Brits are spending more than ever on what excites them, but marketers are failing to follow the trend, a new study shows.
Magnetic, the consumer magazine marketing organisation, carried out research with Enders Analysis into what is dubbed the “passion pound”. This refers to consumer spending on “identity categories”: hobbies and passions, including fashion, travel, cars, sports, gardening and pets.
The study, as reported by Mediatel, found that average household spending on these identity categories was up from 47% of discretionary spending (spending after essentials, such as utilities and housing) in 2012, to 52% in 2017.
That amounts to an extra £2,642 a year for each household. Spending on other categories, meanwhile, was flat.
The research also found that Brits are happy about spending on their passions – more than half report feeling guilt-free. But while consumers are freely indulging their enthusiasms with extra cash, ad spend has not kept up the same growth.
Consumers spent 14% more in identity categories between 2015 and 2017, while advertising grew only 2% in the same categories. That was despite a general increase in advertising spending during the same period of 12%.
In fact, some categories’ advertising spend actually headed in the other direction. In fashion, it fell by 11%, while households spent 10% more; and cars saw a 1% fall in advertising spend, while households spent 24% more.
“The shift in spending – away from brand media to online direct-response channels – explains the decline in spend on identity categories and is directly related to the problem of short-termism in the advertising industry,” said Douglas McCabe, CEO of Enders.
“In this part of the market, identity is understood as a set of individualistic, rather than social, identifiers and attributes – a clear missed opportunity,” he added
Taking advantage of that requires an understanding of which media enable marketers to “reach customers as members of identity groups, rather than just as a target demographic”.
In this context, he argued, magazine media offer the "[most] natural fit with identity-based marketing".
Sourced from Mediatel; additional content by WARC staff