Zenith foresees that advertising of the household appliances sector in the 12 key markets will grow above the advertising market as a whole in 2021, with a increase of around 12.6%, while the total market will grow around 11.5%. Forced to spend more time at home, consumers are investing in making their homes more pleasant to live in, using some of the money saved by not being able to socialize or go on vacation. This is driving a rapid growth in demand for large and small appliances, especially kitchens, washing machines, dishwashers and air conditioners. Despite the relaxation of restrictions caused by the coronavirus, Zenith expects consumers to continue to spend more time and budget on the home than before the pandemic and forecasts a 6% annual growth in advertising investment for appliances between 2022 and 2023 .
Zenith predicts that the advertising investment of household appliance brands will increase from $ 4.4 billion in 2020 to $ 5 billion in 2021, well above the 4,500 million invested in 2019, before the pandemic. In 2023, advertising investment will reach $ 5.6 billion.
Brand building and ecommerce will drive 10% annual growth in investment in digital
Digital advertising represented the 55% of advertising investment of the household appliances sector in 2020, compared to 51% in 2019. It is essential both for brand building, mainly using video on-line, native advertising and social networks, as for the performance, using paid search. Most purchases of large appliances are made out of urgent necessity, to replace a broken appliance. Brand advertising is essential to create differentiation and position the brand in the top of mind when the consumer realizes that he needs to buy. The paid search is then used for conversion, during the short window of opportunity in which the consumer is researching the different substitution options.
Home appliance brands were already well ahead of the market by incorporating the ecommerce before 2020, but the pandemic caused a change in the ecommerce of household appliances. According Euromonitor International, the ecommerce went from 23% of home appliance sales in 2019 to 32% in 2020, compared to 16% of the market as a whole in 2019 and 21% in 2020. Zenith expects home appliance brands to continue investing in ecommerce over the next few years, driving an average annual growth of 10% in its investment in digital between 2020 and 2023. Digital advertising will go from 55% to 57% of your advertising budgets during this period.
Television is still a vital channel for the construction of brand of household appliances, supplemented by outdoor advertising. Household appliance brands invest considerably more in these media than the average of the brands: in 2020 they invested 29% of their budgets in TV, compared to an average of 24%, and 7% in OOH, compared to 4%. Zenith expects home appliance brands’ outdoor ad spend to grow 8% annually between 2020 and 2023. Television, which suffers from the continuous migration of audiences to digital channels, will lag slightly behind, with an average annual growth of 6%.
“Given the growing interest in purchasing, the increase in the role of digital in the medium-short funnel and greater attention to offering direct-to-consumer experiences, appliance brands have never before faced such a market. demanding and complex “, has said Drew Erskine, Global Strategy Lead by Zenith.
The strongest ad growth occurs in India and Russia as consumers make more first-time purchases
Zenith expects home appliance advertising to grow with especially fast in India and Russia, which will grow at an average rate of 18% and 16% annually, respectively, between 2020 and 2023. Its rapid growth will be, in part, a reaction to its declines in 2020, which were much more pronounced than average, with a reduction in investment of 15% in India and 22% in Russia. But growth should remain strong after a rapid recovery in 2021, as rising personal incomes allow households to buy new types of gadgets for the first time.
Australia, Spain, the UK and the US also suffered big drops in ad spend from this category in 2020, so they are expected to enjoy a healthy recovery as brands reengage with the market. Zenith envisions a annual growth between 9% and 14% for these markets between 2020 and 2023.
The slowest growth is expected in Germany, Switzerland and Italy, where consumer demand is more thoughtful, with an annual growth between 0% and 4% in the advertising investment of the appliance sector between 2020 and 2023.
“Most of this growth is directed to digital channels to support the increase in e-commerce activity, but traditional media – such as television and abroad – will continue to be essential tools to maintain the massive awareness of the brand., ” has manifested Jonathan Barnard, Head of Forecasting by Zenith.
