MARKET RECOVERY WITH DIGITAL ADVERTISING AS THE FRONT RUNNER
This year, the advertising market (including historical media, digital media, trade fairs, exhibitions, direct marketing, etc.) will slightly exceed its 2019 level with a total of approx. 34 billion euros, according to forecasts by the French market research firm KANTAR. This corresponds to an increase of almost 9.5% compared to the previous year and a plus of 0.4% compared to 2019.
Last year, digital (display, search, social media) grew by 20.2% compared to the year before reaching a total of 8.2 billion euros. For the first time, digital alone overtook the combined total of the five historic media (press, outdoor advertising, television, radio, cinema), which grew by almost 16% last year to 7.9 billion. In 2020, their respective levels were almost similar, at 6.8 billion euros.
With growth of 17.3% in 2021, only small screen TV is doing better than pre-Covid, with 3.55 billion euros in net advertising revenues, according to the Unified Barometer of the Advertising Market (BUMP). Within the historical media, radio has been the second least affected by the last two turbulent years. With a total of 686 million euros in net advertising revenues in 2021, radio performance grew by 10.1%, only 4% lower than in 2019.
As for the press, which was heavily affected by the healthcare crisis in 2020, it rebounded by 13.5% in one year to reach 1.83 billion euros (but still -10.4% below 2019). Within this segment, the free press has decreased by another 4.2% in 2021 to 188 million euros, which represents a decrease of 30% in the last two years.
For its part, outdoor advertising has surpassed the €1 billion euro mark in 2021, growing by 21.6% in one year. Along with cinema, this is the medium that has been most affected by the crisis, but it is in the process of regaining momentum.
ESG ADVERTISING AMOUNTED TO 3.5 BILLION EUROS IN FRANCE LAST YEAR
A new era has begun in French advertising: ESG (Environmental, Social, Governance) is now becoming a top priority for advertisers, advertising agencies and the media. In 2021, ESG campaigns already accounted for 11% of gross investment in the entire French advertising market, for all media types combined, according to KANTAR. 2,136 out of a total of 52,298 active advertisers have integrated ESG aspects into their advertising, including major brands as well as SMEs.
With this major upheaval, and with more to come, many advertisers have changed their advertising practices. As one advertising agency executive explains, “in five years, we have gone from a world where only 10% of advertising assignments were dedicated to ESG aspects to one where 90% of assignments include ESG aspects”. Regardless of the sector, there is hardly a campaign left that does not consider ESG issues.
The legal dimension obviously plays a major role in this trend, as advertisers choose to increase their ESG advertising expenditures, with the French Climate and Resilience Act as well as the Mobility Orientation Act further amplifing this phenomenon.
NEW LEGISLATION PUTS PRESSURE ON ESG COMPLIANCE IN THE AUTOMOTIVE INDUSTRY
Legislation enacted in recent years is having a lasting effect, particularly on automotive advertising. Since last March, car manufacturers have been required to indicate the carbon dioxide emission class (using a coloured scale, similar to the one already used for years on household appliances) of the vehicles promoted in their advertising campaign. Car manufacturers must now also promote active mobility, carpooling, and public transport through mandatory statements to be inserted throughout their advertisements: "Prefer walking or biking for short distances," "Think about carpooling," and "Take public transportation every day." In August, fossil fuel advertising will be banned altogether.
As a result, car advertising nowadays must comply with more than thirty compulsory statements. This presents real practical difficulties for manufacturers, as advertising for their products is becoming less and less clear and effective. Some brands now advertise almost exclusively electric or hybrid cars. This is a trend that will continue to accelerate. According to some estimates, the share of advertising investment in electric and hybrid vehicles will reach 60% in 2022 and 70% in 2023.
In addition to legal obligations, consumer aspects are now extremely important to advertisers. For almost half of 15- to 24-year-olds, companies' commitment to social and environmental issues is a decisive factor in their consumption decisions. Climate change will spare no one, and this trend has not escaped brands.
But the backlash against false brand statements and greenwashing can be swift and severe. Thus, it remains crucial to strike the right tone in ESG advertising: not to moralize or adopt a soothing discourse.