Global marketers display increased optimism in their ad spending despite challenges such as inflation, slowed consumer spending, and supply chain uncertainties. The report by Nielsen reveals that 72% of global marketers anticipate larger advertising budgets for the current year, up from 64% the previous year. Particularly in the Asia-Pacific region, 81% expect budget increases compared to 56% in the previous year.
However, there appears to be a misalignment between marketing tactics and key performance indicators (KPIs). While marketers prioritise long-term and full-funnel return on investment (ROI) as their top KPIs, 70% intend to prioritise performance marketing over brand-building initiatives.
The dominance of digital channels in media budgets could potentially hinder holistic returns, as nearly two-thirds of media budgets are allocated to digital and performance channels. This trend suggests that marketers may face challenges in achieving the comprehensive returns they seek.
Despite this, marketers are increasingly allocating their ad budgets to channels perceived as effective. For instance, more than 63% of ad budgets are expected to be allocated to digital channels in 2024, with a notable emphasis on retail media networks, search, and connected TV (CTV).
While digital media, particularly social media, continues to attract increased spending, the actual return on investment (ROI) varies significantly across brands. Although social media has shown a higher average ROI compared to other channels over the past three years, there are significant performance gaps between brands. Similarly, while search remains a favoured channel, its average ROI has been lower compared to the overall media average.
The disconnect between marketers’ objectives and strategies is evident, with revenue growth being a primary objective. Despite prioritising long-term ROI and full-funnel ROI as key performance indicators, marketers are shifting towards performance marketing, potentially compromising their ability to meet these objectives.
Marketers are reducing spending on traditional mass-reach channels such as linear TV and AM/FM radio, redirecting resources towards digital channels for better tracking and revenue connection.
Investment in brand-building marketing is emphasised as a means to drive revenue growth, despite the challenges of committing to long-term advertising spending.
Marketers see opportunities in connected TV (CTV) and streaming platforms, although adoption rates vary by region. While CTV adoption has surged in some markets, it has yet to achieve the same level of penetration globally.
Overall, while there is confidence in the holistic ROI capabilities of marketing technology among global marketers, the effectiveness of channels in delivering both sales and brand-building objectives remains varied. Only a minority of channels perform above average for both metrics globally, underscoring the importance of measuring both brand-building and sales impacts to understand the value of media plans.