With next year’s local market ad spending pegged to increase to $161.5 billion, per BIA Advisory Services, it’s a good time to plan for how to work with clients as we move toward a stabilizing economy. Your clients are looking for guidance about what kind of advertising to buy and what to expect for ROI. They also need to understand consumer intent as they prepare for 2022.
Prepared for 2022
Online Buying Trend Continues
A new report, What’s Trending in Consumer Spending, from the CMO Council and Commerce Signal, shows how spending priorities changed during the past 18 months. While e‑commerce boomed at the peak of the pandemic, shoppers are expanding the way they shop as vaccination rates increase. Nimble marketers, including your clients, must be ready to offer consumers what they’re looking for and through the right channels.
Last year, spending surged on home furnishings and sporting goods. Consumers finally got around to the home improvement projects they’d been putting off, and a significant percentage of purchases were made online. As Nick Mangiapane, CMO of Commerce Signals, notes, “Consumers are going to be consumers. Spending shifts, but it doesn’t stop.” BIA analysts echoed these findings during a recent joint webinar with SalesFuel. Specifically, spending in the real estate and general services sectors increased dramatically between 2019 and 2021.
Growth Verticals in 2022
The new normal holds plenty of opportunity for media sellers in 2022. Consumers have already started to travel again, and BIA Managing Partner Rick Ducey reported that this category will surge next year, especially in the versatile out-of-home format. Whether your clients opt for traditional or digital billboards, or cinema advertising, they’ll want to be visible to their target audiences.
Media sellers who participated in the 11th Annual State of Media Sales survey, co-sponsored by SalesFuel and BIA Advisory Services, see opportunity in medical clinics, especially for digital formats. And with so many retailers and other businesses seeking employees, the recruitment sector is on fire. With 63% of all media sellers expecting a significant increase in that vertical for 2021, the same will likely hold true for 2022, noted C. Lee Smith, SalesFuel president and CEO, during the State of Media Sales webinar.
Growth Media Formats in 2022
With so many consumers now focused on their smartphones, Ducey predicts that mobile ad spending in the digital category will outpace direct mail spending in the traditional media category in 2022 for the first time ever. Mobile includes streaming video, display, etc. And the popularity of digital advertising has driven up costs in a big way. In highlighting the latest Merkle data, StreetFight magazine reported some eyepopping increases in digital advertising costs over the past year and a half.
Your clients will certainly notice that each paid search CPC now costs 41% more. If they are advertising on Facebook, the CPMs have increased 46%. And Amazon Sponsored Products CPC will cost them 43% more. These pricing levels, along with restrictions Facebook is encountering because of privacy limitations, may cause your clients to consider other media formats. To counter the sticker shock, measure your client's ROI on their advertising investment. If they are generating $2.26 of profit for every dollar spent on advertising, excluding campaign costs, they are about average, according to WARC. The company's analysts also say that the highest ROI is obtained when about half of the ad budget goes to digital formats.
You can run a Digital Audit on AdMall, powered by SalesFuel, to give them a snapshot of their market presence and how their efforts match with what their target audience is doing online. And with this competitive intelligence, you can also show them where other businesses are connecting with desired customers as they prepare for 2022.
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