Newsletter

IPA Bellwether Report – industry reaction

David Murphy

We asked the industry for reaction to the latest IPA Bellwether Report and they gave it us in spades, so sit back, strap yourselves in and enjoy…

Jenny Kirby, Managing Partner, GroupM
“Seen within the context of continued COVID-19 restrictions, there are some promising signs of confidence coming out of the latest IPA Bellwether ad spend findings. For example, the digital advertising category has remained stable since the last quarter, while video investment at +3.3 per cent has seen its strongest improvement within the past year.

“It shouldn’t come as a shock that digital and video categories are strong performers. The pandemic acted as an accelerator for increasingly digital entertainment consumption habits. Higher investment in areas such as over-the-top video (OTT) reflect these behaviour changes, but also the attractiveness of advanced targeting capabilities, cross-device measurement and programmatic buying methods available with OTT inventory. The ability to better reach audiences, accurately measure the impact of creative, and ultimately achieve desired business outcomes mean digital channels such as OTT are well-placed to gain as the recovery gathers pace through 2021.”

Emma Morris, Head of Investment and Managing Partner, Starcom
“The latest Bellwether Report is a great illustration of marketeers’ confidence continuing to grow. There was definitely a huge sigh of pure relief across the market as advertising demand in Q1 2021 showed further signs of stability after the struggles of 2020. Whilst still very much subject to change (should a third wave of the virus arrive at any point or if there are any deviations from the Prime Minister’s roadmap), the process of recovery is looking decidedly positive, and is very likely to remain this way.

"The speed of the recovery process is actually astonishing, with several media returning to great health much quicker than earlier estimates suggested. For example, TV broadcasters are currently predicting to recoup the losses generated from 2020 by the end of 2021, when previously the recovery was anticipated to be much slower, with no real light at the end of the tunnel before 2022 at the earliest. Regardless of whether or not we’ll totally see the back of all UK restrictions by 21 June, we’ve learned a lot from the experiences of the last 12 months. The nimble nature in which advertisers, agencies and media owners have behaved is something that will no doubt hold us all in good stead for the future – whatever it holds.”

Duncan Coker, Group Trading Director, Zenith
“The new Bellwether report has clearly identified that business confidence is growing and 41 per cent of firms are now more optimistic than they were three months ago. Since the UK Government announced its roadmap for relaxing restrictions there has been an uptick in advertising revenues. TV is a good indication of the health of advertising, and over January and February, revenue was down 8 per cent, reflecting the hard lockdown. However, over March to May, we are seeing revenues grow by 50 per cent, with all the money lost in 2020 coming back. With the pent up demand and the consumer armed with an estimated £250bn in savings looking to eat out, go to the pub and buy new products, it is not surprising that the direction of travel for advertising budgets is more positive than the last few surveys, with 75 per cent of firms now increasing advertising budgets or keeping them the same.”

Darren Savage, Chief Strategy Officer, Tribal Worldwide
“While we are still clearly in negative territory overall, Q1 saw a softening to cuts in UK marketing budgets in the first quarter of 2021, proving positivity is on the horizon.

“It will be interesting to see the extent to which changes to individuals’ behaviours, attitudes, perceptions, and priorities observed over the previous 12 months become embedded in the long-term, and which revert back to those exhibited prior to the pandemic. Whilst many commentators are claiming large scale change is here to stay, it is important to acknowledge that much of this change was based on imposition, not choice, and that humans generally are afflicted with an unchanging mind.  As such it is important for brands to commit to research that examines what people are thinking and doing now, and track how these play out in the longer-term as the future plays out.”

Phil Duffield, VP of UK, The Trade Desk
“After what has been a frankly tumultuous year for the industry, it is encouraging to see that cuts to marketing budgets are continuing to soften. All signs point towards a positive step change for the industry coming soon. 

“To thrive going forwards, marketers need to remain agile in their approach, accounting for those aspects of life that may never go back to normal. CTV and digital OOH advertising in particular have massive potential for return on investment. As the majority of Brits gear up for a new hybrid work pattern, flexible, targeted advertising on digital display boards will come into its own. At the same time, the appetite for streaming content is going nowhere. It’s no surprise that video spend was the first to return to growth in Q1 and is perhaps the most promising channel for brands to reach highly engaged audiences through.

“Only by utilising smart, data-driven advertising with measurable ROI can marketers seize the opportunity to get back on the front foot as the advertising industry glimpses the light of a robust recovery at the end of the tunnel.”

Greg Isbister, Founder and CEO, Blis
“As the UK starts to make a move to normality, it’s positive to see that marketing budgets are slowing in their decline and client confidence is returning. While current restrictions have weighed heavy on some industries such as travel, retail and beauty, as they reopen, investment in marketing budgets will most likely see a boost to meet pent up consumer demand. In fact, ‘COVID-proof’ industries are already seeing a return in buying confidence and, as we move further into 2021, consumer engagement is likely to increase as they look forward to a summer of freedom.

“Simultaneously however, our industry is at a major inflection point, as we pivot away from targeting based on IDs and personal data. In fact, our recent client survey revealed that 78 per cent of senior marketers are concerned or very concerned by the loss of third-party cookies, whilst 61 per cent felt the same about the disappearance of IDFAs.

“As a result, when brands begin to replenish their marketing budgets it is vital they work with partners that can find new ways to drive key business outcomes through personalised and high-performing digital advertising.”

Justin Taylor, Managing Director UK, Teads
“The IPA Bellwether report reflects the cautious optimism that we have all felt this week. The fact that the first stage of the government’s plans has stuck to timings has buoyed the mood of the public, and we’ve seen hairdressers, retailers and hospitality venues all benefiting from that footfall. We’re confident that trend will continue.
 
“However, this confidence in ad spend is also due to the fact that businesses are now better prepared than ever for lockdown scenarios. So if the rest of the government rollout is delayed, eCommerce, home delivery and virtual events will continue to grow and thrive. Brands have found new forms of creativity, engagement and planning to drive growth – whatever the scenario – so it makes sense that media spend is looking bright.
 
“It’s also great to see online budgets stabilising, with video returning to growth, showcasing its unfailing ability to drive consumer sentiment through medium- to long-term branding.”

Vikram Kulkarni, Head of EU Customer Success - Marketing Effectiveness, Nielsen
“It is encouraging to see the fall in marketing budgets soften for the third quarter in a row, indicating that despite the huge impact of the pandemic, the industry is on a consistent journey in the right direction. As we start to see the impact of the latest ease in lockdown restrictions driving increased consumer spend, we’re set for more positive results in the next few months.

“However, advertisers must not rest on their laurels. To secure their route to success post-pandemic, advertisers need to ensure their strategies address a rapidly-changing and unpredictable set of consumer needs while also contributing to business growth. A focus on ROI is crucial to selecting the marketing tactics that are most likely to deliver on a brand’s unique goals, and effective campaign measurement will deliver the insights needed to achieve this. Real-time, trustworthy data should be at the top of every advertiser’s must-have list to not only understand how consumer behaviours shift but also how their campaigns are adapting to these changes to drive tangible business results.” 

Karin Seymour, Client Strategy Director, News UK
“It’s hugely encouraging to see cuts to marketing budgets easing as we make our way through 2021. With less uncertainty expected in the macro environment, brands can begin to explore the consumer landscape as the economy opens up, so we expect to see a gradual improvement in ad spend throughout the year.
 
“One of the things that’s stood out during the pandemic is the public hunger for stories on how ordinary people have overcome adversity in these trying times. Whether it’s Captain Tom, our NHS and key worker heroes or local volunteer networks, it’s the human stories that have cut through and brought the country together. Brands should continue to share these stories and show what they are doing to support the country as we emerge from the pandemic. It is the human stories that connect with consumers who are looking for positive news in these difficult times.
 
“As coronavirus restrictions begin to lift, consumers will also be looking for excuses to spend. Brands need to be agile in order to flex strategy quickly and keep up with expanding demand, making sure their messaging is aligned with the current climate at all times. Brands should use the new environment to emotionally engage with their audience, on a human level.”

Leigh Gammons, EMEA CEO, Wunderman Thompson Technology
"It’s fantastic to see some cautious optimism reflected, as marketers will be looking to hit ambitious targets for the coming financial year. To make up for revenue missed in the past 12-18 months it’s imperative that brands prioritise investment in marketing, as life begins to open up. Even the last few days have shown that many consumers have money that they want to spend and brands need to ensure they are top of mind. 

“But even as physical stores open, brands are continuing to harness the power of online to capture the attention of customers wherever they are located. There will be a spotlight on seamless digital experiences across all channels, including physical stores, as consumers take the relationship that they have built with brands in the last year back to the high street.   

“We therefore expect investment in apps, online and the digital experience to increase as we move through 2021. Ultimately, businesses who invest to ensure the customer experience is personalised, consistent and seamless, will put themselves in the best position for growth.” 

Azlan Raj, Chief Marketing Officer EMEA, Merkle
“After a year of ongoing restrictions and record reductions in budgets, it’s encouraging to see further signs of outlook brightening for the industry. While it comes as no surprise that advertising and media remain in a difficult place after such a tough year, lockdown easing, coupled with the widespread vaccine rollout, are cause for growing consumer confidence and cautious optimism from brands keen to re-engage. 

“If marketers have learned anything in the last 12 months, it’s the need for adaptability and cultivating a healthy appetite for change at speed and scale. Those companies that had already embraced digital transformation were well placed to meet their customers’ experience demands. Unfortunately, those who hadn’t already taken the necessary steps to swiftly enable more personal experiences with agility, have fallen far behind. With the market forecast to recover into the next financial year, there’s now a pressing imperative for those businesses to play catch-up, which must start with value-driven investments in data and technology to tackle whatever uncertainties may lay ahead.”

Nitin Rabadia, Managing Partner, Infectious Media 
“Marketers have spent the last year adapting their marketing in line with the change in consumer media consumption and this has meant a sharper focus on digital channels and eCommerce sales. As lockdowns ease, media consumption will change again, and marketers need to continue on this path and plan for a world where historical marketing strategies are no longer an indicator for future performance. This will require a more nimble, real-time approach to media planning, and marketing teams will need to work closely with their agencies to create flexible marketing budgets and plans that can fast-follow success and maximise immediate opportunities using real-time measurement. We also expect to see a rise in emerging real-time channels including audio, programmatic OOH and CTV (Connected TV), as marketers look to modern alternatives to traditional ATL (above-the-line) channels.

"This positive outlook is, however, coupled with numerous challenges for marketers. The third-party cookie will be as good as dead in 2021 and this will have a huge impact on data usage, marketing tools and measurement. Marketers will need to commit to ID solutions or accept that there will be short term limitations on measurement.

"It would not be surprising if the number of firms that increase their spending in 2021 is greater than the 17.4 per cent forecast and we expect a strong Q3 “Indian summer” that leads straight through to an early Q4 "Autumn/Winter" as marketers try to capitalise on every opportunity to take a bigger share of wallet to aid their recovery.” 

Mark Inskip, Chief Executive UK and Ireland of Kantar’s media division
“It’s been a tough year for businesses but there are spring shoots of hope coming through. While COVID-19 has hit some British households’ finances hard, others have managed to save during the pandemic, and people will be looking forward to doing the things they love again as restrictions ease. Consumers with cash in their pockets will have choice of where to spend it and are likely to be more discerning. Understanding what they will prioritise first will be vital for brands to capture a slice of that spend and to hitting the right note with their advertising, making sure it cuts through.”  

Andy Ashley, International Marketing Director, Digital Element  
“The positivity across the country is tangible and there is a feeling of progress in the air as the UK’s COVID-19 restrictions ease. While this latest report indicates that marketing budgets continued to fall last quarter, it is clear the industry is gradually making its way towards growth once again. As the retail and hospitality industries pick up business once again, we can expect this to continue in the months to come.

“We’re about to see a rapid shift in customer behaviour, making the implementation of accurate and agile data sources an absolute priority for achieving marketing success. It is not enough to rely on existing insights. Advertisers must ensure they are up to date on their audience’s current needs to make sure their strategies remain effective and efficient as we make the journey back to normality.”

Marc Brodherson, Partner, McKinsey & Company 
“While some companies are cutting budgets and retrenching, we’re seeing others reduce spend in unproductive areas and reallocate those savings for growth. It’s a shift of 10 to 20 per cent of the overall budget into data-driven growth programs. 

This refocus is very much needed to stay ahead of the competition. Between March and August 2020, one in five consumers switched brands, and seven in ten tried new digital shopping channels. We expect these changes will shape consumers’ habits even beyond the effects of COVID-19. This has left marketing departments with no option but to consider agile marketing practices.” 

Pablo Dopico, Head of Gaming and EMEA Agencies, VidMob
“Despite an overall decline in marketing budgets, some 14.2 per cent of surveyed companies saw an increase in available ad spend, and forward looking data suggests that budgets could recover in the next financial year, giving brands a potential end in sight and something more to work towards. However, with the current industry shift towards data privacy, there are still challenges ahead and we're on the verge of a tectonic shift in the handling of consumer signals that will soon echo across every platform.

"Marketers need to be gaining a better understanding now of how all the elements in the anatomy of an ad impact digital campaign performance and how to optimize them. This will become essential for the success of any digital marketing activation, and help justify budget allocation. Creative will soon become the most important driver of digital campaign performance. Those still relying mostly on delivery optimization algorithms and not paying enough attention to creative data will be in for a rough awakening going into the summer season and beyond.”

Dom Waghorn, strategy director, Syzygy
“While these are promising signs, it’s worth remembering that recovery is uneven. For channel or category spend, but also when it comes to business sector. We’ve seen hugely different journeys for our clients, some who have had ‘good’ pandemics. Clearly there is no one size fits all playbook for the next 12 months; every company needs to address its own specific category, competition and customer status. This requires a good hard look at strategies – things have shifted over the last year, and customers are not in the same mindset. This is why the continued reduction in market research is huge cause for concern. Critical business strategies being developed without research into consumer behaviour is a dangerous game. This also runs contrary to the (quite right) obsession with delivering brilliant customer experience. As there are now more nimble ways to develop this insight, we would advise all our clients to retain some level of budget for knowing their audiences and customers inside out.”

Bill Swanson, EMEA Strategy Lead, Iris.TV
"Consumption of video content across devices is rising rapidly, particularly within Connected TV environments. With 19 per cent of survey participants reporting elevated digital video budgets, the first marked increase in the segment since Q1 2020, it is clear there is an associated growth in CTV opportunities available to advertisers.

“Yet, reservations around the transparency of the video ecosystem across CTV continues to hinder its adoption into marketers’ media mix. Streaming providers have found it nearly impossible to utilise video level data at scale for buyers to optimise programmatic ad investment and as a result this data is scattered and siloed.

"To ensure video ad spend carries on its strong growth trajectory, marketers must learn how to securely onboard video-level data and connect it with the programmatic advertising ecosystem, albeit in a neutral, privacy-first way.”

Lisa Menaldo, Co-founder, The Advisory Collective
“It should not come as a surprise that brands have remained cautious in the first quarter of 2021; the ongoing pandemic, a nation in lockdown and the logistical tailwinds of Brexit continue to hinder marketer’s efforts. However, there is a strong sense of optimism and positivity for the forthcoming quarters, notably in Q3. The vaccine rollout combined with the easing of lockdown and the demand from consumers to return to a level of normality will further encourage confidence in media investment across the marketing categories. 

“To win back the consumers who have adapted to an online environment, many businesses will need to make their media budgets work harder, particularly  in sectors that were forced to close, namely retail, entertainment, and hospitality. By the same token, however, online environments will also need to invest heavily in retaining those newfound customers. 

“While there are factors that could derail the anticipated growth, such as new strains of the virus or delays in vaccines across countries, there are certainly reasons to be cheerful for now.”

Alexander Goesswein, VP Key Accounts, EMEA, Criteo
“After a tumultuous year in advertising, it’s encouraging to see optimism within in the industry. The pandemic caused havoc on marketing budgets, but with a greater reliance on digital, brands are finding new and creative ways to reach their audiences.

“Today, the world is starting to look more like it did prior to the outbreak, but consumers aren’t going back to their old shopping habits overnight. It’s therefore vital that brands devise an online strategy which compliments offline channels; to satisfy customers at every touchpoint and achieve a balanced customer experience. However, going into Q2 and Q3, brands will also have to stand out in a saturated online marketplace and hit that sweet spot where offline and online converge, for one channel cannot thrive without the other. This can be achieved through connecting with consumers by targeting them at all touchpoints; allowing them to discover, evaluate, engage and ultimately buy into a product or service. Secondly, an agile approach is needed, for too long has the ad industry rested on its laurels, producing the same batch and blast tactics that are unlikely to connect with consumers in a meaningful way. With COVID-19 causing a seismic shift in the industry, it caught many out, leading to 9 out of 10 marketers across all verticals stating they had made changes to their strategy due to the pandemic – agility and innovation is now the norm, not a nice to have.

“As we see the beginnings of an economic rebound in the UK, marketers need to get ahead of the new digital advertising landscape. This especially rings true as we move into a post-cookie era, where targeted advertising will have to be more granular and accurate to consumers’ ever-changing habits. Looking forward, above-the-line advertising will continue to take a back seat even as we emerge into a post-COVID-19 world. For brands to generate the highest ROI, targeted advertising is the way forward and a failure to capitalise on this technology may result in shortcomings."

Damien Bidmead, Head of Marketing and Communications, White Bullet
"News of the rising and falling of digital advertising budgets inevitably prompts a specific reaction in a company like ours that specialises in detecting and tackling misplaced advertising on undesirable domains. And that is that advertisers could give themselves a very easy additional budget boost by ensuring their programmatic ads aren’t wasted on criminal sites full of pirate content. With all the talk of post-pandemic resolutions and building back better, advertisers should consider auditing the health of their digital advertising supply chain as an investment in their future advertising efficiency."

Filippo Gramigna, CEO, Audiencerate

“This report is a welcome indication that we are slowly returning to some stability. There is of course still room for recovery, and as the industry continues to evolve in the way it can use third party cookies and other identifiers, there is the potential of change for the better. By using the myriad of tools available to them, such as predictive audience modelling, identity resolution and analytics, marketers can source granular data to boost both effectiveness and efficiency in their advertising campaigns, ensuring they continue to move in the right direction.

"The ability to be flexible in advertising strategies will be paramount now for brands and marketers, not just ahead of the changes to cookies, but also as UK consumers get back to living their lives outside of lockdown. Consumer needs are changing fast and technology continues to evolve, so being agile and tuned in to your audience needs to be a top priority."

Nick Morley, EMEA Managing Director, Integral Ad Science
“As the UK eases out of lockdown restrictions, and confidence increases, marketers will remain focused on ways to efficiently spend budgets and maximise ROI. By utilising granular data points, advertisers can understand performance, drive engagement, and achieve valuable business outcomes.

“Looking ahead, we can expect to see more marketers make investments in programmatic and contextual advertising. Using first-party data is not only more cost efficient and scalable than third-party audience tracking data, such as cookies, but will also address data privacy concerns. Those that make investments now will reap the long-term benefits, particularly when considering that the majority (70 per cent) of UK consumers say that their perception of an online ad is impacted by the surrounding content on the page.”

Steve Carrod, Co-founder  and Managing Director, DMPG
“Perhaps a pertinent point to explore when looking at marketing budgets, is why would these increase or even go beyond pre-pandemic levels when there is so much room to improve with existing customers? The number one rule in sales is that it is infinitely easier to sell more to an existing customer than it is to acquire a new paying customer. As diversity of customer touch-points reduces – sighting more towards digital devices – and the level of control one can have over that experience increases, it stands to reason that brands can and should be putting much more focus on the entire experience, and not just driving an initial click, lead or sale.

“The pandemic has increased the focus on digital transformation dramatically, and the focus on customer experience, retention and reactivation has never been stronger; we are seeing this demand across most of our clients. In parallel there is an increasingly difficult landscape -when you consider ITP and GDPR concerns – for attributing marketing spend to true ROI.

“Over time we expect marketing budgets will continue to decline on non-digital channels, and while digital will continue to grow, it will be slower than expected, and budgets will shift towards improving end-to-end customer experience and retention. We see an average of 7.5 per cent incremental revenue growth from our clients taking the customer experience centric approach. With such strong demonstrable results, it’s clear that it should be a future area of focus, rather than just pumping more cash into the top-of-funnel marketing acquisition approach.

“As all signs point to recovery, businesses must embrace digital transformation and focus on customer experience, retention and re-activation.”

David Barker, SVP of Global Commercial Partnerships, Samba TV
“With the latest IPA Bellwether Report indicating subdued ad spend in linear while video has moderately increased, these findings point to shifting priorities for advertising budgets. Brand advertisers are following the trends in consumer attention away from traditional channels such as linear TV, toward digital channels such as subscription-video-on-demand (SVOD).

“Within this broader shift from linear to digital viewing, audiences are spending their time across more services than ever before, from Disney+ and Amazon Prime Video to YouTube and Twitch. The findings show advertisers recognise the ability to resonate with audiences via these digital channels, but effective targeting relies on a comprehensive, and privacy-compliant understanding of audiences first and foremost. As consumers are increasingly spread across different platforms and channels, we’re likely to see advertisers invest more in learning about where their audiences are to ensure future online spending is as relevant and well-targeted as it can be.” 

Rich Ashton, Managing Partner, FirstPartyCapital
“The global lockdown has accelerated the shift to digital in three main areas: streaming (video and audio), gaming, and eCommerce. This is providing advertisers with emerging channels through which they can reach their target audiences. Whilst we expect there to be a resurgence in offline purchasing and advertising as the world opens up, consumer habits under the ‘new normal’ will result in irreversible and transformational changes in the way advertisers communicate with their customers.

“A key piece that has been overlooked by many commentators is the shift from in-store marketing to online. Advertising within eCommerce platforms like Amazon, Instacart, Ebay, Zalando, etc. is exploding and will be the beneficiary of billions of pounds in ad spend as brands look to increase their conversion at the bottom of the funnel and drive more sales. We see this as one of the biggest opportunities in the next five years.”

Nigel Clarkson, Chief Revenue Officer, Hivestack
“It should come as no surprise that OOH in the UK has seen a decline in spend quarter-on-quarter – 2020 lockdown only started in March and by then, spend for the quarter had already been committed. The report shows a comparison between 2020 pre-COVID 19 and 2021 lockdown. A net balance of -24 per cent, up from Q4 2020, while still in lockdown is testament to the excellent work of the UK OOH industry by OOH specialists and media owners. Advancements in mobile and traffic data, audience planning dashboards, and media owner audience guarantees have boosted confidence in the channel. Digital OOH has remained strong during this period with clients embracing the flexibility offered by connected screens in key areas like supermarkets, where footfall is high.

“Looking forward, OOH is a strong component in client pipelines as the reopening of retail, gyms and pubs is driving a huge increase in shopping, travel and transport. Audiences will continue to increase as the successful vaccination programme allows the UK to recover. The OOH environment that brands have returned to is more agile and more data-driven than before. It’s also an environment now capable of delivering programmatic DOOH via connected screens, utilising real time mobile location data, creating new and exciting opportunities for the ecosystem.”

Alison Harding, VP Data Solutions EMEA, Lotame
“Whilst budget plans for the year ahead point to a recovery, marketers will need to prove their hard-won spend is working. This will require a data strategy that enables them to understand, find, and accurately target and message their customers without using third-party cookies. Identity can solve this challenge but education is needed on how identity (probabilistic and deterministic) and non-identity (context, FLoC) solutions can work together. Importantly, marketers are clear that they need multiple identity solutions which are interoperable, so we can expect to see them seeking collaborations across the industry that will enable them to build up their data supply with other first-party data and high-quality third-party data.”

Virginie Dremeaux, Executive Director, Product and Sales Marketing International, FreeWheel
“It’s encouraging to see from the latest IPA Bellwether report’s figures that marketing budgets are beginning to stabilise with signs of growth in ad spend across all categories.  Video stands out in particular, with spending at +3.3 per cent, which is the first time it has been positive since early 2020.

“The strong performance of video is evidence that marketing spend is closely following the consumer trends towards online channels that accelerated throughout 2020. For the UK in particular, the vast majority of homes now have a TV connected to the internet, with the result being audiences spending increased time across both linear and digital channels.

“As confidence builds throughout 2021, we can expect brands to tap into these audiences through data-driven Connected TV inventory, which offers marketers extended reach to capture those diversified audiences within the premium, safe TV environment needed to build brands in the long term.”

Nick Pinks, CEO, Covatic
"As a growing ad-tech start-up ourselves, we welcome the promise of growth in ad spend and GDP this year and next. But even when ad budgets bounce back, targeted marketing as we know it faces a period of unprecedented turmoil, given the increasingly righteous policies of major tech players such as Google and Apple towards privacy and the sharing of data.

"The privacy of users should categorically be the digital marketing industry’s priority, but we need to ensure we are reaching a solution collectively, rather than being led by tech giants into a new world that mainly benefits them. So all those with a stake in targeted marketing need to look hard at truly private data solutions such as storing data on devices, not servers - instead of signing up for a not-entirely-private internet to which Google and fellow behemoths hold the keys."

Lucy Hinton, Head of Client Operations, Flashtalking

"The latest IPA Bellwether report indicates that we are reaching a key point for advertisers and brands to apply the lessons learned from the past 12 months. With ad spend predicted to increase by 3.5 per cent during 2021, marketers will still want to make the best use of their budgets, with premium ad formats and data-driven creative front of mind, to provide the relevant ads that digital-savvy consumers have come to expect.

"Marketers will be looking at more engaging, visual formats to grab the attention of those consumers; it’s no coincidence that video ad spend is the first sector to return to growth.

"Meanwhile, for the ad tech industry hoping to make the most of this increased investment, there is the need for a reset. This will involve providing more transparent ways of reaching audiences that don’t solely rely third-party cookies as the industry prepares for the shift towards a cookieless future, and a willingness to tackle fraud and improve measurability to create the most efficient campaigns."

Federica Bowman, Global CEO, Firm Decisions
“While we are not out of the woods, it does feel that a corner is being turned and the downward trajectory of marketing budgets is easing – with budgets likely to recover next financial year. This positive outlook for brands and agencies is very welcome as both can now focus on building marketing effectiveness in less challenging market conditions. 

“However, given the significant changes to budget last year across the marketing spectrum, it is important that brands take stock of what has happened in the last 12 months, evaluating how that money was managed and spent, to ensure that wastage was minimised and the best possible value was achieved. Although we'd all like to forget about the last year or so, it's important that agency and marketing performance is evaluated and learnings are garnered, so as future budgets can be invested more wisely, in a consumer landscape that is arguably forever changed." 

Rik Moore, Head of Insight, Strategy and Planning, Kite Factory
“There is much to feel positive about in this report. Yes, there is still decline this quarter, but that is to be expected given the context of Lockdown 3. Within that ‘softer decline’ story, the stabilisation of online spending plus video ad spending returning to growth suggest that advertisers had adapted to the necessities of advertising to a stuck-at-home audience, so were not taken by surprise in the latest lockdown. The impact of the vaccination programme breeds increasing faith in the roadmap forward. We are no longer peering into the unknown – instead we’re cautiously looking to a post-lockdown future, and this report clearly suggests that the optimism is building.”

Justine O'Neill, Director, Analytic Partners
“While we’re not out of the woods just yet, The IPA Bellwether report offers a glimmer of hope for brands in 2021. One year into the pandemic, brands have adapted to the new normal and markets are starting to stabilise. Cuts to UK marketing budgets and crisis planning have eased in the first quarter, showing signs of a more positive long-term outlook going forward. 

"With ad spend budgets expected to recover in the next financial year, brands should begin shifting their focus to growth and efficiency over minimising exposure. Now is the time to build on the growing momentum and reinvest in tried and tested channels to optimise marketing efforts for a stronger second quarter.”

Richard Exon, Founder, Joint
“You can feel it in the air – the stirring of the long-predicted rebound. While these IPA Bellwether figures show that marketing budgets were still declining in the first quarter of this year, with the current easing of lockdown and many people’s pent-up demand, enforced savings to spend and joyous reengagement with the world, activity is returning to the economy. It looks like the next quarter will be much more positive and with the continuous vaccine rollout, the overall business outlook is getting brighter. These latest figures further support the quick recovery of ad spend with budgets back on track next financial year. And surely some sectors will benefit – personally I can't wait for my first trip to a cinema, nothing beats the big screen experience when it comes to movies."

Faye Daffarn, Managing Director UK, Tug   
"The IPA’s latest Bellwether report is an accurate reflection of what we are seeing as an agency – cuts to UK marketing budgets have eased and consumers are longing for the unique interactive experiences to which they have become accustomed during lockdown. As restrictions lift, it’s clear that marketers must find innovative ways to link digital and physical experiences to bring added value to consumers.

"While apps and AI technologies are great for online targeting, they also present the opportunity to build relationships with consumers that are out and about post-lockdown. Looking ahead, the winners will be the value-adding brands who can adapt to offer ‘phygital’ experiences, utilising first-party data to connect both in-person and online experiences. This will become even more important with sun setting on third-party cookies this year.”

Teodora Gavrilut, Chief Operating Officer, Creatopy
"Our customers are advertisers and marketers, so we have been frontline observers of how the industry is shifting, so the latest IPA Bellwether report comes as no surprise. The continued restriction of marketing budgets is to be expected as businesses continue to cut their costs. But we’ve also seen situations where some companies have once again begun to supplement their marketing budgets, promising positive things to come.

“The challenge for marketers in the upcoming future will be to remain focused on the consumer. If there is one thing the pandemic should have taught us, it’s how to react to the relentless pace of change. With the situation changing daily and sometimes even hourly, marketers have to keep up with a constantly shifting agenda, all while staying on-brand and on-message. The solution, however, is already engrained in the UK industry- innovation. The pandemic has been a catalyst for companies to constantly review how they approach their creative process and how their partners support them in delivering it. Going forward, marketers will need to work with providers who are as flexible as possible to ensure that they continually innovate and evolve to meet new trends.”

Emil Bielski, MD, Croud
“The pandemic has encouraged businesses to think strategically about where to invest marketing spend, looking at their wider media mix and re-evaluating current strategies to streamline and maximize spend. Some brands have been lucky enough to experience hyper-growth, and investment into sophisticated services has increased; others were forced to quickly undergo transformation and pivot from an offline to online world, requiring guidance to do so. As a result, certain areas of marketing – such as performance – maintained momentum and recovered more quickly than other areas. Going forward, however, sustainable overall growth can only be achieved by investing in a mixture of long- and short-term media activity. As confidence returns for marketers, adaptability is crucial, as is a heightened willingness to explore a wider variety of media strategies – which is an exciting prospect for both agencies and consumers.”

Tim Geenen, Managing Director, Addressability Europe, LiveRamp
"The stabilisation of marketing and ad spend this quarter points positively towards 2021 being earmarked as a year of expansion, as industries reopen following the lockdown.

"However, it’s important to remember that it’s not only the pandemic that has impacted the industry in recent times; new privacy regulations continue to be implemented globally, the countdown to cookieless ticks on, and Apple’s ATT (App Tracking Transparency) framework is scheduled to materialise imminently.

"As a result, many marketers have migrated their strategies towards a more sustainable set of technologies. It’s no secret that third-party cookies are an imperfect solution, and marketers have used this period of upheaval to embrace the opportunity to transform the way they approach digital advertising once and for all.

"Sustainable solutions emphasize building first-party relationships with consumers – a an ecosystem whereby consumers authenticate in exchange for trusted and valued engagements. Ultimately, marketers want to reach consumers based on authenticated identity attributes – supplied actively and with permission – which enables greater addressable reach, improved measurement, and better ROI."

Shumel Lais, Founder and CEO, Appsumer
“As cuts to marketing budgets ease in the first quarter of 2021, it is welcoming to see that online spending budgets have stabilised and video ad spend has returned to growth.

“However, if you were to look at mobile as a standalone channel, we’d expect to see a completely different trend. According to Statista, consumers were spending 132 minutes daily on smartphones in 2019, compared to a projected 155 minutes this year. Indeed, our own mobile advertising benchmark report found that mobile ad spend actually recovered in Q3 2020, with overall spend increasing quarter-on-quarter by 53 per cent, with both gaming and non-gaming advertisers growing.

“Ultimately, ad spend follows consumer behaviour, and we’ve already seen an increase in usage of mobile services such as D2C subscriptions, delivery services, exercise apps and gaming. It’s unlikely we should expect consumer habits to return to pre-Covid normality and as such we shouldn’t expect the advertising mix to either.

“That said, what’s going to be interesting is seeing how the industry reacts to the impending rollout of iOS14.5 and Apple’s App Tracking Transparency framework. We predict this will likely drive shifts in the media mix of mobile app advertisers, and our last snapshot of the Share of Wallet for mobile app advertisers found that Facebook likely has the most to lose from iOS 14.5.

“In the early days of ATT, app advertisers are likely to tread with caution, and budgets could shift to Apple Search Ads and Android devices in the short-term for the security of known outcomes. To succeed in the coming months, app advertisers will need to work with trusted partners that can compare, combine and enrich different data sources to get a complete performance view to then ensure campaigns are optimised accordingly.”

Claire Burgess, Director of Paid Media, Incubeta
“As the UK prepares to return to normal it’s incredibly positive to see that marketing budgets are slowing in decline. At Incubeta, we’ve already seen a high percentage of budgets return to normal across several industries as they prepare for the end of lockdown. While some sectors such as Travel, Automotive and Beauty may take a little longer to return to normal due to the heavy impact of COVID-19, we will hopefully start to see an incline in budgets as consumer confidence returns and  restrictions are lifted.

“It is encouraging that marketers expect budgets to bounce back in 2021/2022, and that we are already seeing increased client confidence with increases in spend. However, as the world slowly returns to normal, the digital acceleration and innovation that has taken place over this past year will not be discarded. Instead the investment in digital agility and adaptability will continue to work in parallel as the offline community returns. 

“It will be important for advertisers to remain engaging and relevant while delivering brand messaging to its consumers. Now, there will be more competition from both online and offline, as restrictions ease continued investment in digital innovation and a data-driven, multi-channel attribution strategy will be crucial to grab customers’ attention.”

Silke Zetzsche, Head of Commercial Partnerships, A Million Ads
“Despite budgets still falling, the report from Q1 shows a positive outlook on the year ahead as we see marketing budgets begin to recover. We are now seeing brands starting to move away from traditional ways of buying, planning and creating media and embrace a more strategic, dynamic approach. The start-stop-change of the last year has really made the need for agility evident, and in every meeting I now have with clients, personalisation is mentioned. Indeed, the combination of creativity and agility can give brands a positive outlook over the coming months as the advertising industry is recovering.

“As we gradually emerge from restrictions, the rules are in a constant state of flux. Moving forward, brands need to seize this opportunity to be as creative and savvy as possible, conveying to their audiences the most up to date information whilst continuing to connect with them on a personal level. By taking advantage of dynamic audio, brands will be able to react to the different stages of restrictions at a global, regional and local level and adapt their messaging accordingly. For instance, messaging on opening times or deliveries can be edited in real time, without having to rework the creative from scratch; saving money and connecting with consumers in one fell swoop.

“As Mark Read, WPP CEO, has said: we need to focus more on the creative message and experience.”

Ali MacCallum, CEO UK, Kinetic Worldwide
"We hope that these will be the last figures we see that are so heavily affected by the pandemic. If so, there's a lot to be excited about for marketers. OOH (Out of Home) has suffered through the cold snap of the winter lockdown, but with the public now allowed out and a return to normal within our grasp given the vaccine roll-out, it means that we’re now actively seeing a recovery and a kickstart to demand. Our own research shows we're set for a real surge in consumer activity this Spring – best symbolised by pub patrons braving the snow for a pint on 12 April and the queues outside Primark. 

“The renewed zest and vigour for all things outdoors will advance as restrictions ease, the weather improves, and we remember the collective and community activities that make us happy. OOH as a medium is well placed to encourage and enable that sense of community spirit – and reach consumers in a localised, but scalable way. OOH didn't waste the quiet months and we can now pinpoint audiences through useful data and respond with tailored messaging in near real-time. As the world goes cookieless and life is lived outside again, OOH will return to strong growth as budgets and audiences return."

Ross Nicol, VP, EMEA, Zefr
"As the world inches towards normalcy, video has retained its position as the growth engine of the advertising ecosystem. Not only was video one of the least impacted formats in Q4 2020, recording just a 3.5 per cent reduction in ad spend, but in Q1 2021, it was the sole category to bounce back – where a net balance of +3.3 per cent of firms recorded an increase in available spend compared to three months ago.

"Consumers are turning to video platforms as their preferred content destination of choice, with YouTube, Facebook and TikTok dominating consumer attention and audience growth. As more marketers shift their traditional media budgets to these platforms, it is imperative they ensure ads are placed adjacent to videos in brand suitable and responsible environments with transparency and context top of mind. As this contextual capability improves, the growth of video platforms is set to get stronger.”

Matt Andrew, UK MD, Ekimetrics
“It’s fantastic to see brands more optimistic with budget increases. As we’ve been forced to learn over the last year, an agile approach to planning helps to deal with uncertainty and change. This will be a key lesson that brands want to take forward, but in a more structured way than the last year may have afforded. This is where multi-scenario KPIs and planning come to the fore.

“Developing a permanently agile approach means brands set themselves up to deal with change as a matter of course. Using simulations to model the multitude of data points forward and forecast different scenarios based on market, category and customer leading indicators, means marketers can narrow their options and are always ready and able to make marketing mix, budget, pricing and product decisions with confidence. For example, we work with a leading hotel brand that had already embedded agile, multi-scenario planning, which stood them in good stead to continue to market profitably in 2020, despite being almost completely shut down.

"For brands in 2021 and beyond, from reacquainting themselves with their audiences to figuring out which consumer behaviours have stuck, a granular, data science led approach to marketing is an important part of capitalising on increased industry and consumer confidence and continuing to use budgets wisely.”

Zack Sullivan, UK CRO, Future
“Most businesses had to be reactive through the turmoil in 2020, but now is a pivotal time to shift focus to winning the battle for consumer spending, as both COVID-19 restrictions and budget cuts begin to ease.

“Our recent research into post-lockdown purchasing power found that Brits have amassed over £245bn in savings since the pandemic began, 25 per cent of which will be spent immediately or soon after lockdown ends. While holidays and trips to pubs and restaurants are top of the list (53 per cent and 42 per cent respectively), consumers will continue to spend on the items that saw popularity during lockdown, including home decoration (11 per cent), garden products (10 per cent), and personal and home technology (10 per cent and 9 per cent respectively).

“These findings highlight how the pandemic has caused a lasting shift in consumers’ wants and needs, meaning marketers must think carefully about how they connect with audiences if they wish to stay ahead of their competitors. Partnering with established media brands will be a vital strategy to achieving this; with a combination of high-intent audiences, quality content and customer loyalty, they provide a potential for ROI that should put them at the top of every marketers tick list in 2021.”

Liam Patterson, CEO and Founder, Bidnamic
“It’s disappointing, though not unexpected, to see further reductions in marketing budgets, however there are glimmers of hope for the industry. The downward trend in budgets since the start of the pandemic has softened for the third quarter in a row and ad spend is forecast to recover to pre-COVID levels in 2021/2022. As we work purely in digital at Bidnamic, we haven’t experienced the same downwards trend in ad spend that other channels have suffered during the pandemic as restrictions forcing people to shop online has resulted in a surge in Google Shopping spend. In fact, we have seen a 74 per cent increase in clicks on Google Shopping in Q1 2021 from Q1 2020 across all retail verticals. Despite restrictions easing and non-essential shops reopening, we expect Google Shopping activity to continue increasing, as it was before the pandemic, and as new technology makes the online user experience even faster and more appealing, consumers will continue to enjoy greater convenience and value for money searching and buying products online.”

Anders Lithner, CEO, Brand Metrics
"It’s welcome news to see cuts to UK marketing budgets easing. It’s also heartening to see online budgets stabilising and video ad spend returning to growth. With the recovery set to gather pace in 2022 – and the expectation of a +3.7 per cent expansion of GDP in 2021, followed by a quicker rise of +5.8 per cent in 2022 - advertisers need to be ready to communicate to audiences as we emerge out of lockdowns and into a new normal. Those that are visible will reap rewards.

"In a cautious climate, however, data is more critical than ever. Without this, it’s hard to say which strategies or formats will drive the results that we need and that clients, rightly, demand.

"Tangible proof of value is more important than ever. As the market matures, we have seen a gradual awakening as to the complexity of the marketing funnel and less of a reliance on rudimentary measures such as ‘clicks’. Indeed, the ability to measure impact across key metrics of awareness, consideration, preference and intent will be critical to confidence returning. Unless marketers can provide consistent and rigorous metrics they will struggle to win back budgets lost and deliver the returns that businesses so sorely need."