The AdNews end of year Perspectives, looking back at 2023 and forward to next year
This year has been a challenging year for many given the difficult macroeconomic conditions slowing the economy down. The talking points have been around the cost of living crisis, decreased consumer spending, rising fuel cost, and rate rises. All this means that consumers are feeling the squeeze. For example, Australians are increasingly looking for cheaper alternatives when shopping and cutting back on certain non-essentials. Meanwhile, ABS data revealed that retail sales volumes fell for the third consecutive quarter in July this year - the first time that’s happened since 2008.
This is causing some jitters in the market about what the impact will be on advertising spend. The latest SMI figures show signs of a weaker ad market, with ad spend down 5.5% in August compared to a record month last year. But there have been some positive stories to tell, with out-of-home ad spend growing 4.8% in August. What this shows is that when budgets are under pressure and advertisers need the highest impact for every dollar spent, they’re sticking with OOH because it offers cut-through and flexibility like no other medium.
During our conversations with clients this year, we noticed that budgets aren’t necessarily being reduced but there has been more hesitation around spending in certain quarters. So dollars are being shifted around rather than being cut because marketers know that an economic downturn is not the time to reduce advertising.
Provided you remain thoughtful and strategic about your investments - as marketers always are - now is the right time to maintain ad investments for long-term gain. Another reason why OOH in particular is so resilient is because its digitisation means it can increasingly act as a performance marketing channel for brands that are after short-term sale targets and as a long-term brand-building tool which it is traditionally used for.
I would say market is a mixed bag at the moment. We’re seeing more longterm planning than what we’ve had in the past two years and I think that’s expected. However, there will always be a role for short-term campaigns in the market. I expect to see more of these as everyone gets their Christmas/summer campaigns out before it returns to normal on the other side of the holidays.
The OOH sector doesn’t face the same concerns that plague other mediums, most notably digital platforms’ challenge with ad fraud and data privacy. The opportunity for OOH is taking a greater market share from digital mediums. Because of the years of investment and hard work media suppliers have put in, I think OOH is poised to achieve this in 2024.
The OOH industry has done a phenomenal job ensuring OOH serves the needs of marketers. They’ve done this by the rapid digital transformation, increasing verification standards, and expanding premium sites. Marketers and media buyers in OOH have so much data and insights at their fingertips that is making planning, buying, and analysing OOH campaigns easier than ever. The sector is benefitting from this by being one of the only sectors to see growth during difficult economic conditions and being one of the most trusted mediums. Marketers are seeing the strength and reliability of OOH and diverting their marketing budgets to reflect this. But, OOH deserves a greater share of marketing budgets, and we’re going to see that in the new year.
Other opportunities for advertising will come from new formats really starting to mature in 2024. For me, I’m looking forward to seeing the growth of retail media which received a lot of attention this year. I attended a retail media conference earlier in the year and it was clear that brands, agencies, and media owners alike are excited about the potential of the sector and for good reason. As more suppliers enter the space or continue to develop their assets in the space, it will become much more sophisticated and lucrative for brands. We’ll see this open up plenty of opportunities for the industry.
Mo Moubayed is cofounder of Veridooh
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