Home appliance ad spend surges on the back of home improvement trend

Home appliance boom

• Consumers are splashing out on cookers, washing machines and dishwashers like never before after prioritizing home improvements with money saved from socializing and holidays.

• This has propelled the sector ahead of advertising as a whole in 2021, with a further 6% annual growth rate for home appliance spend projected through 2022 and 2023.

• Home appliance brands are reaping the rewards of this shift in priorities with their collective advertising expenditure jumping from £3.4bn in 2020 to £3.5bn in 2021 – far ahead of the £3.5bn spent in 2019 and with better results still to come in 2023, when the figure should hit £4.4bn.

Digital drives demand

• In common with most sectors, digital will power the bulk of this growth, increasing its share of home appliance ad spend from 55% in 2020 to 57% in 2023 in the process.

• In turn, brand building and e-commerce are driving 10% annual growth in digital ad spend, predominantly in online video, native advertising and social media.

• In particular, paid search has been a focus for brands as they seek to reach consumers in the short window between product failure and any replacement purchase.

• Home appliance brands have been quick to seize the opportunities of e-commerce, rising rapidly from just 23% of sales in 2019 to 32% in 2020. This outpaces the market as a whole, where e-commerce penetration stood at 16% and 21% respectively.

Television holds its own

• Amid this digital focus, television still holds sway as an important brand-building channel, with home appliance brands allocating 29% of their marketing budgets to the medium in 2020 and 7% on out-of-home (OOH), outpacing the market as a whole where the equivalent figures were 24% and 7%.

• Looking ahead, Zenith expects OOH spending by home appliance brands to grow at 8% per annum through to 2023, outpacing television on 6% growth per year.

India and Russia emerge as kitchen superpowers

• While mature markets remain relatively sedate, consumers in Russia and India are driving the sector forward with first-time purchases, hitting growth rates of 18% and 16% a year between 2020 and 2023.

• This strong paper performance must be set against steep declines of 15% and 22% during the pandemic.

• By contrast, the slowest growth rates are expected in Germany, Switzerland and Italy, where annual growth in home appliance ad spend will be no more than 4%.

In Zenith’s own words

• Zenith UK business director Tommy Wong said: “Ad spend was down last year as some advertisers struggled to keep up with demand, and therefore scaled back spending.

• “The good news is we have seen a recovery this year: spends in 2021 to date have been approximately 36% higher than that seen in 2020 over the same period. We expect this to continue as the housing market continues to be buoyant. However, short-term supply and logistical challenges may continue to impact the market.”

• Jonathan Barnard, head of forecasting at Zenith, said: “In most markets, the increased appetite for home improvement is incentivizing home appliance brands to step up their communications activities substantially.

• “Most of this growth is going to digital channels to support increased e-commerce activity, but traditional media such as television and OOH will remain essential tools for maintaining mass brand awareness.”

• Earlier this summer Zenith, part of the Publicis Groupe, projected UK ad spend would grow 13.5% in 2021 to exceed pre-pandemic levels.