Record-breaking £95bn Channeled into Christmas Advertising by Brands

Source: Coca-Cola

Data from the Advertising Association and Warc reveals that advertisers are projected to allocate a staggering £9.5bn for this year's Christmas season, setting a new record. This represents a notable 4.8% surge compared to the corresponding period last year, primarily influenced by inflation.

Brands are increasing their investment in both emerging and traditional media, with a forecasted growth of 20.2% for broadcast video on demand, 10.3% for out-of-home, and 9.1% for online display. Despite a slight decrease of 0.2% compared to its 2022 total, television continues to be an attractive option, projected to receive £1.5bn in spending during the final quarter.

Despite record levels of spending, WARC attributes much of the growth to inflation, projecting a real terms growth of just 0.3% in the fourth quarter. According to James McDonald, the director of data, intelligence, and forecasting at Warc, when measured at pre-Covid prices, the market remains effectively stagnant. However, McDonald also expresses optimism, stating that the data indicates brands are increasing their spending due to the perceived benefits of Christmas advertising, particularly through emotive display ads and performance marketing in retail media environments.

The Christmas advertising season is predicted to have a greater impact on the advertising industry than usual. In the fourth quarter alone, it is projected to contribute £430m to the total market value of 2023. Comparatively, for the first nine months of the year, this figure stands at £486m, indicating that the festive season accounts for 47% of the overall growth in 2023. These findings come from AA/Warc research. McDonald states that this growth aligns with, if not exceeds, expectations based on the current economic conditions.

Brands are increasingly releasing their Christmas ads earlier each year for good reason. Nearly half (48%) of adults find these festive ads helpful in generating gift ideas. Furthermore, 70% of individuals between the ages of 25 and 34 consider Christmas ads as the ultimate mood booster during the holiday season.

This year, Aldi, Asda, and M&S have taken the lead by unveiling their Christmas ads ahead of time. System1 suggests that Aldi's ad, featuring a Willy Wonka parody with Kevin the Carrot, has been the most effective so far in terms of ad impact.

Aldi has scored the highest possible score, 5.9 stars, while M&S Food, Sainsbury’s, Vodafone, Coca-Cola and Boots all scored above 5 stars.