Key Insights to Kickstart Your Week: Strengthened Marketing Teams, Persistent Ads, Rising Shop Prices

Nearly half of businesses plan to expand their marketing teams this year

41% of businesses plan to grow their internal marketing teams in 2024, despite ongoing economic uncertainty. In a survey conducted by digital marketing agency Impression, 73% of 1,000 marketing professionals anticipate business growth in the coming year.

Despite strong expectations for growth, there isn't necessarily an anticipated increase in marketing budgets. Only 47% of respondents predict a rise in marketing budgets for 2024.

In addition, brands are allocating their efforts and budget towards bottom of the funnel activity. Nearly 28% of the marketers surveyed indicate that their business is concentrating on conversion and driving sales and leads, while 26% are focused on building brand awareness and attraction.

Approximately 20% of businesses prioritize customer retention and loyalty, while another 21% allocate their efforts evenly between brand building, bottom of the funnel activity, and retention.

Consistency between out of home and TV ads drives better effectiveness scores

Brands should aim to build consistency between their out of home (OOH) advertising and TV ads, suggests research from System1 and JCDecaux UK.

The research reveals that out of home advertisements that align with their television counterparts demonstrate twice the effectiveness in brand fluency, as reported by System1's Test Your Ad platform, which assesses emotional reactions to advertisements.

Out of home advertisements that are aligned with their television counterparts achieve an average of 62% in two-second brand recognition, indicating the strength and speed of brand recognition, compared to only 30% for out of home ads that do not align with TV creative.

OOH advertisements that matched TV counterparts outperformed those without a consistent creative thread, achieving an average star rating of 3.1 stars and a spike rating of 1.10, compared to 2.8 stars and 0.90 spike, respectively.

Source: System1 and JCDecaux UK

Shop price inflation remains steady in December

Shop price inflation held steady in December, with prices increasing by an average of 4.3% compared to the same period last year, according to data from the British Retail Consortium (BRC) and NIQ.

This figure is in line with November's shop price inflation rate of 4.3% and is slightly below the three-month average of 4.6%.

Shop price inflation was stable in December, but the inflation rate for food prices slowed to 6.7%, down from 7.7% in November. This marks the eighth straight month of decreasing inflation on food prices in stores. The shop price index tracks changes in the price of 500 of the most frequently purchased items. Food price inflation is currently at its lowest since June 2022.

At the end of 2023, promotional activity in the food retail sector reached a four-year peak, indicating that retailers are targeting price-conscious consumers. According to Mike Watkins, head of retailer and business insight at NIQ, research revealed that low price, quality, and availability were top considerations for shoppers during their main Christmas grocery shopping. The decline in shop prices likely contributed to a more festive season for shoppers, amid increased pressure on discretionary spending and earlier, more extensive price discounts.

Source: British Retail Consortium and NIQ

Shoppers willing to accept AI in retail journeys so long as it’s transparent

More than 61% of shoppers are open to retailers utilizing AI as long as they are clear about its implementation. In fact, 42% of UK shoppers are already conscious of AI being used by retailers in their shopping experiences. Additionally, 45% of consumers acknowledge using generative AI tools like ChatGPT in their daily routines.

Shoppers consider AI most useful in retail promotions, with 28% believing that AI-powered pricing and promotions would enhance their experience. Additionally, 14% of UK consumers see potential value in AI-powered chatbots, but 25% view them as the most disruptive AI application in their shopping experience.

Source: Intellias

Around three quarters of businesses struggle to maintain an innovative marketing strategy

A majority of businesses (75%) are facing challenges in keeping up with innovative marketing strategies, tactics, and technology.

The primary hurdle that marketers are facing is the difficulty in accessing, organizing, and utilizing customer data. This also contributes to their struggle in understanding and defining their target audience, which is the second most significant issue.

The research shows that 59% of businesses have reduced their budgets in the past year, focusing mainly on digital marketing. Specifically, 34% have cut funding for search marketing while 31% have done so for content marketing. Additionally, 67% of businesses report that the cost of living crisis has affected their marketing strategies.

Source: LOCALiQ