Summits Yellow

Industry reacts: Q1 2019 IPA Bellwether Report

Tyrone Stewart

With the release of the latest IPA Bellwether Report highlighting a surprise increase in marketing budgets in Q1 2019, senior executives from the industry give their thoughts on it all.

City of London WestminsterSue Hunt, chief revenue officer at VIOOH
“There’s no denying the economy is labouring through a tough stretch and as a result we are seeing advertising budgets being cut or pushed back.

“But at the same time, we are seeing a revival in "traditional" media that is perhaps a reaction to the duopoly stronghold and continued trust crisis around brand safety for advertisers investing in digital channels.

“Interestingly, Zenith’s global ad spend forecasts for 2019 predicts that out of home (OOH) will experience the fastest growth of traditional media as digital screens and programmatic trading become more prevalent. A sentiment that was supported by research we recently carried out for our ‘State of the Nation’ report on the future of OOH.

“Ultimately, we are seeing digital and programmatic technologies allow OOH to be easily included in multimedia digital campaigns. Global’s acquisitions last year are further proof of this. The radio company has bet big on outdoor, recognising the synergies and opportunities across a wider digital portfolio.

“To survive and thrive, marketers now need to develop marketing strategies that are more aligned across mediums to deliver unified and memorable brand experiences for those who matter the most – the consumers.”

Giovanni Strocchi, CEO of ADmantX
“Perhaps surprisingly, we saw a good Q1 (flat Q1 vs Q4 is a positive trend) meaning brands invested a little more "incremental investments" in the period before the uncertainty of Brexit.  

“Economic uncertainty caused by the recent and multiple Brexit negotiations has kept marketers’ confidence levels significantly negative. However, the postponed decision until the autumn can restore consumer confidence (that an agreement can be reached) and could also align the level of ad spending to other EU markets as a trend.

“The increase in internet advertising shows that brands have given more attention to their brand-building and web reputation. As a result, the context of communication has become very important. In turn, this has enhanced the need for a true personalised brand safety strategy (Brand Care). In today’s climate, there will be a greater attention from brands to be wary of the critical topics tied to Brexit in all contextual communication as well as a focus on adopting the right intelligent contextual solution to do so.”

Justin Taylor, UK MD at Teads
“So far this year the UK has been in a perpetual state of flux.  Moving from bad news (slowing UK productivity rings alarm bells) to great news (UK defies Brexit to top the world ranking for investment) to the ever increasing frustrating news cycles (Brexit delayed until October 31st).  

“However, one major trend emerging from our macro governmental challenges and the uncertainty of Brexit is that brands are being cautious in their predictions, then over delivering against these expectations. This economic oxymoron is symptomatic to the shift change we are seeing in the advertising and media environments.   

“Indeed, it is great to see main media grow, highlighting the fact that brands are ensuring they are front of mind in their brand building activities, compared to more direct and BTL advertising. However, it is the Internet that continues to shine and underpin the whole industry’s growth.  For me this is the most important learning from the latest Bellwether report - the Internet works across all stages of the marketing funnel without the distinction of brand or performance.  As a result, clients are adapting to the realities of the new world, the new technologies and the new ways to reach their consumers.   

“And I believe that whilst 2019 looks subdued, we could see an upward revision in June.”

Ken Leren, founder of Marketing Town
“The IPA’s latest Bellwether report highlights that the stranglehold of Brexit is still very much holding the UK back and we are risking a double dip as the country fails to keep up with comparable economies. The first by an anxiety caused recession, and the second by a badly managed Brexit causing turmoil. And what’s clear, is that businesses would like an outcome.

“Despite this, an increase in digital advertising spend as well as spend on broader advertising campaigns are very welcome and affirms our position as the world’s second largest internet economy. Simultaneously, the increase in direct marketing budgets shows a strong move towards more tailored and attentive audiences. And targeted, relevant advertising will continue to foster ongoing trust between brands and consumers.

“Ultimately, we are seeing more marketers invest in digital advertising and move towards a performance-led mindset, reaping the rewards in the process. As a result, there is a demand for new technologies with greater level of personalisation, transparency and tracking accuracy.

“Marketers must now start to understand old and new performance channels to be able to continually measure and optimise their marketing strategy and deliver even stronger results.”

Rob Shaw, CEO of Jaywing
“It’s heartening to see some improvement though tempered still with considerable caution. The observed short-term increase in spend but with continued delays to marketing spend overall very much echoes our own experiences.  For those investing, we’re also seeing spend on brand building, new approaches, such as in new AI and machine learning driven digital techniques, and more immediately and directly measurable areas such as paid media campaigns across PPC and social.

This kind of blended approach to brand, measurable media and future-proofing approaches is eminently sensible though all must work in harmony if marketers are to squeeze best value out of every penny of budget. So, they must ensure, especially where money is tight, that they are quick to understand what is and isn’t driving value and over what period they should expect value to be delivered.

Kneejerk reactions that result in over or under spend in the wrong place could prove catastrophic and of course it’s not possible to do everything with limited budgets. Understanding exactly what is working every step of the way, through techniques such as sophisticated attribution modelling, will ensure marketers do not lose sight of the need for a blended approach that balances the risks of diversification and new ways of marketing against tried and tested emotional connections with brand.

There is no silver bullet for consumers, marketers or agencies when faced with a lack of clarity over our economic future with Europe, but it seems that more switched on marketers are directing their budgets and energies in the right direction and thankfully not at the expense of brand.”

Jo Lyall, UK MD at Mindshare
“It’s encouraging to see an uplift in UK marketing budgets after a slowing down of growth in Q4 2018. Significantly, we're seeing this growth across the board and the tension between driving short- and long-term results remain. The first signals of a better balance between brand and demand media is starting to show and is more in line with Binet’s 60:40 brand vs activation. More importantly brand and demand channels are becoming more united in their activations.   

“In particular, we're seeing increased interest in mobile as a channel, as it reports its strongest growth in spend since Q4 2017, it is now a predominant digital channel and should be driving both media and creative decisions. Mobile offers advertisers the ability to be much more agile with their creative, whilst simultaneously localising messaging and driving more direct ROI. Indeed, this agility was something we leveraged in our media plan for Nike's award-winning LDNR campaign, working with partners such as Snap to reach our audience where they were.

“By placing the audience at the heart of media planning, marketers will connect with the right consumer at the right time and ensure the development of long-term brand awareness, which is increasingly important given the current UK economic climate.”

Thomas Byrne, SVP Agency Services at Merkle EMEA
“Despite uncertainty in the market, it's encouraging that marketing budgets remain resilient, with significant growth recorded in the first quarter of 2019 across both internet and main media budgets.

“As in previous quarters, internet advertising is leading the charge. In particular, the report highlights increased spend on search / SEO in order to maximise performance and media efficiency. This indicates that in an increasingly competitive and uncertain market, brands are rightly investing in meeting their customer at the most contextually relevant point in their path-to-purchase.

“However, investment alone is not enough - no matter how many channels you include in your marketing plan. Brands must ensure that they prioritise an attributed people-based marketing approach, focusing on relevancy over reach. This will mean winning, retaining and growing and their best customers while providing an improved experience and insulating their business from any business downturn.”

Stuart Taylor, CEO of Kinetic UK
“It might come as a surprise that main media advertising budgets have rebounded from the sharp reduction recorded last quarter, given the uncertain economic climate. However, this shows that it’s clear marketers are committed to long-term multi-channel communications. Growth in Out-of-Home (OOH) revenues suggests it’s clear that opportunity lies ahead for OOH. OOH posters and screens are perfectly primed as effectively the new `shop windows` for brands, offering both the brand fame, and sales activation that marketers are after. The report further showed an increase in mobile advertising, which is promising for the OOH industry too, as it continues to develop more sophisticated ways of targeting audiences by time and location using mobile augmented data, with surging mobile commerce figures evidencing the new consumer behaviours.”

 Victoria Chappell, Senior Marketing Director EMEA at Integral Ad Science (IAS)
“The biggest takeaway from the Q1 2019 IPA Bellwether Report is the upward growth of mobile advertising spend, up 3.6 per cent from -2.4 per cent in Q4 2018. This aligns to IAS’s latest digital advertising research, which identified improved quality of mobile advertising performance in 2018. In the latter half of last year (H2 2018), we found mobile web impressions sourced via programmatic channels performed well, with viewability rates increasing 16.6 per cent year-on-year, surpassing direct buys for the very first time. We’re expecting to see mobile’s share of programmatic video advertising remain on an upward trajectory — indicating that audiences are hungry for short, on-the-go clips.”