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December 1, 2021
BUSINESS BUSINESS COMPANIES ECONOMY EDITORIAL INDUSTRY OP-ED OPINION POINTS OF VIEW

Zenith Study: The impact of short form spots vs. long form spots on beer sales

  • Beer sales in Romania are expected to resume growth and reach in 2022 the 2019 level, after falling by 16% last year, in the context of the pandemic restrictions;
  • The main player in the beer market increased its TV exposure by 65% ​​last year, as well as the visibility share in its segment from 15% to 24%, amid the withdrawal and reduction of advertising budgets of direct competitors;
  • However, at the market level, producers’ TV adspend has decreased in recent years and has focused on short spots, which have a higher return on investment over long spots.

Beer sales in Romania are expected to resume growth, after falling 16% last year amid restrictions. In parallel, a new Zenith study shows that beer producers tend to invest less in TV communication in recent years, preferring short spots, which are 20% more efficient in terms of return on investment. The study “Long Form vs Short Form Spots Impact in Sales” analyzes the effect that short spots have compared to long ones on beer sales, being the first in the Zenith ROI Whitepapers series, which includes analyses useful for optimizing media and communication strategies.

“Beer continues to be the most consumed alcoholic beverage in Romania, benefiting from a strong tradition and the support of international players. Consumption usually increases by 40% during the summer and will be boosted by the EURO 2020 competition, after a period in which the market has undergone important changes. Sales slowed just before the pandemic, and beer producers’ investments in TV advertising fell and focused on short, more ROI-efficient commercials,” explained Raluca Zancu, Consumer & Business Insights Lead, Zenith.

 

The beer market in Romania

 

According to Euromonitor, in 2019, beer sales recorded the lowest growth rate in the past 5 years, of 1%. Then, in 2020, they went down 16% compared to the volume recorded in 2019, amid public health restrictions that included the closure of the HORECA industry and the restrictions on the movement of persons. The most dramatic decline was in April-May 2020, during the state of emergency, when sales reached only three quarters of the volume recorded in the same period last year.

Lager beer has continued to be the most sold and consumed by Romanians in recent years, all major brands on the domestic and international markets being represented locally. However, Euromonitor estimates that sales of non-alcoholic beer and dark beer are the ones that will record the largest increases by 2025 (with an annual average of 6% in 2019-2025), while for the blonde beer segment – which has the largest share in sales – only a 1% increase is expected compared to the level of 2019.

The market is expected to recover to the 2019 level in 2022, after robust year-on-year growth. At the same time, the total volume of beer consumed is estimated to reach 1.9 billion liters in 2025.

 

Beer producers’ TV adspend

 

If beer sales remained on an upward trend until 2020, the segment’s TV adspend evolved in the opposite direction, in 2019 registering a decrease of 21% of the Gross Rating Points[1] compared to 2018, according to the Zenith study.

However, the main player in the beer market increased its TV exposure by 65% ​​last year compared to 2019, as well as its visibility share in the segment from 15% to 24%, amid the withdrawal and reduction of advertising budgets of direct competitors. The increase in visibility was also reflected in the advance by 2 percentage points of its market share, which explains the decrease of approximately 77% in the market shares of the two main major competitors. The only brands that improved their market share in the context of declining investment in TV advertising were brands with market shares below 3%.

 

Beer on TV: Short spots versus long spots

 

Against the background of excess demand, the advertising market has increasingly resorted to communication with short spots. In 2019, a quarter of the total GRP purchased in the entire TV market were generated by the communication with short spots of the beer segment. The exception is 2020, an atypical year, in which some companies limited their communication even in the summer season.

The Zenith study reveals that long spots are 1.68 times more effective than short ones in increasing the volume sold. However, because they are, on average, twice as long – which means doubling costs in the absence of length corrections – they are also 20% less efficient than short spots in terms of return on investment (ROI).

 

About the methodology

 

The analysis was performed on monthly data from the last four years. The variation effect of the change in sales volume was removed by maintaining 2019 as the base year. In the same sense, each month was considered to have a duration of 4 weeks. The TV campaigns were divided according to length for each brand in the Top 20 by market share and GRP per month was calculated for each length of the spot.

The study was conducted by Zenith in collaboration with the Data Intelligence team within Publicis Groupe, which has expertise in various areas, from consumer studies to econometric modeling and which can develop a diverse range of products and analyses with strategic utility.

The study was based on the following sources: Market Vector, Euromonitor și Kantar Media.

[1] Gross Rating Points (GRp) is the standard measurement unit in TV advertising. One GRP means 1% of the total target population has been exposed to the ad message.

 

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