Opening of pubs and bars means more booze ads

Author Moonshot.news

Published on: 24/05/2021

Alcohol advertising in 12 key markets will grow 5.3% in 2021, more than advertising market in general that is expected to be 4.9% growth, as brands recover from a much steeper drop in 2020, according to advertising company Zenith’s forecast. Alcohol advertising will then grow roughly in line with the market, with 4%-5% annual growth in 2022 and 2023.

Zenith forecasts Spain, the UK, Germany and France to be the stand-out growth markets, with annual growth rates between 2020 and 2023 of 28%, 21%, 10% and 8% respectively.

That’s because these markets, where drinking in bars, pubs or restaurants is an engrained aspect of normal social life, suffered the steepest drops in spending when lockdowns were imposed. During 2020, alcohol advertising fell by 52% in Spain, 48% in the UK, 22% in Germany and 23% in France. Their rapid recovery will return them to roughly where they were in 2019 by 2023.

STEADY GROWTH

“The alcohol industry has suffered more from the pandemic than most, and that was reflected in the steep drop in adspend last year,” said Jonathan Barnard, Head of Forecasting, Zenith. “The recovery won’t be as dramatic as the downturn, but investment in digital communication will drive steady growth in alcohol advertising for the next few years.”

“Alcohol brands devoted 49% of their budgets to television in 2020, compared to 24% for the average brand, and 19% to out-of-home advertising, compared to 5%. This tactic has become less effective as audiences shift to digital media, though, particularly the young consumers most likely to visit a new bar and try out a new drink”, Zenith said.

ALCOHOL ECOMMERCE

“Alcohol brands have historically been slow to commit to digital advertising, devoting less than half as much of their budgets to it than the average brand in 2020. That’s changing rapidly now.”

Alcohol brands increased their spending on digital media from 21% of budgets in 2019 to 24% in 2020. Spirits brands were particularly prominent, using influencers and trade partners to teach consumers to mix their own cocktails, for example.

Zenith expects brands to expand their digital advertising to support alcohol ecommerce even after pubs and restaurants are fully open, fuelling 9.2% annual growth in digital adspend between 2019 and 2023, when digital advertising will account for 30% of alcohol advertising budgets.

Zenith predicts alcohol brands will reduce their expenditure on television by 2.4% a year to 2023, compared to the 2019 baseline, as traditional broadcast audiences continue to shrink. Out-of-home advertising, by contrast, will grow by 1.1% a year, even taking into account the pandemic-induced reduction in foot and road traffic.

Alcohol advertising shrank nearly twice as fast as the overall ad market in 2020, falling by 11.6% compared to 6.4% of the market as a whole.

SLOW RETURN

But the return to normality will be slow, and alcohol adspend will still be 8% below the 2019 level by the end of 2021, at USD 7.0 billion. Zenith does not expect alcohol advertising to exceed the pre-pandemic peak until 2023, when it will reach USD 7.7 billion.

The 12 markets included in the report are Australia, Canada, China, France, Germany, India, Italy, Russia, Spain, Switzerland, the UK and the US, which between them account for 73% of total global adspend. It covers advertising of all types of beer and spirits in these markets.