Research: Marketing spend on PPC, TikTok and TV will rise in 2023, 57 CEOs reveal

In a challenging market, share of voice is critical to remain front of mind when consumers are shopping – and retailers are focused on diverse marketing strategies to make that happen. 

This was the overwhelming consensus when Retail Week interviewed 57 leaders across 54 retailers including Ikea, Waitrose, River Island and McDonald’s (see the full list below). 

The 11th edition of Retail Week’s annual report, Retail 2023, produced for the second year in association with Zebra Technologies, provides a critical strategic outlook on the year ahead and insight into the conversations happening across UK boardrooms. Read it for free here.

Digital marketing in sharp focus

Our research shows search engine marketing is the area in which the majority of retailers spend money as standard and will continue to do so in 2023.

When we asked which marketing outlets they spent any budget on, 86% of retailers said pay-per-click (PPC), while 84% said SEO. 

Instagram is used by 82% of respondents – the same percentage that uses email marketing – while Facebook makes up the top five, with 76% using it.

 

Sosandar co-chief executive Julie Lavington says: “Email marketing is our number one retention channel. It utilises our backgrounds in media to the best effect, giving us the ability to engage with customers daily. We have industry-leading open rates. Emails can instantly be adapted, meaning we have our finger constantly on the pulse.”

Digital marketing rules the roost, it seems, with digital display and YouTube both used by 65% of those surveyed.

 

TikTok has the momentum

TikTok grew significantly during the pandemic as people spent more time at home. Last year, 56% of the retailers we surveyed were putting marketing spend into the channel for 2022, but this year that edges forward with 63% investing in the platform next year. Further to that, 12% of retailers also say TikTok is the marketing channel that interests them most for 2023. 

Gymshark and Zara are among the brands with millions of followers on TikTok and they use it in different ways.

Gymshark focuses on videos depicting gym scenes their customers will relate to. Zara is more product-focused in its content while also broadcasting novel videos, for example showcasing new fashion campaigns, gift-card promotions or make-up routines to engage its target audience.

“I think TikTok is fun, it’s lively, it’s interactive and if you look at our younger consumers, it’s the channel that they’re using the most to communicate”

Paul Marchant, Primark

Marks & Spencer’s work on TikTok gained momentum in lockdown. Several of its stores have their own individual TikTok accounts and its Romford store went viral thanks to boy-band dance moves catching the imagination of the nation – so much so that it culminated in a Christmas 2021 song release to raise funds for charity.

The retailer has used TikTok to engage with the communities it is located in, with marketing director for M&S Food Sharry Cramond telling Retail Week in 2021 that the activity has made “celebrities” out of some of its staff, with customers visiting stores just to meet the people in the videos.

Paul Marchant, chief executive of Primark, says Instagram is the favourite social channel of the value chain’s audience, but TikTok is “the fastest growing”. 

“I think it’s fun, it’s lively, it’s interactive and if you look at our younger consumers, it’s the channel that they’re using the most to communicate,” he explains.

“TikTok, for me, is the most exciting channel for us right now.”

TV is still important

The most popular non-online form of marketing is TV advertising, which 43% of retailers said they will be spending on in 2023.

Sosandar co-chief executive Ali Hall explains: “Our plan for acquisition is to invest equally across TV, brochures and social media, with a small amount invested in digital marketing, such as Google Shopping and search.” 

Overall, the interviews suggest now is a time for experimentation with marketing channels, and finding the right mix of old and new formats.

 

Pandora UK managing director Rasmus Brix says: “If I am not on TV, I can see my traffic and my sales go down. 

“But whereas 15 years ago you could build a desirable brand via TV, you can’t anymore – you need something else. This is why I think influencers are kind of a supplement to what I call a baseline reach plan – because it’s difficult to break through and build positioning on a 20-second TV slot.” 

Seasalt chief executive Paul Hayes says: “We look at a wide spread of activities, but the [newer] ones that are interesting us at the moment are things like lifestyle influencers, social live shopping events, podcasts and video on demand.”

Want to find out more about the 2023 strategies of the 57 leaders? This is just the tip of the iceberg.