1. UK ad spend to slow this year
UK ad spend climbed 5.1% year on year to reach £5.6bn in the third quarter of 2018, marketing the 21st consecutive quarter of growth and the industry’s strongest Q3 growth since 2015. That growth was driven by online advertising, which saw spend increase by 12.3% year on year, with the strongest growth since in mobile at a 23.6% increase.
The growth means that the UK ad industry is on track for ad spend in 2018 of £23.5bn, up 6% year on year. However, growth is predicted to slow to 4.6% in 2019, with a no-deal Brexit potentially causing a further slowdown.
On individual formats, TV spend was basically flat in the quarter despite an 11.5% rise in video-on-demand revenue for UK broadcasters, while radio spend was up 5% (and digital radio 25.1%) and outdoor saw a 7.3% increase. However, cinema, direct mail, national newsbrands, regional newsbrands and magazine brands all saw a decline year on year in Q3, despite upticks in digital spend.
Source: Advertising Association/WARC
2. Consumers becoming more confident in how brands handle their data
Two in five (41%) of consumers say they are now more comfortable and confident with how brands handle their data thanks to the introduction of GDPR in May 2018.
In 2018, consumers claimed they received fewer emails than ever before – 57 per week, down from 73 per week in 2017 – and only 44% of these are from brands. Consumers estimate they were signed up to receive email messages from around nine different brands last year, down from 12 in 2017.
When it comes to why consumers decide to unsubscribe from brands’ emails, receiving too many messages was the most common response, cited by 59% of respondents, followed by the information no longer being relevant and not recognising the brand, both cited by 43%.
When unsubscribing, 70% take action via the brand’s website or button within an email, with 40% of those expecting never to hear from the brand again via email or only receive transactional emails (23%). Almost one in five (9%) of those consumers expect to be taken to options where they can change their email preferences or to some form of survey (7%).
3. UK online retail sales growth hit an all-time low
UK online retail sales growth hit an all-time low of just 3.6% year on year in December, as the industry experienced a tough Christmas trading period to end a challenging second half of the year.
The first half of 2018 started well, with online retail recording 16% growth. However, a series of lacklustre performances contributed to just 8.4% growth for the second half of 2018. Online spending in December decreased 15% month over month compared to November.
Category results echoed this poor performance, with gifts experiencing a 31.1% decline compared to last year, while electricals were down 21.7%.
Overall in 2018, feel-good events such as the royal wedding and World Cup, as well as good weather, means online retail sales across the year were up 11.8%, ahead of the forecast 9%. Online retail spend growth is expected to decelerate in 2019 to 9% as a reflection of ongoing uncertainty.
Source: Capgemini IMRG
4. Marketers underestimating brand loyalty
Marketers appear to be underestimating customer brand loyalty, with just 11% of marketers believe that Generation Z consumers are loyal, compared to the 58% of consumers who claim they are loyal.
Just 22% of marketers think consumers have become more loyal in the past two years, almost half the number (38%) of consumers who believe they’re more loyal now than they were two years ago.
54% of consumers are currently invested in a loyalty system (card or mobile) for between four and 10 brands, with 86% saying they consider themselves to be loyal to those brands.
On influencers, 54% of marketers think the right influencer can affect brand loyalty, compared to just 29% of consumers. And 25% of marketers say content is the key to changing consumers’ perception of a brand, compared to just 15% of consumers.
5. Streaming giants responsible for surge in ‘unidentified viewing’
There is a rising trend towards ‘unidentified viewing’ on TV sets – TV set viewing that BARB cannot identify – likely accounted for by subscription video-on-demand (SVoD) that are not yet signed up to BARB’s measurement system.
In the 12 months to September 2018, time spent on unidentified viewing – where the TV set was being used to do something other than watch a channel or on-demand service – increased to 19% of all TV set activity, up from 16% in the previous 12 months.
In minute terms, that is a rise from 40 to 46 minutes a day on average.
Like total TV set viewing, unidentified viewing also increases at the weekend but to a greater degree. Compared to the daily average, unidentified viewing is 21% higher on a Saturday and 23% higher on a Sunday, suggesting audiences are waiting for the weekend to binge watch a series or to do some gaming.
Streaming services such as Amazon Prime and Netflix are likely responsible for the rise in unidentified viewing statistics.
In the third quarter of 2018 some 11.6 million homes in the UK had access to at least one streaming service whether it be Netflix, Amazon Prime or Now TV, up 22% year on year.
The number of homes with two or more services has also climbed 40% from 2.8 million to just under four million in the past year.
Source: Broadcasters’ Audience Research Board