While the temperature in Qatar, host of the 2022 FIFA Men’s World Cup, will fall between 73°F to 79°F, the marketing industry is facing a cold snap as advertisers tighten their belts.
The World Cup kicks off Sunday, Nov. 20 and will continue during the Thanksgiving and early Christmas period, with the final falling on Hanukkah Sunday, Dec. 18. Never has such a large sporting event been scheduled during advertising’s “golden quarter.”
Forecasters have predicted this timing may not play out so well in certain Western ad markets, which are already grappling with a cost of living crisis. Shoppers in the U.K. alone are predicted to spend $4 billion less on Christmas items this year. Increasing inflation, a war in Europe and global geopolitical uncertainty are all weighing on consumers. High demand for limited TV inventory is also putting a squeeze on media plans.
A ‘noisy’ season
“This is a peak season for a lot of businesses already, and it’s very noisy. There’s a lot going on,” said Chris Ross, vice president analyst at Gartner. “The World Cup will be an interesting amplifier. We’ll need to wait and see how it all intersects and plays out.”
The considerations driving 2023 ad spend are multifaceted and vary across geographies.
Concerns over Qatar’s human rights record and its treatment of women and LGBTQ+ communities have made some brands nervous to commit to both World Cup and Christmas campaigns. This, combined, with pricier-than-usual TV slots and a clash with Black Friday has left agency planners in the U.K., U.S., and Europe under pressure and tight for space.
Against a tough economic backdrop in post-Brexit U.K, the Advertising Association (AA) and researchers at WARC have predicted the country’s ad spend will grow by just 4.5% year-on-year in the final three months of 2022.
This will mark the smallest growth during the Christmas period in almost a decade (excluding 2020, when the U.K. was under a stringent Covid-19 lockdown). TV advertising is set to fall 0.6%. To put things in context, during the 2018 Russia World Cup, overall ad budgets increased by 5.9%.
In Europe, Dentsu has forecast Italy’s ad spend to take a 2.4% nosedive following the European champions’ shock failure to qualify for the World Cup. This hit will leave Italy in the top 10 global economies where investment in advertising has shrunk year-on-year, underscoring just how big a blow this lack of representation on the World stage will be to the ad industry there.
It’s not all doom and gloom though: in the U.S., it’s a different story. With mid-term elections and FIFA Men’s World Cup in the second half of 2022, Magna has projected a higher ad spend increase of 9.8%. When non-cyclical ad spending and political dollars are excluded, the increase is expected to be 8.1%.
And, despite the U.K.’s muted growth for the quarter, U.K. companies will still spend a record $11 billion in the run-up to Christmas. The money will simply flow elsewhere instead of into traditional TV and radio.
There’s an opportunity for cost-sensitive brands to experiment with other media channels, including digital, SEO and VOD, all of which now offer greater addressability and targeting opportunities than in previous World Cups.
A balancing act
Matt Rhodes, chief strategy officer at creative agency House337, said the next month or so will be a balancing act for marketers.
“While Christmas is a planned and long-term topic relevant to a mass market in the U.K., the World Cup is more spontaneous, has a focused audience and with the event happing in a time zone a few hours ahead of the U.K., many matches will occur during the day outside of peak advertising periods,” he observed.
With major U.K. brands, including grocers Sainsbury’s and Asda, having already launched festive spots, he expects advertisers will opt for a Christmas hero creative in prime-time TV slots and save their targeted, day-time and social executions for World Cup-related work.
“This period could become a massive test of how effective brands and media buyers can be at targeting the right ads into the right context to allow the two to live in harmony,” he said.
Louise Johnson, chief executive at sports and entertainment agency Fuse said companies were operating in an “environment with unique challenges and opportunities.” She highlighted just how “crucial” the last three months of the year are for retail brands in particular—reliant on big-ticket TV ads to encourage shoppers to the tills—and broadcasters, who have had to adjust the “crown jewel” TV shows and finales, so they don’t clash with matches.
Sam Benkel, managing director for retail media in Northern Europe at ad tech platform Criteo, agreed this year’s overlap with the festive season would likely hit retail brands hardest. He advised stores to ensure they had a single customer view to drive sales online and in-store for those “group watch” moments that will, for the first time, take place in with the Christmas tree lighting up the room.
He pointed towards the opportunity for e-commerce companies like Deliveroo, which recently launched its own self-service ad platform, to establish themselves as media channels for brands to engage festive shoppers and soccer fans alike.
“Soaring demand for advertising opportunities presents supermarkets like ASDA and Morrisons with a new, lucrative revenue stream to tap into,” he finished.
The proof will be in the (Christmas) pudding come January when retailers post those all-important Christmas sales updates.
