Alcohol brands predicted to reduce annual TV spend by 2.4%
Alcohol brands will reduce TV advertising spend over the next three years in response to declining broadcast audiences and a shift in media strategy, a report by Zenith has found.
Even though alcohol ad-spend will rise from £5.2 billion in 2020 to £6 billion by 2023, booze brands are forecast to reduce their spending on TV by 2.4% each year.
Much of this change is being driven by spirit brands, pivoting rapidly to owned online content to help consumers “replicate the brand experience” during the Covid-19 pandemic, the Business Intelligence – Alcohol: Beer + Spirits report says.
Digital advertising will account for 30% of alcohol ad-spend in 2023, up from 21% in 2019.
“Spirit brands have surpassed beer brands in terms of sales value by offering more premium experiences and rituals around their product and serve,” Ben Lukawski, global chief strategy officer, Zenith, said. “With the pandemic taking audiences away from the on-trade we have seen a greater emphasis on bringing these premium experiences in home through owned digital content.”
The Publicis Group media agency has found that alcohol ad-spend in 12 key global markets will grow by 5.3% this year – ahead of the total ad market which will grow by 4.9%.
Alcohol brands spent just over half of their media budgets on TV last year, compared to 24% for the average brand, Zenith added.
As big spenders on TV, alcohol brands’ advertising is restricted by strict broadcasting rules about not being able to encourage greater consumption. This has led brands to grow through a process of “premiumisation”, the report explained.
It read: “Premiumisation means persuading drinkers to trade up to higher-value products that provide better experiences, by building brand image and experience through mass-reach communication. Alcohol brands therefore rely heavily on television and out-of-home advertising, spending twice as much on television as the average brand and nearly four times as much on out-of-home.”
Conversely, alcohol brands have been historically slow to commit to digital advertising, devoting less than half as much of their budgets to it than the average brand in 2020.
But, as the pandemic forced these brands to find new routes to market, digital spend increased from 21% share of budget in 2019 to 24% last year, with greater investment in brand websites, educational content and influencer marketing.
Zenith predicts Spain, the UK, Germany and France will be the stand-out growth markets, with annual growth rates between 2020 and 2023 of 28%, 21%, 10% and 8% respectively.
This is because these markets, where drinking in bars, pubs or restaurants is an engrained aspect of normal social life, suffered the steepest drops in spending when lockdowns were imposed.
During 2020, alcohol advertising fell by 52% in Spain, 48% in the UK, 22% in Germany and 23% in France. Their rapid recovery will return them to roughly where they were in 2019 by 2023, the report added.
The 12 markets included in this report are Australia, Canada, China, France, Germany, India, Italy, Russia, Spain, Switzerland, the UK and the US, which between them account for 73% of total global ad-spend.