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How to understand demand in a booming media market

Demand for advertising is booming as we head into the final quarter of 2021. While consumer goods companies continued to invest throughout the pandemic, we are now seeing spend return with a vengeance across multiple sectors. With total spend growth forecast to increase by 19%, ad spend in the majority of markets is above pre-pandemic levels. 

Whilst in line with mid-year predictions, the surge in demand has still taken the market slightly by surprise and it is also driving ongoing inflation across the board, caused partly by brands concerned about losing saliency and relevance, but also by a reduction in supply as the after-effects of COVID-19 become clear. 

Last year, we could already see that the pandemic was accelerating consumer trends, with digital consumption going gangbusters across all age cohorts. Viewers flocked to Disney +, now up to 116m subscribers, Amazon Prime, which now has 130m to 140m and Netflix, which is over the 200m mark. 

Local players in all markets have also seen subscriptions soar, plus the same thing was happening in print. Anything that could be consumed at home was. Anything that could be consumed digitally was. Given that these trends were already underway pre-pandemic, they will not reverse, even as the world slowly returns to something more normal. 

Advertisers and brands are now faced with a changed landscape. Consumption of analogue media has hugely reduced, and it is not coming back. This means a significant tranche of media supply has been taken out of the traditional media market and has migrated into ad-free environments. That supply has removed itself from the total amount available, and that is a challenge for all of us. 

Navigating this new marketplace requires a fresh approach, starting with identifying quality supply and how we lock that in. Now is the time for advertisers to start exploring how to activate across multiple types of media, and understand how to take a holistic approach to engaging with content and working with different partners. 

Even in outdoor, which cannot be disintermediated and will continue to be consumed in the same manner as before, delivery of content is beginning to change. As we move towards 2022, there will be an acceleration of digital delivery via outdoor sites. Brands, advertisers and agencies have yet to fully explore opportunities here, but it will be an important shift. 

Locking in supply in traditional media will mean advertisers partnering with content creators. If we think about video, in the US, for example, there are three major groups – Disney, NBC and CBS Viacom – and there is a level of vertical integration in those organisations. They have everything from ideation, creation and execution to distribution of content. We think working with them at source will, in time, lead brands to a better direct route to market. 

Traditional media is under pressure. People are consuming the same content, but how they are consuming it and how they are accessing it will change, and that is the direction of travel. Our job is to lock in that supply of quality content to mitigate the traditional market systems that are in place. Clients must tactically plan and work with their agency to access inventory to reduce the impact of this shift in consumption. 

The media market is probably moving faster than consumers, but as rapidly as consumption habits changed, we will see the good ones stick.