• by Maarten Albarda , Featured Contributor, December 6, 2024

Ebiquity, in association with the World Federation of Advertisers, has conducted research among global advertisers to understand how budgets and investments in media might evolve in 2025.

And the message from advertisers is clear: it is all about performance marketing. In terms of numbers, almost half of North American advertisers predict that their budgets will remain flat in 2025 vs 2024, and 25% predict a decrease of some sort. Within the mix of advertising, 42% of advertisers state that they intend to increase their spending in favor of performance marketing vs brand advertising. The optimist could state that, conversely, this means that 58% of advertisers are NOT planning to increase their performance marketing budgets.

But… (you knew there was going to be one, right?): of those marketers increasing performance marketing, almost half do so within a flat overall marketing budget, meaning they are taking money from other touch points to fund their performance increase. The majority are moving budget from linear TV and print in favor of CTV and retail media.

I am surprised to see that advertisers are decreasing their print spending. What print spending was there left to begin with? CTV does not come as a surprise of course, as most advertisers seem to be shifting dollars from “traditional” TV to addressable and connected TV. Advertisers believe that streamers and connected platforms in TV land are the better alternative to linear TV. An increase in CTV of 78% is predicted.

The second fastest growing medium is retail media (+75%) -- that is, the platforms run by the likes of Instacart, Walmart, Kroger, etc. And in fairness, it is no longer the domain of just groceries anymore, as all forms of retail are seeking ways to monetize the data they have on their customer base.

Now, the optimist could state that less than half of advertisers (42%) are following this performance marketing shift. But the quoted statements from study respondents are perhaps more indicative of the seismic shift taking place: “We will shift investment from strategy to activation,” “Short termism still dominating the investment discussions” and “Budget is being focused more and more into short term gains.”

Until not too long ago, many industry pundits would point to work from advertising effectiveness gurus such as Les Binet, Peter Field, Karen Nelson-Field or renowned institutes such as Ehrenberg-Bass or Kantar. Their findings suggested (massively simplified) that long-term, brand-building advertising beats short-termism in terms of lifetime brand value and return on marketing/advertising investment. And linear TV in combination with other touch points was best suited to deliver these results. But that research was conducted at a time when there wasn’t this massive short-term, performance focused share of advertising budget.

I believe it is time that we, as an industry, rethink and reset our beliefs about brand advertising and its effectiveness. Marketers clearly are making a different choice opposed to what the data and beliefs to date suggested. So it is in this new context that we need to restart tracking and indexing brand effects linked to advertising investment choices. Let’s understand what the impact of all this performance media and performance marketing investment has on brands.