GroupM’s ‘New Economy’ Report Says Pandemic Caused Big Shift In Ad spend

GroupM’s ‘New Economy’ Report Says Pandemic Caused Big Shift In Ad spend
B&T Magazine
Edited by B&T Magazine

WPP’s GroupM has released a new report highlighting changes in adspend and consumer behavior since the pandemic began.

‘Portraits of Change: The New Economy’ was written by GroupM’s global VP business intelligence, Brian Weiser, as well as Kate Scott-Dawkins and other contributors, and focuses on how the global pandemic has influenced culture, economy, marketing and advertising.

The report mainly centres on how recent global turmoil has affected the five largest marketing sectors: automotive, CPG, luxury, technology, and telecommunications.

The automotive sector’s adspend grew 10 per cent in 2021. The report noted, “lingering fears of the virus could prevent consumers from relying on public transit in the near term. Therefore, the need for cars as commuter vehicles paired with ongoing low interest rates could be enough persuasion for some to pay up.”

The CPG sector’s adspend grew by five per cent among its largest companies. GroupM said the growth was fuelled by Pandemic-unique circumstances, with many living off stimulus checks and spending more time at home.

They also acknowledged the CPG industry had prioritised “greater addressability and efficiency in their media buys and a desire to recoup the increased investments of recent years.”

It’s no surprise luxury apparel, jewellery, and cosmetics particularly suffered from social restrictions. However, GroupM observed the sector had a surprising turnaround, with 4.5 per cent adspend growth in 2021.

However, this was still below double digit pre-pandemic levels, which may return with increased international travel and social activities.

Unsurprisingly, technology enjoyed significant adspend growth at 15 per cent, largely due to more devices and digital services being used from home in lieu of external socialising and outdoor activities.

Lastly, telecommunications saw 5 per cent adspend growth in 2021, with the report noting companies had experienced notable gains in 5G implementation, services, subscribers, and investments.

However, it said the “chicken-and-egg dynamic” of companies hesitating to promote 5G products until they see customer interest, and customers hesitating to commit to 5G until companies advertise more 5G products, could hinder the technology’s future dispersion and adoption.

Portraits of Change also observed three overarching trends stemming from the recent pandemic, including businesses in general accelerating transformation, businesses reconsidering outsider market and company reliance, and marketers now having the opportunity to change advertising budgets based on these changes.

Portraits of Change: The New Economy serves as an update on GroupM’s May report, Emerging Stronger: Building Brands in a Transformed World, and is now available on GroupM’s website.

The Portraits of Change series will provide twice yearly updates on the evolution and adaptation of these key sectors.

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GroupM Portraits of Change

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