Forecasts from local and international organizations suggest that the economy in Spain will experience a slowdown in 2024, from GDP growth of 2.3% in 2023 to 1.4% in 2024 (Bank of Spain). Matched against these estimates, the CMOs who participate in the latest IEDM (Index of Expectations of Marketing Directors) are displayed conservative with regard to the development of the market and their sales forecasts.
Your goal for the first half of 2024 is to defuse this situation Increase advertising investments.
The IEDM is a joint study by the Spanish Marketing Association (AMKT) and the consulting firm GfK that identifies the forecasts of More than 300 marketing managers of large companies from the main sectors of the Spanish economybased on three key aspects: market behavior, your company’s sales and the advertising investments you plan to make in the following semester.
Market behavior: lower expectations than six months ago
The CMOs consulted for the IEDM generally assess market developments conservatively. This manifests itself This represents a decrease of 0.67 points in the indicator measuring their expectations for the first half of 2024, from 2.32 points to 1.65. It’s 29% less.
Nonetheless, Forecasts for the first six months of the year are higher than those for the same period in 2023. Specifically, the indicator today is 0.66 points above the value in 2023, which is 67% more.
It should be noted that only 18% of respondents expect the economic situation to be better in the first half of this year compared to the end of 2023. For 44%, however, it will be worse, while 38% expect it to stay the same.
The economic situation is one of the factors that most importantly determines marketing actions for CMOs. Nevertheless, inflation is paramount because it affects costs, the purchasing power of the public and the pricing strategy to offset them. The second factor with the greatest influence is interest rates. The situation follows at some distance the political polarization and economic development of the EU. The war conflicts in Ukraine and the Gaza Strip occupy the last places in the ranking of marketing managers.
Own sales forecasts: A slowdown is expected
In line with market behavior forecasts CMOs expect their companies’ revenues to slow as well. For this reason, this indicator recorded a decrease, this time by 0.37 points, which is 12% compared to the previous measurement.
Like the market behavior indicator, the one on own sales is also better today than in the first half of 2023. It is now 0.33 points higher. That is, 14% higher.
When it comes to exit predictions, 34% of marketing managers finished 2023 worse than expected, while 44% will do better. 22% will be completed as estimated.
When the data is analyzed by area of activity, CMOs surveyed in tourism (64%), retail (61%), mass consumption (54%), marketing services and banking agreed “yes” with 50% of responses each that they did this year 2023 ended better than expected. On the contrary, marketing managers in the technology (53%) and education (50%) sectors admit they have fallen short of expectations.
Looking at the expected growth for the first half of 2024, Technology, energy, banking, insurance, health and tourism are those forecasting the greatest growth.
In terms of sales channels, however, 4 out of 10 CMOs say they sell more than 5% of their products and services via e-commerce. 40% of the managing directors surveyed consider their sales level to be satisfactory on-linea model that they will rely on even more in the second half of the year.
Advertising investments: the indicator with the greatest growth
Given the expected slowdown CMOs plan to significantly increase advertising investments as a lever for sales growth in the first half of the year. This could be the reason for the behavior of this indicator, since it is the only one that recorded positive behavior in this edition of the IEDM, increasing to 1.71 from 1.31 points in the previous measurement. We are facing an increase of 0.40 points, which is an increase of 31%.
If we compare the development of this indicator with the expectations for the first half of 2023, we can see that it increased by 1.59 points – more than 1,300% – from 0.12 to 1.71 points.
As for channels, investing in media on-line continues to rise after the remarkable momentum in 2020. 44% of respondents invest more than 40% in digital advertising. A value that has been stable since 2021.
you will be the technology, energy, mass consumption and tourism sectors, which are planning major advertising investments, with growth between 3% and 9%. It should be noted that none of the sectors surveyed expect a reduction in this concept, as the media, retail and education sectors will maintain current investments until 2024.
