At the recent Cannes Lions International Festival of Creativity, IAB Europe member S4M, the Drive-to-Store specialist, announced the results of the first worldwide study dedicated to the share of drive-to-store advertising investment.
Commissioned as an independent drive-to-store advertising research study from IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions with over 15 years of advertising-sector expertise, the study, The State of Drive-to-Store Advertising 2019, shows that the worldwide share of drive-to-store investments for retailers will reach €55Bn. in 2019 – 58% of the total advertising spend for the industry. This investment is expected to reach 65% by 2023, or €75Bn., a 36% growth driven by digital-to-store spending.
While many studies by media, format or method of purchase already exist, The State of Drive-to-Store Advertising 2019 is the first research study that assesses the size of the advertising market across all types of media from a drive-to-store campaign perspective. The study surveys 400 advertisers from all retail sectors in support of the market data and forecasts generated by IHS Markit.
Key figures showed:
Finding 1: Drive-to-store growth is led by digital
Generating in-store traffic has always been one of retail’s main goals, and advertisers are dedicating an increasingly greater part of their advertising strategy to it. Indeed, the world retail advertising market will reach €113Bn. by 2023, by which time more than half will be attributed to drive-to-store. This growth is strongly led by the digital-to-store, the leading media used by retailers to increase the number of in-store visits. As a matter of fact, in 2023, digital will represent 68% of worldwide drive-to-store spend as opposed to 54% in 2018.
Finding 2: Advertisers are increasingly looking for activations that can be measured and optimized in real time
The rise of digital-to-store can be explained by a growing demand for effective and measurable solutions. These new innovative solutions are a result of the staggering growth in mobile use and its technical specificities, especially when it comes to geolocation data, which enables brands to bridge the gap between the online and offline world. Therefore, the drive-to-store media mix will evolve tremendously in the coming years, led by mobile and social media, which are considered the two highest performing media channels to generate traffic in points of sales by the advertisers surveyed. Incidentally, by 2023, mobile will become worldwide retailers’ favorite channel, with the study forecasting that they will allocate 26% of their drive-to-store advertising spend to it. In comparison, the study forecasts that, overall, these same retailers will spend just 7% of their drive-to-store budget on press, 6% each on leaflets and radio and only 4% on Out-of-Home. Despite these figures, retailers will continue to use traditional media in their media mix to attract consumers to stores. They will, however, turn more heavily to digital solutions like on-demand TV, programmatic audio, and digital out-of-home.
Finding 3: Retailers want to measure the concrete impact of their drive-to-store strategy in stores, giving up more traditional media KPIs
The study shows that advertisers who set up a drive-to-store strategy are mainly looking for ways to measure the concrete impact generated in their points of sale. This way, the number of visits, particularly incremental visits, and sales in stores are the first key performance indicators (KPIs) mentioned by advertisers as a way to measure the impact of their drive-to-store strategy. Traditional media KPIs such as reach, repetition, click-through rate and impressions rank last.
Finding 4: Some sectors are more inclined to Drive-to-Store
Overall, there are significant levels of drive-to-store adoption among all retailers. However, levels of adoption vary from one country to another, which is why it is important to look at particular market dynamics. This is reflected by the Automotive industry which, although leading global drive-to-store spend in terms of revenue with over €20 billion by 2023, does not always come first in terms of shares country-wise. Notable country-specific trends include the strong performance of the Restaurant industry in France and CPG in Italy, where both will have more than a 95% share by 2023, far ahead of Automotive.
By 2023, three industries will stand out from the rest to lead the worldwide drive-to-store market. Automotive will come first (28%), followed by Grocery (26%) and Restaurant (19%), which will complete the triumvirate. When it comes to performance, digital media will drive growth across the retail ad market with a 66% share by 2023, up from 58% in 2018, with a focus on mobile. Indeed, the latter will grow its share of the drive-to-store market to reach 26% in 2023. However, social will be the fastest mover, doubling its share over the same period, going from 10% to 20% by 2023.
To access the full study, click here: The State of Drive-to-Store Advertising 2019