There’s yet to be a consensus on the impact of the cost of living crisis on the advertising industry. Some forecasters are maintaining a bullish outlook, others expect ad spend to falter as consumer spending dries up.
But consumer research from UK publishing group Future suggests that the Christmas season may be immune to any downturn in ad spend, as consumers say they plan to keep Christmas spending high despite economic conditions.
Four in five of those surveyed by Future say the cost of living crisis has already prompted them to change their spending, with 32 percent saying they will “significantly” cut back their personal or household budgets. But at the same time, 91 percent of those who take part in Black Friday say they will be more or similarly engaged this year, and 45 percent say they hope to make their Christmas “bigger and better than ever”. Just 20 percent say they will cut back overall Christmas spend.
There are a few factors which explain this seeming contradiction.
Christmas 2020 was all but cancelled due to COVID restrictions, and while last year’s Christmas was less affected, it still came just as the Omicron variant spread across the world. Thus, Christmas 2022 for many will be the first real return to normal, meaning some will choose to spend big despite the cost of living crisis.
Pandemic savings may help cover the cost too. Sixty percent of those surveyed say they have savings remaining from lockdown, while 75 percent say their overall savings will see them through the cost of living crisis.
So while consumers are cutting costs, they’re still able to spend on the things they prioritise – which for many includes the festive season.
“Christmas and Black Friday are two strong anchor points in the calendar that seem increasingly non-negotiable in terms of engagement and involvement among UK consumers despite the cost of living crisis,” said Clare Dove, UK group commercial director at Future. “Our research shows, however, that Brits will spend wisely during this time, carefully calculating their savings accumulated in lockdown, making pragmatic decisions to alter their lifestyles and seeking out valuable advice through content online to get the best deals.”
This has significant implications for advertisers and ad supported businesses too. The festive season is a bumper time for ad spending anyway, set to be bolstered further by the fact that the FIFA World Cup is taking place in November this year.
There have been fears both of these highlights of the advertising calendar could be hamstrung by low consumer spending, Future’s research suggests that might not be the case.