Companies that stop investing in advertising lose an average of 20% in penetration

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In the midst of a full evolution towards more digital and segmented formats, data indicates that brands that stop investing in advertising lose an average of 20% of penetration in their markets . In addition, advertising rewards long-term investment by multiplying by four the penetration achieved by brands compared to short-term advertising investments. This is indicated in the report 'Advertising manual to win buyers' by Kantar Worldpanel .

Advertising investment has added its third consecutive positive year , with a growth of 3.7% in 2023. Sectors such as fashion, drugstores and distribution have already recovered pre-pandemic investment levels. However, others such as food, beverages and beauty have not yet reached them.

In a context of increasingly fragmented audiences , brands are increasingly analysing consumer purchasing habits to offer more personalised advertising. This is the case of cross-referencing information about the purchases of certain consumers with other products they might buy. This type of tool is known as shopper targeting and avoids the costs of investing in massive , non-segmented audiences.

This trend allows us to know that a certain streaming platform or linear television program has more users potentially interested in a certain product . Information that brands use to advertise.

In this context, the popularity of digital and social media is on the rise. Kantar Worldpanel data indicates that Instagram is the most used network: more than half of the population uses it . Facebook is in second place, followed, in order, by YouTube, Spotify, TikTok and X. As a result, social media is also evolving along the path of segmentation , appropriating specific themes.

Streaming advertising and linear television
Linear television , on the other hand, has fallen by 9 points since 2020. However, its loyal audience watches television an average of 3 hours a day, which is more time than that spent on digital channels.

However, in the last 4 years, television viewing has doubled the amount of time spent on "other uses of the television" . A trend that is transversal to the entire population.

Interestingly, streaming platforms are clearly adopting the more traditional growth strategy of linear television . Netflix has positioned itself as a pioneer in the introduction of subscription formats with advertising, a strategy that other platforms are already working on .

In addition, platforms are also betting, like linear TV, on releasing series on a weekly basis. In fact, the most popular series in Spain release their episodes on a weekly basis, such as '30 Monedas' on HBO Max or 'La Mesías' on Movistar+.

Across all channels, advertising investment is seeking the opportunities offered by this segmented landscape to be more effective and almost definitively abandon mass audiences. “What is relevant at the moment is to take advantage of the channel mix. Combine them optimally , according to the information provided by consumer panels, and build increasingly profitable and connected campaigns with the goal of converting to sales,” underline Mayte González and Fernando Moreno, responsible for the Media solution at Kantar Worldpanel .

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Advertising InvestmentKantar Media


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