US brand activation revenues are on pace to grow at an accelerated 6.5% rate to $337 billion in 2016, which would be the fifth consecutive year that brand activation outperformed the broader advertising & marketing sector, according to new data released today by PQ Media
US brand activation operator revenues are on pace to grow 6.5% to $337 billion in 2016, which would mark the fifth consecutive year that brand activation outperformed the broader advertising & marketing sector, according to new data released today by PQ Media. Based on pacing data through the first half of 2016, brand activation revenues would end 2016 with accelerated growth for the fourth time in the past five years.
Brand activation revenues are projected to grow at a compound annual rate of 6% in the 2016-2020 period, reaching $421 billion and besting overall advertising & marketing growth in each year of the period, according to the US Brand Activation Marketing Forecast 2016, the first annual benchmark study of this dynamic sector by PQ Media in collaboration with the ANA (Association of National Advertisers).
Placing brand activation in the context of the broader advertising and marketing economy, the new Forecast was designed to be the first credible, comprehensive and consistent source of market intelligence covering the expansive waterfront of brand activation. As such, the report draws on PQ Media's extensive market research that underpinned several groundbreaking studies that were the first to define, size, segment and forecast "below the line" media channels, such as content marketing, branded entertainment and digital out-of-home advertising.
As a result, the study provides the first set of detailed industry definitions and segmentation by brand activation marketing platform, channel, end-user sector and brand vertical. In addition, the Forecast examines the sector from two economic vantage points: media operator revenues generated by companies executing outsourced brand activation activities; and in-house brand marketer spending, such as investments related to producing television commercials, the value of redeemed coupons and free samples, and slotting fees brands provide to retailers for preferential shelf treatment.
For consistency with its other market research publications, PQ Media focuses on operator revenues here, such as the data reported above. From the brand marketer perspective, spending on brand activation campaigns increased 5.5% to $244 billion in 2015, with pacing data through the first half of 2016 indicating US brands would increase their investments by 6% for the full year, according to the US Brand Activation Marketing Forecast 2016.
Noting that media options have tripled over the past 40 years, leaving media buyers with more than 200 choices today, the report emphasizes that disruptive and transformational technology and data-related trends are heavily impacting the media buying process. Meanwhile, consumers are spending more time with media, but they're less engaged with marketing messages due to the rapid growth of smart-tech products and mobile media, consumer adoption of ad-skipping devices, increased media multitasking, and the growing consumption of media outside the home.
"Ultimately, the goal of this important project was to shine a spotlight 'below the line' to educate advertising and marketing industry stakeholders about the opportunities that exist among so-called unmeasured media," said PQ Media President & CEO Patrick Quinn. "The industry is scrambling to devise more effective omnichannel campaigns in an effort to better engage increasingly elusive American consumers. One of the key objectives of brand activation marketing is to create emotional connections with target audiences that will drive brand loyalty."
The study breaks down brand activation into six broad platforms, each of which has a unique characteristic in the manner it attempts to engage audiences. For example, influencer marketing targets opinion leaders. These platforms are further divided into 32 channels, which are the various distribution methods used to reach target audiences.
Relationship marketing is the largest of the six brand activation platforms with operator revenues expected to hit $140 billion in 2016. Content marketing, including branded entertainment, is the fastest growing platform as revenues are surging toward an 11% gain this year. Of the 32 channels, customer service & telesales is the largest with revenues projected to top $28 billion, while mobile marketing apps & proximity services is the fastest growing, as growth is forecast to exceed 35%.
The report also examined brand activation marketing by 21 brand verticals, indicating that the largest categories by operator revenues were retail, financial, automotive, travel and food, with retail capturing an 11% share of total brand activation revenues in 2015. Analyzing brand activation revenues by end-user sector, PQ Media found that consumer marketing messages command 63% of the total, while business-to-business accounts for 37%($126 billion).
For the purposes of this complex study, PQ Media licensed datasets and analytics to the ANA from various PQ Media research publications, including the annual Global Media Intellicast Series 2015-19, a three-report series covering the entire consumer-facing media economy with three individual reports focused on advertising & marketing revenues; consumer time spent with media; and consumer spending on media content & technology. To download a free executive summary, sample datasets or to purchase the US Brand Activation Marketing Forecast 2016, click through any of the report-specific hyperlinks above.
PQ Media is a leading provider of actionable competitive intelligence and strategic guidance to management teams of the world's top media, entertainment & technology organizations. PQ Media delivers intelligent data and analytics to high-level executives to empower them to make smarter, faster business decisions amid the transforming global media & technology ecosystem.
The ANA provides leadership that advances marketing excellence and shapes the future of the industry. Founded in 1910, the ANA's membership includes nearly 700 companies with 10,000 brands that collectively spend over $250 billion in marketing and advertising. ANA also includes the Brand Activation Association, which operates as a division of the ANA.