Nearly half of businesses plan to expand their marketing teams this year
Over two in five (41%) businesses intend to expand their internal marketing teams in 2024, despite persisting economic uncertainty.
Digital marketing agency Impression surveyed 1,000 marketing professionals and almost three-quarters (73%) of them expect their businesses to grow this year.
While expectations for growth are strong, an increase in marketing budgets is not necessarily expected in line with this. Less than half (47%) of respondents say they expect marketing budgets to increase in 2024.
Brands are also directing their efforts and budget into bottom of the funnel activity. Almost three in ten (28%) of the marketers surveyed say their business is focusing their efforts on conversion and driving sales and leads, versus 26% who report their organisation is focused on driving brand awareness and attraction.
Around 20% say customer retention and loyalty is their biggest focus, with a similar proportion (21%) saying their businesses efforts are split equally between brand building, bottom of the funnel activity and retention.
Consistency between out of home and TV ads drives better effectiveness scores
Brands should aim to build consistency between their out of home (OOH) advertising and TV ads, suggests research from System1 and JCDecaux UK.
The research finds that out of home ads matching their TV counterparts perform twice as well on brand fluency, according to System1’s Test Your Ad platform, which looks at emotional responses to ads.
Out of home ads aligned with their TV equivalents score an average of 62% on two-second brand recognition, which measures the strength and speed of brand recognition, compared to 30% for OOH ads that didn’t align with TV creative.
OOH ads with TV counterparts also performed better on System1’s other measures, namely its star rating, which predicts the long-term brand building potential of an ad, and its spike measure, which predicts the ability of an ad to drive short-term sales.
Out of home ads matching TV counterparts achieved an average star rating of 3.1 stars and spike rating of 1.10 compared to 2.8 stars and 0.90 spike for assets that didn’t have a consistent creative thread.
Source: System1 and JCDecaux UK
Shop price inflation remains steady in December
The rate of inflation of shop prices remained steady in December. Shop prices last month increased by an average of 4.3% versus the same period last year, according to figures from the British Retail Consortium (BRC) and NIQ.
The figure is consistent with November when shop price inflation was also 4.3%. It is below the three-month average of 4.6%.
While shop price inflation overall remained steady in December, the rate of inflation on food prices decelerated to 6.7% in December, down from 7.7% in November. This marks the eighth consecutive month of slowing rate of inflation on food prices in shops. The shop price index measures changes in the price of 500 of the most commonly bought items.
Food price inflation is at its lowest since June 2022.
Promotional activity in food retail was at a four-year high at the end of 2023, suggesting that retailers are looking to appeal to price-conscious consumers.
“NIQ research showed that low price, quality and availability were the top factors for shoppers when planning where to do their main Christmas grocery shop this year so the further fall in shop prices will have helped shoppers celebrate the festive season,” says Mike Watkins, NIQ head of retailer and business insight. “But there was a lot of pressure on discretionary spend and price discounting was deeper and began earlier.”
Source: British Retail Consortium and NIQ
Shoppers willing to accept AI in retail journeys so long as it’s transparent
Over three in five (61%) shoppers are willing to accept retailers using AI so long as they are transparent about its use.
Indeed, over two in five (42%) UK shoppers are already aware of retailers using AI in their purchase journeys. Many consumers (45%) also report using generative AI tools, such as ChatGPT, in their everyday lives.
The area where shoppers believe AI would be of most use to them in their retail experience is in promotions. Over a quarter (28%) of shoppers say AI-powered pricing and promotions would enhance their retail experience.
While 14% of UK consumers say AI-powered chatbots could bring value to their buying journeys, a quarter (25%) say AI chatbots are the most disruptive AI application in their shopping experience.
Around three quarters of businesses struggle to maintain an innovative marketing strategy
Three quarters (75%) of businesses report struggling to maintain innovative marketing strategies, tactics and technology.
The biggest obstacle marketers are grappling with is how to access, organise and use customer data. This also plays a part in understanding and defining the target audience, which came second.
The research finds 59% of businesses have made budget cuts in the last year. It looks specifically at digital marketing budgets, finding that search marketing (34%) and content marketing (31%) are the biggest areas where businesses are making budget cuts.
Over two-thirds (67%) of businesses say the cost of living crisis has impacted how they do marketing.