Inflation puts a brake on the French advertising market

“Faced with economic clouds and inflation, the advertising market French is in decline at the start of 2023“, insists Christine Robert, deputy director of Irep. Over the first three months of the year, the advertising revenue net income from traditional media, i.e. radio, television, press, cinema and billboards, amounted to 1.4 billion euros, down 3.5% year-on-year , unveils the Unified Advertising Market Barometer (BUMP) on Thursday.

Soaring prices, tightening monetary policies, as well as the disruption of product supply chains around the world have prompted advertisers to exercise caution. It was the distribution, fashion (notably with the ultra-fast fashion brand Shein, which doubled its investments) and tourism-catering sectors that drove the market overall. Automobile players such as Renault, Nissan and Volkswagen, who had slowed down their communication last year, are once again back to the pot to promote their electric and hybrid vehicles. For its part, the favorite social network of young people, TikTok, has entered the ranking of new advertisers who invest the most in France. Conversely, financial establishments and players from the service or telecom sectors tended to curb their marketing expenditure.

Television and the press in decline

As the disappointing quarterly results of the giants TF1 and M6 foreshadowed, television is showing a heavy slowdown in investment. At 752 million euros, the medium is down 7.2% over one year and 8.3% compared to its pre-pandemic levels. The press, for its part, posted a drop of 4.1% over one year, to 309 million euros. And “a contained decrease of 13% compared to 2019», specifies Xavier Guillon, managing director of France Pub. The titles of the national daily press suffered a little more than those from the world of the regional daily press.

For its part, radio shows a positive dynamic (+ 1.2% over year one), and even exceeds 2019 (+ 0.2%), with 118 million euros in advertising revenue. ” In this period of inflation where the French seek to preserve their purchasing power, the radio benefits from the advertising made by the advertisers of the large distribution around the last minute promotions and other good deals on the products.explains Florence Doré, marketing director France media division of Kantar.

Strongly affected by the multiple confinements, billboards are picking up again and recorded a rebound of 5.9% over one year in the first quarter of 2023, to 251 million euros. Without, however, returning to its pre-crisis levels. The cinema is also starting to pull its head above water, but remains far (-25.9%) from its pre-crisis levels, with 17 million euros in advertising revenue.

Overall, advertisers are still spending more money (+4.1% over one year, to 164 million euros) on the online world of TV, press, radio and display (DOOH) media.

A mature digital market

“Today there is a certain wait-and-see attitude, we are talking about a slowdown in the market rather than a shift. One should not be alarmist looking at the first quarter of 2023, because the base effect (the first quarter of 2022) was very high“, believes Christine Robert.

Dominated by the trio Meta, Google and Amazon, digital advertising at the start of the year posted more modest growth than usual (+3%), with 2.2 billion euros invested in search, social and display in the first trimester.“We note that part of the market is globally reaching maturity, in particular because of a greater difficulty in following the path of Internet users online (“tracking”) and therefore in targeting them”says Xavier Guillon.

For the next few months, the sector is displaying measured optimism. In 2023, the global communication market (events, direct marketing, flyers, etc. included) in France should almost return to its 2019 level. , anticipates the BUMP. In the traditional media, investments should fall slightly (-0.8%), on the umption of GDP growth in France around 0.6% this year (in line with the forecasts provided by INSEE). “In order not to lose market share in this hectic period, advertisers will have an interest in maintaining their communicationconcludes Florence Doré.