As we kick off 2023, we’re covering trends from key markets in 2022. We’ll recap the state of each industry over the past year, the ad strategies of its biggest players, and what we predict 2023 will hold.
What do the cost of eggs and agriculture ad spending have in common?
They’re both going up.
Despite supply chain disruption, uncertainty overseas, inflation, and a recession putting consumers between a rock and a hard place, agriculture advertisers are still spending. But they may not be doing so how you’d expect.
Here’s a look at agriculture advertising through November, what it means about the industry, and what may be in store in 2023.
MediaRadar Insights on Agriculture Advertising in 2022
Through November, agriculture advertisers spent more than $153mm on ads, representing a 7% YoY increase compared to the same time in 2021.
Seventy percent of those ad dollars went to print (48%) and TV (22%). The remaining 29% went to digital media.
That media mix may seem surprising in a world where most advertisers celebrate the efficiency and measurability of digital. But it speaks to the traditional business model on which the agriculture industry sits.
While online marketplaces may gain steam in the future, direct selling is still the norm, so agriculture advertisers don’t need to rely on digital ads’ conversion and measurement powers.
Instead, they can use them as supplementary pieces to build awareness before closing deals in person. It’s different, but it works and likely will stay the same in 2023.
Allocation aside, much of the overall increase in spending came in Q1 when budgets jumped by 49% YoY to $45mm. A 13% YoY rise in Q3 helped as well.
The rest of the year, budgets fell. In Q2, spending dropped by 4% YoY, while October and November fell by 21% and 25%, respectively.
While the ebbs and flows are somewhat dizzying, the spending levels are fairly even in back-to-back years. The front- and back-heavy spending could point to some seasonality in spending and how ad strategies will look in the coming months.
Top Agriculture Advertising Categories in 2022
Nearly all spending from agriculture advertisers in 2022 came from those in five categories: agriculture/farming equipment, general agriculture/farming, hybrid seeds, seeds, and industrial tractors/mowers/UTVs.
Advertisers in these categories combined to spend $124mm, or 81% of the industry’s investment.
Advertising for agriculture and farming equipment increased by 78% YoY through November, making it the industry’s top-spending category (more than $65mm).
The top spenders were AGCO Corporation (up by 23% YoY), John Deere (up by 250% YoY), and Kubota Corporation (up by 104% YoY). Advertisers for these companies combined to spend 72%, or $47mm of the investment from agriculture and farming equipment advertisers.
While Kubota’s triple-digit increase is nothing to brush off and points to a successful year—revenue increased by 14% in H1—spending lagged considerably behind John Deere. In fact, advertisers for John Deere spent 8x than those from Kubota.
For these advertisers, spending comes at a time of growth.
Despite global uncertainty directly impacting their business, the agriculture equipment market was valued at $156b in 2021 and is expected to grow by a CAGR of 5% through 2029.
That said, these companies are shifting their go-to-market strategies in tandem with the evolving needs of their buyers.
For example, 50% of farmers want to try new products and technology to improve their operations.
The demand for innovation is why John Deere and others are innovating faster than ever.
John Deere, for example, is attending CES this year to promote its robotics-based fertilizer systems and new eclectic excavator. The industry mainstay is also betting on satellites “to create a geospatial map that farmers can use to better track productivity and the performance of crops.”
At the same time, Kubota announced the grand opening of an R&D Center.
As we progress through 2023, advertisers will push these products heavily as buyers look to make sense of the post-pandemic world.
Buyers have also made it clear that their loyalty is up for grabs—nearly 30% of large farmers say brand loyalty is less of a priority than it was five years ago—which will encourage even more spending.
Tractors, mowers, and utility vehicles
Despite agriculture and farming equipment advertising getting a boost in 2022, tractors, mowers, and utility vehicles (UTVs) got the opposite.
Through 2022, advertisers for these products decreased spending by 40% YoY. Spending continued to fall in November, dropping by 38% MoM.
The advertisers driving this category—pun intended—were Daedong Industrial Company (Kioti), John Deere, and Kubota. Advertisers from Kubota were the only ones to increase spending, albeit by just 4% YoY. Meanwhile, Daedong and John Deere decreased spending by 22% YoY and 52% YoY, respectively.
It’s worth noting that while tractors, mowers, and utility vehicles got less attention from advertisers, that doesn’t mean the companies promoting them are in peril.
John Deere, for example, posted record numbers in 2022 and spent plenty to promote other products in its catalog, namely, equipment.
Advertisers for seeds increased spending by 10% YoY to more than $31mm, thanks to investments from Bayer AG, Land O’Lakes (Winfield US), and the State Council of the People’s Republic of China.
Interestingly, advertisers for Land O’Lakes were the only ones to increase spending in 2022.
Through November, advertisers increased spending by nearly 630% YoY, with 99% of that investment going to print.
Meanwhile, advertisers for Bayer AG and the State Council of the People’s Republic of China decreased spending by 20% and 26% YoY, respectively.
The discrepancy in spending among advertisers in the same category illustrates that there’s no one-size-fits-all strategy. It also presents an opportunity for advertisers to increase their investments while others pull back.
It could also push advertisers to promote other products, like hybrid seeds, which are receiving a hefty chunk of change as they become popular in the wake of a decline in usable land, diet diversification, and a quest for higher yields.
Top spenders for hybrid seeds included Corteva Agriscience and Beck’s Hybrids, which combined to spend more than $10mm or 35% of spending from seed advertisers.
As the market for hybrid seeds grows, other players, like Biostadt India Limited and Crystal Crop Protection, will likely spend big to gain a share of a market expected to reach $52.33b by 2030.
General agriculture and farming
Finally, spending from general agriculture and farming advertisers decreased by 7% YoY to $10.4mm. That said, there was a 77% MoM uptick in November to $1.2mm, which could point to their mindset as they progress into 2023.
Two of the category’s biggest drivers were Nutrien Ltd., which invested almost all of its dollars (86%) in print, and 360 Yield Center. Advertisers for these two companies contributed 26% of the category’s ad spend.
Innovative Products, Traditional Advertising
Despite global uncertainty, the proverbial head of the agriculture industry is holding high.
In fact, one study found that most farmers are optimistic about the future, and 60% expect profitability to hold steady or increase over the next two years.
Ad spending will follow, but the strategies will differ from the digital-first norm.
While the agriculture industry is no stranger to innovation, the old-school relationship between buyers and sellers remains.
For that reason, traditional ad strategies will likely continue to dominate in 2023.
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