As we approach the end of the year, 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.
The writing is on the wall: 2023 will be a rollercoaster for everyone involved in the housing market, including home goods advertisers.
With interest rates rising and the recession preventing people’s dream homes from becoming a reality, home sales are falling.
Here’s how that burst impacted ad strategies and what the ride may look like in 2023.
MediaRadar Insights on Home Goods Advertising in 2022
If home goods advertisers are worried about the uncertainty, their spending habits don’t show it.
While spending didn’t jump by a head-turning amount in 2022, increasing by just 5% YoY, home goods advertisers still spent more than $6b (an average of $549mm a month).
As the market continued its rapid descent, their resilience into Q4—spending in October increased by 16% YoY—could speak to how they’ll approach 2023.
Here’s another somewhat surprising development: More than 60% of the dollars from home goods advertisers went to traditional ad formats (46% to TV and 17% to print). Meanwhile, 38% went to digital, including YouTube and retail media.
As head-scratching as the traditional-heavy strategies may seem, they align with the shift from many consumer-facing brands.
While digital ad formats have been creeping into budgets for years, traditional formats are undergoing a revival as advertisers flee the crowded digital world and prepare for the future without third-party cookies.
In fact, a recent survey predicted traditional ad spending would increase by 2.9% in February 2022. To put that growth into perspective, spending on traditional formats decreased annually by 1.4% between February 2012 and 2022.
Driving this shift are brands that rely solely on online sales; their traditional ad spending is expected to increase by 11.7% over the next 12 months.
Strategy transformations aside, home goods advertising budgets will be under pressure in 2023.
Not only are home sales falling in the face of rising interest rates, but consumer sentiment is dropping—particularly for big-ticket items.
With consumers having less discretionary income and no reason to deck their homes out with new products, will home goods advertisers continue to spend in 2023?
All signs point to yes, but they’ll likely remain on the fence and respond to market conditions accordingly.
Top Home Goods Advertising Categories in 2022
Like most industries, a sizable portion of the ad dollars from the home goods industry came from advertisers in a few categories.
In this case, those categories were mattresses & bedding, furniture, and cookware & kitchen accessories.
Home goods advertisers in these categories spent nearly $1.55b through November.
Mattresses & Bedding
Advertisers for mattresses and bedding, which include linens, pillows, and toppers, invested nearly $632mm through November, representing a 9% YoY increase from 2021.
Most of this spending, however, came from advertisers promoting mattresses, including Sleep Number and Tempur Sealy. These two household names accounted for $284mm or 60% of the dollars from mattress advertisers ($476mm). Specifically, Sleep Number increased spending by 24% YoY, while Tempur Sealy did so by 3%.
The near-double-digit increase from mattress advertisers comes following sustained growth as people prioritized their sleep during the pandemic. As the global mattress market continues to grow, ad spending will follow.
New entrants will also force legacy players, like Sleep Number, to invest more in ads. Casper, for example, increased revenue by nearly 40% YoY in Q2 2021 as the bed-in-a-box trend continued to alter how people buy mattresses.
While mattress sales have remained steady and allowed advertisers to keep their campaigns live, they may need a reset in 2023.
Not only could diminishing consumer discretionary spending put a damper on mattress sales, but ongoing supply chain challenges will put these advertisers in a tough spot.
My Pillow also spent big in 2022, increasing its budget by 67% YoY. Nearly all of the company’s ad dollars went to TV ads.
The furniture market is estimated to reach $235b this year and grow at a 4.67% CAGR through 2027. Much of this growth comes from the living room segment—the largest segment by market volume—which is expected to reach $65.63b in 2022.
That said, ad dollars come from advertisers in other pockets of the furniture world.
Through November, the furniture advertisers making the biggest moves were those promoting bedroom furniture (up by 100% YoY), handmade furniture (up by 255% YoY), and children’s furniture (up by 415% YoY). Overall, furniture advertisers increased spending by 26% YoY.
Nearly a third of the spending came from those promoting Exemplis (X-Chair), La-Z-Boy, and Lovesac, which all increased budgets by at least 11% YoY.
Spending from these advertisers comes in the wake of both business and market forces.
Exemplis, for example, is spending more on the heels of several acquisitions, including the purchase of Edloe Finch, a Texas-based eCommerce retailer.
For Lovesac, spending comes in tandem with explosive growth; the company grew net sales by more than 55% in 2021. Part of Lovesac’s media mix included a unique partnership with Disney+, allowing consumers to “experience Disney+ streaming and StealthTech product demos in Lovesac showrooms and Lovesac’s Best Buy shop-in-shop locations.”
Finally, a jump in birth rates likely played a role in La-Z-Boy’s 209% YoY increase, much of which went to promote its JoyBird Furniture brand primarily via TV ads.
La-Z-Boy’s ad strategy will likely continue to evolve in 2023 with a new go-to-market focus on retail—a switch that’ll undoubtedly warrant ad spending.
Other baby and kid advertisers also benefited from Baby Boom 2.0.
Cookware & Kitchen Accessories
Advertisers of cookware and kitchen items increased spending by 73% YoY to $297mm.
Sixty-five percent came from cookware advertisers ($194mm), including E. Mishan and Sons, Lagom Kitchen Company, and Made In Cookware, who accounted for 69% of the spending.
That said, advertisers for E. Mishan and Sons were the only ones to increase their budgets, doing so by 132% YoY. Meanwhile, advertisers for Lagom Kitchen Supply and Made In Cookware spent 36% and 4% less, respectively.
While advertisers for E. Mishan and Sons were the only ones to spend more in 2022, others, including Lagom Kitchen Supply and Made In Cookware, should be in a position to spend in 2023.
Consumers are dining out more, but the recession will put a damper on nights out on the town.
According to a recent survey, 77% of consumers are “moderately” or “very” concerned about inflation and the increased cost of living. Soaring food prices, which increased by the largest amount since May 1979, will cause even more unease.
That said, the lesser of two evils—eating out or dining in despite the increased cost of groceries—will likely see more people eating at home.
As a result, advertisers for cookware and kitchen accessories, including Home Tech Innovation (Suvie), who upped their investment by 100x in 2022, should keep spending.
Home Goods Advertisers Are At the Whim of the Housing Market
The housing market is a fickle beast, and home goods advertisers know that.
But if 2022 has taught us anything about the mindset of home goods advertisers, it’s that they don’t back down in the face of economic headwinds.
While those headwinds may lessen in 2023, they’re not going away, and neither should the home goods advertisers. Our recommendation would be to prepare to spend, albeit in more reserved ways that follow the roller coaster of the housing market.
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