Inflation puts a brake on the French advertising market

"Faced with economic clouds and inflation, the French advertising marketis in decline at the beginning of 2023," says Christine Robert, deputy director of Irep. Over the first three months of the year, net advertising revenues from traditional media, i.e. radio, television, press, cinema and billboards, amounted to 1.4 billion euros, down 3.5% year-on-year, revealed Thursday the Unified Advertising Market Barometer (BUMP).

Soaring prices, tighter monetary policies, and disrupted product supply chains around the world have prompted advertisers to be cautious. The distribution, fashion and tourism and catering sectors drove overall investment. For its part, the favorite social network of young people TikTok has entered the ranking of new advertisers who invest the most in France.

Television and the press in decline

As predicted by the disappointing quarterly results of the giants TF1 and M6, television is experiencing a serious slowdown in investments. At 752 million euros, the media is down 7.2% year-on-year and 8.3% compared to its pre-pandemic levels. The press, for its part, shows a decline of 4.1% over one year, to 309 million euros. And "a contained decline of 13% compared to 2019," says Xavier Guillon, CEO of France Pub. The headlines of the national daily press suffer a little more than those from the world of the regional daily press.

For its part, radio posted positive momentum (+1.2% year-on-year), and even exceeded 2019 (+0.2%), with €118 million in advertising revenue. "In this period of inflation when the French are seeking to preserve their purchasing power, the radio is taking advantage of the publicity made by supermarket advertisers around last-minute promotions and other good deals on products," explains Florence Doré, marketing director France Kantar's media division.

Strongly affected by the multiple lockdowns, billboards are recovering and recorded a rebound of 2023.5% year-on-year in the first quarter of 9, to €251 million. Without however returning to its pre-crisis levels. The cinema is also starting to get its head out of the water, but remains far (-25.9%) from its pre-crisis levels, with 17 million euros in advertising revenue.

Overall, advertisers are spending more and more money (+4.1% year-on-year, to €164 million) on the online universe of TV, press, radio and out-of-home media (DOOH).

A mature digital market

"There is now a certain wait-and-see attitude, we are talking about a slowdown in the market rather than a downturn. We should not be alarmist when looking at the first quarter of 2023, because the base effect (the first quarter of 2022) was very high, "says Christine Robert.

Dominated by the trio of Meta, Google and Amazon, digital advertising posted more modest growth at the beginning of the year than usual (+3%), with €2.2 billion invested in search, social and display in the first quarter. "We see that part of the market is maturing overall, in particular because of a greater difficulty in following the path of Internet users online ("tracking") and therefore to target them," says Xavier Guillon.

For the coming months, the sector is cautiously optimistic. In 2023, the global communication market (events, direct marketing, flyers... included) in France should almost return to its 2019 level, anticipates the BUMP. In the traditional media, investments are expected to decline slightly (-0.8%), assuming French GDP growth of around 0.6% this year (in line with forecasts provided by INSEE). "In order not to lose market share in this turbulent period, advertisers will have an interest in maintaining their communication," concludes Florence Doré.