Is the £9.5 billion Christmas marketing spend worth it?

For advertisers Christmas is not just a time for festive cheer but a critical period for business.

According to data from the Advertising Association and Warc, brands are set to splash a record £9.5 billion on Christmas advertising this year, marking a significant 4.8 per cent increase compared to the previous year.

Why the big uptick in spending?

In large part, this surge in spending can be attributed to inflation.

With media inflation expected to lift ad spend by 4.8 per cent, brands are compelled to invest more to maintain their advertising presence.

Despite a record-breaking amount being allocated to Christmas advertising, real terms growth in the fourth quarter is forecasted to be just 0.3 per cent.

James McDonald, Director of Data, Intelligence, and Forecasting at Warc, notes: "The market is effectively flat when measured at pre-Covid prices."

Why are brands diversifying?

Brands are diversifying their investments, recognising the significance of reaching consumers through various channels.

Emerging and traditional media are both experiencing increased funding, with broadcast video on demand set to surge by 20.2 per cent, out-of-home by 10.3 per cent, and online display by 9.1 per cent.

Television, a longstanding advertising platform, still commands a significant share, with £1.5bn predicted to be spent on it in the final quarter.

Warc is optimistic about this data, suggesting that brands are not only responding to inflation but also acknowledging the benefits of Christmas advertising.

The Christmas ad season is poised to contribute significantly to the advertising industry, with the fourth quarter alone expected to add £430 million to the total market value for 2023.

Intriguingly, the festive season is accounting for a substantial 47 per cent of all growth this year, according to AA/Warc.

This festive boost is a testament to the strategic importance that brands place on Christmas advertising.

The early bird gets the gift

In recent years, there's been a noticeable trend of brands unveiling their Christmas ads earlier than ever.

This shift aligns with consumer behaviour, as almost half (48 per cent) of adults admit that festive ads help them with gift ideas.

Furthermore, a whopping 70 per cent of individuals aged between 25 and 34 consider Christmas ads as the 'ultimate festive mood booster'.

Leading the charge in early festive ad releases, retailers like Aldi, Asda, and M&S have set the stage for a competitive Christmas season.

Aldi's Kevin the Carrot, featured in a Willy Wonka parody, has already proven to be a winner in terms of ad effectiveness, scoring an impressive 5.9 stars, according to System1.

Other major players such as M&S Food, Sainsbury's, Vodafone, Coca-Cola, and Boots also achieved stellar scores above five stars.

So, what’s the Christmas advertising advantage?

As the tinsel-adorned season unfolds, brands are not just spreading festive joy but strategically investing in their market presence.

The £9.5bn Christmas advertising bonanza is more than just a festive tradition - it's a calculated move to capture consumer attention, boost brand visibility, and ultimately drive sales.

With the festive season poised to contribute significantly to the advertising industry's growth, brands are navigating the challenges of inflation and intensifying competition with creativity and strategic foresight.

As consumers eagerly await heart-warming and entertaining festive ads, advertisers are gearing up for a season that goes beyond celebrations, embodying the spirit of strategic marketing and business success.

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