Alcohol ad spend will grow by 5.3% in 2021 across most of the world, ahead of the 4.9% growth of the ad market as a whole, as brands recover from a much steeper drop in 2020, according to new research from Zenith.
Alcohol advertising will grow roughly in line with the market, with 4%-5% annual growth in 2022 and 2023. In two years, alcohol ad spend will hit $7.7 billion, recovering from the $6.7 billion spent in 2020.
Although alcohol brands currently spend twice as much on television as the average brand, they will reduce their spending by 2.4% a year as TV audiences continue to shrink. In turn, these advertisers have pivoted rapidly to owned online content. Digital advertising will account for 30% of alcohol ad spend in 2023, up from 24% in 2021 and 21% in 2019.
“With the drop in consumers visiting restaurants and bars over the past year, alcohol brands had to quickly change their marketing strategy to focus on the at-home experience,” said Lauren Hanrahan, CEO of Zenith. “There was a big shift to ecommerce, and marketers found new ways to engage audiences through social media, video, influencer marketing and other digital channels. We predict brands will continue to increase their spend on not only digital but out-of-home, as people start to go back to bars and foot traffic increases.”
Out-of-home advertising will grow by 1.1% a year. Television’s declining reach makes out-of-home’s ubiquity even more valuable, states Zenith.
While alcohol brands are increasingly diversifying their media portfolios, spirits and beer brands are beginning to separate in terms of drinker demographics. Overall sales of beer and spirits are similar in magnitude, though spirit sales have been pulling ahead quickly, and are expected to continue to do so, reports Euromonitor International. In 2017, spirit sales were 4% ahead of beer sales, and by 2019 their lead had grown to 12%. Spirits sales are forecast to exceed beer sales by 23% in 2023. Spirits brands, notably, have not outperformed beer brands by selling any more product but instead have been more effective at persuading drinkers to “trade up.”
Zenith’s “Business Intelligence – Alcohol: Beer + Spirits” report tracks 12 markets — Australia, Canada, China, France, Germany, India, Italy, Russia, Spain, Switzerland, the UK and the U.S. — which between them account for 73% of total global ad spend.