After plummeting at nearly twice the rate of the overall advertising marketplace in 2020, alcohol ad spending is forecast to marginally outpace overall advertising growth this year, according to a just-released category forecast from Publicis Media's Zenith unit.
"Alcohol advertising shrank nearly twice as fast as the overall ad market in 2020, falling by 11.6% compared to 6.4% of the market as a whole, Brand finances were squeezed by reductions in consumption volume, the average price per drink, and profit margins," Zenith Head of Forecasting and Director of Global Intelligence Jonathan Barnard writes.
The report, "Zenith’s Business Intelligence – Alcohol: Beer + Spirits," is based on the agency's analysis of ad spending trends in 12 major international markets accounting for 73% of global ad spending for the category.
"With bars, pubs and restaurants closed, consumers drank less alcohol, and bought the drinks they did consume from shops where they cost less, with a much lower mark-up. Brands cut back their marketing sharply to protect their bottom lines, and their combined ad spend fell from $7.6 billion 2019 to $6.7 billion in 2020," he continues, adding, "Brands are now bringing money back into the market as vaccine programs have consumers socializing in person again, and the hospitality industry has begun to reopen. But the return to normality will be slow, and alcohol ad spend will still be 8% below the 2019 level by the end of 2021, at $7.0 billion Zenith does not expect alcohol advertising to exceed the pre-pandemic peak until 2023, when it will reach $7.7 billion."
Zenith said the pandemic forced the "alcohol brand experience" online, which is also projected to accelerate the digital transformation of the category, which has been among the slowest to abandon TV in favor of digital media advertising.
Alcohol brands boosted their digital ad budgets 24% in 2020, and Zenith projects digital spending will rise 9.2% annually between 2019 and 2023 for the category. During the same period, Zenith projects alcohol brands will reduce their ad spending on TV a corresponding 2.4% annually.