The Lowdown - January 2022

The new year sees us excited about getting out and about more while facing up to the challenges of inflationary pressures on brand and consumer expenditure. All this and our usual roundups of interesting media developments in M.i.'s Lowdown...

 

Is normality finally returning?

As the government has now scrapped the working from home guidance, city centres are hoping for a much needed boost in business. As reported by the BBC, the 46 premise City Pub Group expects "consumer confidence and consequently demand" to grow once office workers return to work. The Gym Group also says that demand is returning. Out of home advertisers in particular should be keeping a keen eye on mobility and footfall as audiences increasingly go out and about.

The official guidance has also been relaxed for travel which has prompted an immediate boost to holiday bookings. The BBC's article reports 'Holiday bookings jump as UK Covid travel tests axed', with Jet2 saying bookings had increased by 30% week on week, particularly for half term and Easter holidays.


Thomas Cook's boss Alan French sees brighter prospects ahead:

"After 2 years of bans and changing rules, it feels like we've turned a corner and with the end of testing in sight, we expect to see even more people look ahead to a summer of sunshine, beaches and glistening blue seas"

Count us in!

 

What are the prospects for marketing expenditure?

As reported in The Drum, the recent IPA Bellwether report on Q4 2021 shares interesting insights on the state of marketing expenditure:

  1. UK marketing expenditure has increased for three successive quarters with a net balance of +34% of companies surveyed planning to increase their total marketing spend in the coming financial year.

  2. A +17.4% net balance of firms expect to spend more in main media marketing including 'big-ticket' TV and radio advertising campaigns. Events (19%) and Sales Promotion (18%) are also anticipated to be big beneficiaries.

  3. But before we break out the bubbly, growth is expected to slow in 2023 and 2024 (1.8% and 0.9% respectively) through inflation, rising taxes and the comparables returning to pre-pandemic levels.

Paul Bainsfair, Director General at the IPA commented on the report:

"...Omicron has heightened uncertainty, altered consumer behaviour and subsequently impacted UK companies’ marketing budget decision making. Going forward, new variants – alongside supply chain issues and heightened inflation - may indeed induce further wobbles. The key for businesses to weather these fluctuations will be, where possible, to invest in the longer-term and in brand-building media."
 

Are you ready for April showers?!


Let's not beat around the bush, April 2022 has the potential to be a shocker, thanks to the predicted convergence of multiple wallet-pinching impacts. WARC's article 'The cost of living rise spells headaches for brands' highlights 3 key issues:

  • A rise in the cap on energy bills

  • A rise in taxation (National Insurance)

  • And predictions of eyewatering 6.8% inflation (likely to impact interest rates)

As quoted in the FT, Paul Johnson, Director of the Institute for Fiscal Studies said:

The combination of substantial tax increases and big increases in prices, particularly energy prices, will be a larger shock for households on average earnings than anything at least since the financial crisis and possibly for a long time before that.

Many consumers will have to adapt their spending habits to mitigate these squeezes on disposable income by postponing or cutting expenditure on big ticket items and a greater focus on promotions. Marketing agility likely to be required to keep brands' sales targets on track.

 

Cinema witnessing green shoots

According to Mediatel News, 2021's cinema box office revenue increased by 84.7% in UK & Ireland versus 2020 despite cinemas being closed for the first 19 weeks of the year.


Based on Comscore's annual review of box office revenue however, the numbers are still significantly down on the 5 years before the pandemic:

  • 2015 - 2019 = £1.3bn+ each year

  • 2020 = £323.2m

  • 2021 = £596.9m

Comscore is predicting the number of film releases in 2022 to return to 2019 levels, so as restrictions loosen, cinema will be hoping for a further boost. Check out the upcoming releases for 2022 here and stock up on popcorn!


 

The YouTube rich list - who's made it?!

Independent content creators are getting bigger, smarter and, judging by Forbes' latest top-earners list, richer!


According to the BBC's article, 'YouTube rich list: MrBeast was the highest-paid star of 2021', the 23 year old American Jimmy Donaldson (MrBeast) earned $54m (£39m) from the online platform.

The top 5 earners are:

  1. Mr Beast (specialising in stunts and pranks if you were wondering!)

  2. Jake Paul (boxer)

  3. Markiplier (gaming creator)

  4. Rhett and Link (chat show hosts)

  5. Unspeakable (Minecraft player)


Combined, the top 10 YouTubers made $300m (£218m) in 2021, calculated not just on views, but the talent's ability to create brand partnerships, sponsorship deals and merchandise.


As the BBC suggests, the pandemic hit traditional media outlets hard but the best independent creators have benefitted as YouTube has boomed to 1 billion hours of content consumed on the platform every day.


YouTube trends expert, Christ Stokel-Walker suggests:

"YouTube was developed as something that would shake up the media industry and get rid of gatekeepers. It was going to democratise how our society and entertainment industry looks. This list suggests that it's become more like TV than it would prefer to be. The arrival of money on the platform means content is very high stakes - and we see this in what MrBeast is making."
 

Attack of the drones?

Talon's article, 'Are Drones the Future of Brand Fame?', highlights the increasing popularity and potential of drones to deliver brands fame out of home. As displayed by London's NYE fireworks at the turn of the year, drones can provide a real spectacle and global brands are also experimenting with this tactic to add pizazz to their marketing activities. Johnnie Walker created a drone light show to inspire NYE party goers in Goa to #KeepWalking:

Drones certainly seem to offer eye-catching opportunities - just don't get too close to the airport!


 



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