GDP, Amazon, commercial radio: 5 killer stats to start your week
From slowing UK GDP growth to digital marketers’ plans to spend more on Amazon and the loyalty disconnect between consumers and marketers, we arm you with the most important stats of the week.
UK GDP growth slows as Brexit uncertainty bites
UK GDP growth slowed to 0.2% in the fourth quarter of 2018 as Brexit uncertainty, weakness in the Eurozone and the trade war between the US and China impacted the economy. That was down from relatively strong growth of 0.6% in the third quarter.
Services provided the bulk of the growth in the final quarter, increasing by 0.4% between October and December. Manufacturing output shrank by 0.9%, while construction was down 0.3%.
The figures also show that GDP actually fell in December, down 0.4% year on year, a worse performance than expected after economists predicted the economy might be flat in the final month of the year.
Annually, GDP growth dropped to 1.4% in 2018, the lowest level since 2012. The think tank Resolution estimates UK households are £1,500 worse off on average today than expected before the EU referendum due to slowing growth and the weakness of the pound driving up inflation.
Source: Office for National Statistics
Digital advertisers plan to spend more on Amazon
Digital advertisers are planning to up investment in Amazon as brands look to capitalise on its scale and user data.
A survey of 100 digital advertising decision-makers at retail companies generating at least $50m in online sales annually, found that retail marketers estimate Amazon gets 14% of their digital ad spend, placing it third behind Google on 21% and Facebook on 19%. Half of those surveyed said they plan to spend more on Amazon over the next year, with an average planned increase of 25%.
The majority of this growth comes from marketers shifting budget, with 29% saying ad dollars would come from Google and 34% from Facebook. However, 41% are adding incremental budget to support increased Amazon spend.
The top three reasons for advertisers investing in Amazon are strong performance, size of the audience and being able to reach their target audience. Some 39% of respondents say they see higher return on ad spend than on Google and 54% than on Facebook. Plus, 32% report lower cost per mille (CPM) than Google and 38% than Facebook.
However, there are concerns. Forty per cent of marketers are worried about Amazon having too much of their data and 31% see Amazon’s retail business as in competition with their own. Nearly half (48%) are worried consumers will be turned off by the ad experience with Amazon.
Display ad viewability drops in the Christmas quarter
Viewability rates for display ads fell slightly in the final quarter of 2018 as competition for premium slots impacted rates.
Some 57% of display ad impressions in the UK actually reached users, down from 59% in the previous quarter. That figure was also slightly below the European average of 58% and well below France on 63%. However, it is a better viewability rate than in Italy, on 45%, and Germany on 55%.
The viewable view time of display ads also fell in the fourth quarter to 25.6 seconds, down from 26.3 seconds in Q3. Meetrics counts a view as 50% of the ad space being in the visible area of the browser for at least one second for static display ads and two seconds for video ads.
Commercial radio ad revenues tops £700m for the first time in 2018
Commercial radio’s ad revenues topped £700m for the first time in 2018 as an increase in audience size and new types of advertisers boosted the industry.
Ad revenue came in at £713.3m last year, up 5.1% year on year and the third consecutive year of record-breaking revenues. Commercial radio’s audience increased to 35.6 million, while it had its highest share of listening since 2001 at 46.5%, according to Rajar.
Sky is the biggest spender on radio ads, investing £17m. However, online companies saw the biggest increases in investment with Amazon up 36% and online estate agents’ spend rising 110%. Online recruitment ads were up 38%, broadband 70% and mobile 43%.
Half of brands missing out on the benefits of loyalty programmes
Half of brands currently offer a loyalty scheme, despite 70% of marketers and 69% of consumers saying customers enjoy and value the rewards offered.
Discounts, on 53%, free delivery (41%) and free samples/gifts (31%) are the leading tactics marketers believe are most effective. However, customers are more enthusiastic about benefits such as rewards based on location – cited by 56% of customers versus 13% of marketers – personalised emails (54% vs 19%) and game-like challenges (45% vs 15%).
There is also a disconnect between how marketers and consumers perceive loyalty. Just 26% of marketers think customers are less loyal to brands than a year ago, compared to 39% of consumers. And 39% of marketers believe customers would be persuaded to ‘shop around’ for new brands if offered deals, while 57% of consumers would switch for a good offer.