To understand ‘Which 50%’ of your marketing spend is working, it’s important to know the trends which impact customer behaviour.

This week PwC released its annual industry forecasting report into consumer and advertising spend in the Australian Entertainment & Media Outlook for 2021-2025.

Examining the outcomes across 12 different segments, the firm introduced a range of forecasts aligned to a positive, gradual or negative COVID-19 recovery, as opposed to a single forecast.

While some of the outcomes were expected, there were a few glimmers of hope amongst the rubble of 2020.

Filmed Entertainment took the biggest hit, followed closely by Out-Of-Home spend, down 41 and 39 per cent respectively.

Not surprising with the massive shift of audiences to online, Internet Advertising jumped 3.3 percent to AU$9.3 billion in 2020.

Overall, total Australian advertising spend contracted by -8.0 per cent to AU$15.4 billion, and consumer spend dropped by -1.9 per cent to AU$42.5 billion.

Balance of Power

The report identifies five key disruptions to the balance of power as a result of the seismic shift in consumer behaviour.

  • Macro shifts powered by sustained digital disruption – consumers will now pay for digital access to what they want, making businesses rethink the ad-supported model
  • Control shifts power to the consumer – with wider choice of options competing for consumer’s time and money, the customer experience became paramount (see ‘transference of expectation’)
  • Creative shifts puts content creators in the driver’s seat – the gap has gotten smaller between the creators and their audiences, fragmenting attention
  • Location shifts mean anywhere, anytime – the control over where to consume is now up to the customer and the experience had better be consistent
  • Regulatory shifts as the focus on market power, privacy intensifies – the attention of the world is on Australia’s regulators with influence and fairness changing the way we distribute and share media

Another shift in advertising spend explored earlier this week has been the emergence of retailers as a new avenue to access customer attention, building out their brand offerings to attract new and bigger budgets from advertisers.

Another winner identified in the report has been gaming and it’s competitive arm, esports.  The sector was recorded at AU$3.41 billion in 2020, with esports alone expected to experience a compound annual growth rate of an impressive 21.2 per cent, reaching over AU$15M by 2025. Mobile gaming makes up approximately one-third of that market revenue.

Chris Smith, founder of esports consultancy Big Esports out of Melbourne wasn’t surprised by this announcement. “I’ve said it so many times and I’m saying it again – Esports is an exciting and growing sector of the entire video games industry. As you can see by this report it’s currently 1.9 per cent of the AUS market, but its compound annual growth rate of 21.2 per cent dwarf’s overall video game CAGR of 7.5 per cent.”

However, not all sectors of the industry think the numbers are reflective of the real growth on offer in the sector. Ryan Cunningham is the founder of You Know Media, a media agency which represents a broad range of gaming and esports sites as well as professional tournaments in Australia.

“After looking at the total revenue (PwC) estimate for esports (AU$6 million) and their sources, I don’t see this as very credible.” said Cunningham. “I can already account for over $6m in esports in 2020 without having talked to 50 per cent of the parties involved.”

“I read through all of the ACCC articles they reference and it only references Epic Games and Microsoft’s annual report, neither of whom ran (much) esports in Australia in 2020.”

Whatever the case, the fundamental shift has changed the way we access and consume entertainment and media which will resonate through the effectiveness of marketing for years to come.

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