Report Predicts Spending To Grow In 2022-23 (Though By Less) In Key Market Segments.


Two years into the pandemic, marketing professionals in almost every economic sector are asking the same questions: How much has COVID changed consumer behavior over the long term? And how do we reach those consumers?


In 2021, part of the answer was advertising, which saw substantial increases in sectors like automotive, luxury goods, consumer packaged goods, technology and telecoms. Meanwhile, both business and consumers have evolved new habits.


According to a recent GroupM report entitled Portraits of Change: The New Economy, advertising strategies won’t only be guided by consumer behavior. The realities of producing and distributing goods, as well as the technologies used to engage with consumers, is also influencing marketing strategies.


GroupM argues that COVID-driven supply-chain woes have caused many global companies to integrate their operations within their target markets. More companies are also looking to bypass traditional distribution networks and sell directly to consumers.


“To the extent that companies integrate their businesses more within markets, marketing strategies may become more integrated, too, as commercial results become much less dependent on uncontrollable actions by partners and more dependent on a marketer’s own choices,” the report says.


Yet at the same time, “as the dominant media partners are themselves increasingly global and account for growing shares of the global advertising market, many of the media choices marketers make will be strongly influenced by global preferences”


A look at automotive.


The automotive industry was already trying to transition to electric vehicles while meeting demand for more traditional drivetrains when the pandemic hit. GroupM believes stock-limiting supply-chain problems, especially with semi-conductors, may push manufacturers to focus on higher-priced vehicles and focus on tech that consumers want.


According to the report, automotive ad spending grew by more than 10% in 2021 and is projected to grow by nearly 10% in 2022 before growth falls to around 6% in 2023.


The consumer car-buying journey is likely to evolve, especially as wait times expand. “This may cause some manufacturers to re-emphasize brand building rather than specific performance,” the report says. “Manufacturers need to find the right balance of resources that allows them to continue to invest in their own products while concurrently creating a desire for them.”


Technology is also “changing the vehicle purchase process, which has long resisted e-commerce [due to] traditionally separate roles of dealers and manufacturers and the buyer’s need for financing.”


CPG inches toward the consumer.


CPG revenue grew by 5% in 2020 and while add spending rose by less this year, GroupM projects it will grow by 5% in 2022 and ’23. Yet the balance between traditional advertising and other forms of consumer engagement is evolving.


According to the report, new privacy policies by Apple and Google are driving more CPG businesses to engage with consumers directly. “While marketers in this category are always prioritizing their brand health, a focus on first-party data will continue to take on increasing importance, whether that means developing e-mail lists and subscription services or otherwise finding new ways to maintain a direct relationship with consumers.”


Telecom: a slight slowdown ahead.


The lockdown stages of the pandemic made technology and connectivity even more important than before. Telecom companies “view 2022-2023 as prime years for consumer adoption of 5G,” the report says, “Wherever advanced services are available, carriers are likely to focus on driving awareness of those services through advertising. Competition between legacy cable companies and telecommunications networks will undoubtedly contribute to those efforts, as well.”


After growing by nearly 5% in 2021, GroupM projects a slight slowdown in telecom ad spending over the next two years.


Meanwhile, luxury goods — which saw the biggest ad-spend jump in 2021 (over 30%) will grow at a slower but still impressive rate (11% in 2022 and 8% in 2023). Technology companies also ramped up ad spending in 2021 (growing just under 15%); here, spending will drop less dramatically, and is projected to be grow by around 8-10% in each of the next two years.

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