among advertisers: advertising to grow by more than 5% this year
The “Nine Trends 2024” of the Spanish Association of Advertisers (AEA) show that, despite the turbulent international landscape with two serious international conflicts and continued price increases, advertisers are optimistic about the significant growth possibilities of 2024 in the commercial communication sector. There are a number of reasons for this: tighter inflation, estimates of advertising spend increasing by more than 5%, sporting events that could help the recovery, and AI that will drive an era of unprecedented innovation and efficiency.
These trend blocks are the result of input from the ‘aea Expert Committee’ of companies: Adjinn, Arce Media-Auditsa, Boreal Media, Círculo de Ingenio Analítico, Ebiquity, IMOP Insights, Instituto Superior para el Desarrollo de Internet (ISDI), Kantar, ODEC, SCOPEN and Wavemaker.
The marketing industry continues to face major challenges around AI, measurement, investment, the digital world and its formats, the relationship of brands with consumers, as well as the new role of the agency and business culture.
Evolution of generative AI
Generative AI in particular will bring improvements and help in a multitude of processes and routines, such as campaign creation, media planning, performance evaluation and advertising control. AI will produce faster responses, real-time query resolution and big data analysis, tighter predictions, process improvement and automation, personalisation, greater collaboration between work areas, help with data visualisation and fusion, and faster delivery of results, among other benefits. All this will lead to a necessary reordering and adaptation of users in the performance of their work.
Transparency and accuracy in measurement
Advertisers, faced with the need to know the return on investment (ROI), will continue to demand greater transparency and precision in measurement. This is already causing media companies to create their own algorithms; independent audits of marketing measurement to grow; and generative AI is filling the gap: revolutionising and democratising measurement and analytics, enabling real-time execution of ROI algorithms, integrating multiple data sources and giving companies a significant advantage in rapid decision making, with the ability to generate insights and marketing strategies autonomously, better understanding the audience.
In this measurement of consumer attention, multi-platform measurement will gain relevance in order to have a holistic view of the reach of campaigns, both in terms of coverage and frequency. Furthermore, the study of the different levels of attention will be further developed, which must go beyond viewability and, for this reason, in recent years there has been an increase in the use of facial coding and eye-tracking techniques as an additional step, an area in which AI is also already entering.
Slight growth in investment
The slight growth in investment in recent years is expected to consolidate into a positive trend, with figures estimated at around 5%. The sporting events of 2024 would be an incentive for this, the European Championship, the America’s Cup and the Olympics. By media, television could recover the “lost” ground this year, especially connected television, which is presented as a solid bet, although with the challenge of resolving its measurement. On the other hand, OTT platforms will continue to grow in terms of investment.
Radio will need to continue to work on measurement by providing systems that improve audience data in both digital and analogue coverage and frequency, with digital audio expected to explode further. Outdoor media is looking at another year of upward momentum supported by its digital development. And, in general, digital media as a whole will continue to rise above the market average, mainly in rrss.
Streaming continues to evolve with AVOD on the rise
As more and more SVOD (subscription video-on-demand) services are launched, users are no longer willing to pay for more subscriptions and are turning to AVOD (ad-supported video-on-demand) apps. From an activation point of view, AVOD goes beyond video ads and is already enabling different types of formats, such as product placement and interactive ads.
Digital: new formats, branding and retail media
Of particular note within digital are the retail channels, which are attracting more attention in planning and will continue to grow in 2024. Retail media offers the opportunity to impact the consumer at a time when the user is already interested in buying a product, which offers a higher likelihood of conversion and even more so when the landing page is located within an ecommerce site, either within the advertiser’s site or at a retailer.
Digital: new formats, branding and retail media
Within digital, retail channels deserve a special mention, as they are gaining more attention in planning and will continue to rise in 2024. Retail media offers the opportunity to impact the consumer at a time when the user is already interested in buying a product, which offers a higher likelihood of conversion and even more so when the landing page is located within an ecommerce site, either within the advertiser’s site or at a retailer.
Many advertisers will also be betting on the potential of branding applied in digital environments. This type of campaign increasingly accounts for a higher percentage of total digital investment, as its ability to achieve business objectives is highly valued.
Similarly, new formats emerging in social, including search ads, which help to increase impressions, reduce costs and maintain strong click-through rates, will be experimented with. However, the most important challenge is to measure their return, as well as to establish systems that reduce fraud and, through certification, provide confidence in ad buying.
Resurgence of contextual advertising
As the digital advertising landscape transforms, contextual advertising offers a way to reach users with the right content at the right time, without the need for cookies.
More agile, activist and consumer-focused brands
In the face of all this, targets will react better to brands that are characterised by agility and speed to market or that focus on the consumer with innovative, disruptive and direct experience propositions. In addition, with inflation hitting consumers’ pockets, the rise of private labels, cheaper retailers or the push for smaller, local brands, companies are beginning to sophisticate their price management by splitting the market to target customers with fewer constraints, as well as consumers seeking value through “premiumisation”.
Brands with less than 10% penetration are gaining ground around the world. Micro-brands” are driving disproportionate growth in consumer goods, and seek to challenge established consumer concepts, ideas and needs.
In terms of the ideals that drive brands, people will continue to favour brands that espouse activist principles and expect them to align with their personal values. However, consumers do not always do what they say, the so-called purchase-value-to-action gap.
On the other hand, influencer content continues to be tracked. 60% of global marketers say that spending on influencers will increase by 2024, placing greater demands on brands to be able to manage negative reactions and tailor their communication to their DNA.
More competitive agencies
To respond to this market with so many new formats, agencies need to be better prepared for a demanding competitive environment and changing needs among advertisers who are reviewing processes and looking for a clear demonstration and measurement of value from their partners.
In this sense, AI will also have an impact on agency operations, especially in content generation and with a greater focus, in a more agile way, on the production of company assets. All of this will change not only working models, but also remuneration models.
In addition to AI, the fusion of both marketing and advertising with technology, in general, will dominate all disciplines and, always, from a key omni-channel point of view.
Corporate culture: sustainability and employee wellbeing
The sustainability culture of advertising companies is also transcending into the realm of digital campaigns. The work of many ad servers, data centres, etc., generates electricity consumption and a carbon footprint. As a result, the advertising industry will increasingly look for solutions to limit this impact on the planet.
Diversity and inclusion will also be incorporated into the roadmap of companies with a broad vision that is not only gender-based. Moreover, for the growth of the collaborative economy in 2024, it will be essential to take into consideration the well-being and happiness of the employee in order to receive their loyalty.
