Promotions, advertising, long-term effectiveness: 5 interesting stats to start your week

Almost a third of supermarket sales made under promotion

Around three in 10 (29.3%) supermarket sales made in the four weeks to 14 April were made under promotion, according to figures from Kantar.

Outside of the Christmas period, this is the highest level of promotional spending since June 2021. The money saved by shoppers through deals and discounts amounted to £1.3bn over the four-week period. This equates to around £46 per household, according to Kantar.

Overall, grocery price inflation fell to 3.2%, aided by the high level of promotional activity. The drop in inflation is the fourteenth month in a row where Kantar has recorded a declining rate of grocery inflation.

Across the four weeks to 14 April, total grocery till spend increased by 4.3% to £33.92bn. Ocado was the fastest-growing retailer in the period, with its sales increasing by 12.5% to £638m in the four-week period. Lidl was the second-fastest growing grocery with 9.1% growth. Asda and Co-op both saw slight sales declines, by 0.4% and 0.1% respectively.

Source: Kantar

UK advertising market sees real terms decline in 2023

The UK advertising market grew 6% to £36.6bn in 2023, according to figures from the Advertising Association (AA) and Warc.

However, when taking into account high inflation, the real terms figure represents a 1.2% contraction in spend, according to the latest AA and Warc Expenditure Report. This puts advertising spend behind the UK’s overall economic growth of 0.1%.

AA and Warc now forecast ad spend to rise 5.8% in 2024 to £38.8bn, a 0.1 percentage point downgrade on January’s forecast, which it attributes to prolonged inflationary pressures. By 2025, the UK’s ad market is expected to be worth more than £40bn.

Included in the forecast is the prediction TV and radio will grow 2.6% and 2.3%, respectively, in a return to growth. Spend on cinema advertising is also expected to grow by 2.5%. Events this year, such as the men’s UEFA Euros tournament in the summer and a looming General Election, are expected to contribute to healthy growth.

Source: AA and Warc

Advertising’s longer-term ROI more than double that of short term

Advertising has an average short-term profit ROI of £1.87 per pound invested, which increases to £4.11 when sustained effects (up to 24 months) are included, according to a study.

Profit Ability 2: the new business case for advertising shows that 58% of advertising’s total profit generation happens after the first 13 weeks.

The research commissioned by Thinkbox uses collective data from Ebiquity, EssenceMediacom, Gain Theory, Mindshare and Wavemaker UK. It covers £1.8bn of media investment in the UK across 10 media channels, 141 brands and 14 categories.

The study finds profitability varies by media, with TV advertising emerging well from the research. It accounts for 54.7% of the full advertising-generated profit, with an average full profit ROI of £5.61 for every pound spent. Within this, linear TV accounts for 46.6% of full payback, and BVOD accounts for 8.2%.

Despite only 3.3% of advertising investment going to print, the channel has the highest full payback ROI with £6.36 and the best short-term ROI with £2.74. It has a stable payback across the different stages, accounting for 4.8% of immediate payback and full payback

Source: Thinkbox

Retail media spend up 12% in 2023

While the UK economy grew just 0.1% in 2023, digital advertising made strong gains over the past 12 months.

Overall, the UK’s digital ad market grew 11% last year to £29.6bn, as brands invested more in digital channels such as connected TV (CTV), podcasts and retail media.

Indeed, retail media spend grew 12% in 2023 to £283m, as advertisers looked to tap into first-party data ahead of the crackdown on cookies. These spend levels are expected to increase in the coming year, with Group M forecasting investment in retail media will grow 8.3% in 2024, with revenues last year estimated at $119.4bn (£96.3bn) globally.

Podcast advertising hit double digit growth (23%), as did CTV (21%) and digital out-of-home (12%), according to figures from the IAB and PwC’s Digital Adspend report.

Mobile advertising spend also made gains, growing 15% to £16.7bn last year, a more than 10 percentage point increase on 2022’s 4% growth.

Source: IAB and PwC

Consumer confidence is up but progress feels like it is in ‘slow motion’

Consumer confidence grew for the first time in two months in April, but the overall picture remains stubbornly flat against an indifferent economic environment.

Four of the five measures that make up GfK’s Consumer Confidence Barometer increased in April, with the overall index score growing by two points. It now sits at -19 (the same figure it was in January) meaning over the last six months it has bounced between -24 and -19, highlighting just how slow progress has become in turning around the public’s economic perception.

It is, however, a vast improvement on last year when the overall index score stood at -30.

The public’s perception of their own personal financial situation over the next 12 months (2) is the only measure that is in positive figures, remaining flat from March.

Source: GfK