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IPA Bellwether Report Q3 2020 - the industry reacts

Tyrone Stewart

Following the release of the latest IPA Bellwether Report, the industry shares its thoughts on the news that the COVID-19 pandemic is continuing to do damage to marketing budgets in the UK

Ali MacCallum, CEO UK, Kinetic Worldwide
“With uncertainty hanging over every business area, new restrictions being introduced on a weekly basis and short-term nervousness, advertisers have understandably decreased their marketing budgets as reported by the IPA Bellwether report. 

“OOH media has taken less of a hit than in Q2 as it has been used innovatively and intelligently by brands and public bodies as we emerged from full lockdown. 

“As we move towards 2021, brands will require flexibility and instant data analysis as marketing decisions are increasingly short term. Thanks to the digitalisation of posters, automated and programmatic OOH allows for trading and targeting to be delivered across thousands of screens in near real time. Marketers have the option to optimise the OOH creative at a moment’s notice by monitoring sales performance and audience indexing. This amounts to a revolution in the sector as data about news, weather, events, and location can be added to the digital mix to better target consumers. 

“The advertising industry needs to offer more flexibility to brands because we’re facing new level of uncertainties every day – from a possible second COVID wave to Brexit at the end of the year. I believe that we will recover strongly in 2021 as we learn how to navigate this new environment, but until then we need to take the opportunity to innovate how we're using channels and make use - as much as is possible - of contextually useful OOH.”

Neil Collard, Managing Director, Great State
“The reality of a second wave of COVID-19 has - predictably - led to a further downwards revision of marketing budgets into Q3. However, our own research during lockdown predicts that there is a significant shift to developing digital products and services, therefore we have constructed three archetypes of businesses:

  • Sustaining risers are a small group but they are needing to invest in loyalty initiatives to retain the customers that they have gained through the last 6 months
  • Supply gappers represent most business and we have observed that in this space digital products and services have leapt in prominence and importance in board tables across the land. As customers have moved to the digital channels there is increased scrutiny on the value and security of those products. This is translating into increased investment of the function and security of these products and services as they become ever more business critical. It would be easy to hypothesise that these investments are funded by a reduction in marketing budgets
  • Decline battlers are facing bigger more strategic challenges. These are businesses that are late in the game are realising that their long-term survival may well depend on their ability to develop new digital products and services at pace and so again we are seeing a shift in focus into the digital product area – not only for short term gain but also investing in the capacity and capability of their teams

“While uncertainty is definitely the key term until the end of this year, data and insights are crucial to succeeding, as brands need to offer improved digital experiences for people, who have increased and altered their device usage whilst being at home.”

Azlan Raj, Chief Marketing Officer EMEA, Merkle
“The record reduction in budgets, and recurrent COVID-19 lockdown restrictions have left the industry low on both confidence and optimism. Just 3 in 10 of respondents are feeling more optimistic about their own companies' financial prospects than in Q2, and there's a very real risk that low confidence could itself become a self-fulfilling prophecy of stagnant growth or further retrenched budgets.

“The green shoots may not feel 'immediate', but there are opportunities to get ahead of the curve and back to growth. As we try and get back to normal, consumers are still very much unsettled by what's going on in the world, and not just COVID-19, but the US election and Brexit too. Brands that can truly support their customers to navigate safely through the stormy waters of 2020, have much to gain. So we'd expect to see a shift in 'pay and spray' approaches to advertising, and a greater investment in digital, data and customer experience. The number of touchpoints is still growing, as what customers consider 'ads' diminishes, so both into Winter and beyond into 2021, we anticipate that kneejerk digital transformation caused by the Coronavirus will need to mature into strategically-driven, experience-led investment.”

Shazia Ginai, CEO UK, NeuroInsight
“It is disappointing – although not unexpected – to see further drastic reductions to marketing budgets.

“Our research shows that in this emotional time, people are looking to brands to help them understand and frame this difficult experience. As COVID-19 has brought sharp focus to the more fundamental foundations of Maslow's Hierarchy of Needs such as shelter and safety, customers are likely to be less aware of peripheral brands and brand activity and focus instead on brands that bring either utility or enhanced experiences to their lives. So, there's a clear opportunity to build more fundamental connections with customers for those that get it right.

“Additionally, now more than ever, as we face existential threats, people expect brands to weigh in on key issues that affect the world we live in. Brand Purpose may have been loosely tolerated when things were going well in consumers' lives, but brands need to put their money where their mouth (or brain) is if they're promising action, or they won't be easily forgiven and may be easily forgotten.

“It’s heartening that the report predicts a more optimistic outlook for 2021 but for brands, this will only be possible if they can manage – even in these difficult business conditions – to connect to the hearts and minds of their customers. Brands will be remembered if they get it right, and it will position them well on the way to getting back to growth in 2020/1.”

Charlie Johnson, VP, UK & Ireland, Digital Element  
“While 2020 has brought with it a series of unprecedented challenges, this is not the first time the industry has had to adapt. As long as marketing has existed it has continually evolved to suit shifting consumer behaviours. 

“The current contraction of marketing budgets has been dramatic, but it doesn’t mean the industry has to come to a standstill. For those looking forward to the recovery, the key will be in getting the details right. Having access to, and properly analysing, detailed, relevant and up-to-date data is vital to understanding what consumers will engage with right now - not what they liked last year or last week. As we see the impact of regional lockdowns unfold, this understanding is critically important and when recovery begins next year, we’ll see those who have got their data practices right shine through.”

Alvaro Megias, Global Project Manager, Audiencerate 
“If one thing is clear from this report it is that the future of marketing still remains largely unclear, but it is important to recognise declines are at a much softer rate than they were in Q2. Therefore, it is critical that marketers continue preparations for a recovery of macroeconomic conditions in 2021.

“To stay ahead of their competitors and the ever-shifting climate, marketers need to focus their efforts on direct sales and one-to-one relationships with their customers. With consumer behaviour and market conditions more changeable than ever, marketers must strengthen their data monetisation strategies with hyper-targeted data that can be used to reach and engage audiences that best match their needs, in the fastest times possible, helping to deliver more impactful and competitive campaigns.”

Christianne Wahl, Head of Global Accounts EMEA, VidMob 
“Despite the report showing some signs of stabilising budgets, the pandemic continues to put pressure on many marketers, with the combined effects of lockdowns, distancing rules and limited funds making it a challenge to create new campaigns that resonate with audiences – when emotional mindsets are harder to predict – and deliver ROI. Every bit of budget must be maximised to return results and creative is the next frontier for optimisation as it has the greatest impact on campaign results. Brands with a transformation mindset who see the power of technology to improve creative workflow, speed and effectiveness will come out the strongest.

“With the holiday shopping period upon us and more consumers likely to buy online this year, we expect that Q4 will see digital advertising playing an important role as brands with an e-commerce presence attempt to regain some of the losses experienced so far in 2020.”

Lucy Hinton, Head of Client Operations, Flashtalking 
“This year, we have seen a shift away from premium digital ad formats, such as rich media and dynamic ads, to standard ad-serving, as companies sought out ways to save money. But the brands that used dynamic creative were able to respond and adapt to the evolving global markets. 

“Advertising performs better when it is personalised and targeted, and the increase in time spent online during COVID has given marketers more insight than ever about their consumers. In the year ahead marketers must use that intelligence to deliver flexible and agile data-driven creative which will enable them to reach their audiences in an environment that will still be in a state of flux.”

Faye Daffarn, Managing Director, UK, Tug 
“The report highlights the importance of agility and efficiency in marketing. With spend reduced, it’s vital marketers are able to move budgets seamlessly between the best performing channels while balancing brand awareness metrics to ensure maximum return.   

“For search marketers, this could simply mean making search engine optimisation (SEO) and pay-per-click (PPC) work harder and more efficiently together, by religiously scrutinising the keyword mix across channels to ensure a strict balance of visibility and budget efficiency.

“Agility is also crucial from an account management perspective – many brands have seen cuts to their marketing teams, so agencies must be able to adapt to become a further extension of their team, while being fluid enough to react as quickly as possible when marketing plans are torn up and changes are instigated.”

Ross Caveille, Co-Founder, Acorn-i 
“We’ve seen an acceleration in the shift to eCommerce in 2020, which is reflected in digital and direct response marketing budgets being more heavily protected than other areas. At the other end of the spectrum, sales promotion spending was down. It’ll be interesting to see how much this recovers in Q4 2020, with the combined effects of a delayed Amazon Prime Day and the traditional run-up to the holiday season providing a potential boost. 

“As ad spend recovers in 2021, I would expect to see digital, direct response and sales promotions as the key categories for investment, as advertisers make the most of the move to online buying; something that increasingly appears to be a long-term trend.”

Michal Marcinik, CEO and Founder at AdTonos 
“It’s easy to understand the continued contraction across marketing channels, but looking to consumer behaviour cues, there are certain areas which provide a glimmer of hope. Audio budgets – which incorporate everything from traditional broadcast radio, to digital radio, and music streaming – were down 32 per cent in Q3, compared to down 50 per cent in Q2. However, in the first few weeks of the pandemic we saw audiences shift to digital radio because of the need for information and the intimate nature of audio, and this consumer behaviour looks to continue – eMarketer predicts that time spent with digital audio will increase 11 per cent as we approach 2021, to almost 79 minutes per day. 

“It’s possible that advertisers took lessons from the 2007/08 financial crisis and realised cutting entire budgets is not an option. The ability to utilise programmatic radio inventory offers advertisers a way to reach the same audience at a fraction of a terrestrial radio budget. The other driver for digital audio is the capability to run campaigns which precisely target audience groups and provide detailed post-campaign analysis, rather than pure run-on-network campaigns. Advertisers are prioritising their budget allocations to where there is a precise ROI measurement to make informed decisions.”

Pierce Cook-Anderson, Managing Director UK & NL, Smart AdServer 
“With budgets tight, we’re seeing buyers move towards private marketplaces as they seek to reduce wastage and increase the return on their media investments. With financial and operational efficiency of the utmost importance amid continued uncertainty, it’s likely the industry will continue to see demand and supply move closer together, with media buying becoming more direct, transparent, and accountable. This shift is fuelled in part by growing discontent for the untrustworthy practices of larger tech giants, with industry players demonstrating a desire to partner with more independent alternatives moving forwards.”

Ashwin Navin, Co-founder and CEO, Samba TV 
“There are parallels in the US  and UK advertising markets, with Q2 taking the biggest hit across the board. While the broader economic recovery has been slower in the U.K., we expect to see brands in E-commerce, Entertainment, and Pharma paving the way to recovery in Q4 and 2021. Taking into account the disruption that’s happened in traditional media in 2020, I would expect a vastly different and much more progressive media mix in 2021.”

Richard Wright, Head of Marketing, Scoro 
The prolonged contraction of advertising budgets will make the latest IPA Bellwether Report disheartening reading for many media agency leaders, who are already under pressure to do more with less. If cuts earlier in 2020 haven’t had an effect already, this report should act as an impetus for agencies to reform their processes with the aim of increasing both productivity and efficiency. 

“This means cutting out time-consuming practices, such as mandatory meetings that aren’t relevant to all attendees. It means allowing more flexibility for staff who should no longer need to navigate the rush hour to get to the office for 9am. And it means scrapping all the unnecessary apps and tech tools agencies stocked up on in the initial rush to prepare for home working, which have now become weapons of mass distraction and additional sources of worry for staff. These reforms can help agencies bring budgets under control while taking pressure off staff and allowing them to become more productive, positioning them for a bigger and better bounce-back in 2021.” 

Nicola Bevan, Managing Director of Operations, Xaxis EMEA 
“After a summer of restriction, it was likely the advertising forecast would remain muted. But that doesn’t mean advertisers shouldn’t focus on securing positive outcomes from the ad spend they have available to them during this time. As often happens during a recession, inventory prices drop lower, offering more accessibility for those advertisers keen to retain brand awareness. Yet advertising spend can deliver more than awareness, focusing effort on deliverables that will achieve core business outcomes and impact the advertiser’s bottom line. 

“As we head into Q4, a traditionally key consumer spending period, and look forward to 2021, prospects are more positive with confidence and spend intentions rising – up by 11.3 per cent next year. A continued focus on return on investment and targeting spend to achieve core business outcomes will put the digital advertising industry in a strong position to stabilise into 2021.” 

Chris Hogg, Managing Director EMEA at Lotame 
“With economic conditions predicted to make a robust recovery in 2021, advertising strategies will need to remain agile in order for marketers to gain a competitive advantage for the upturn. The term ‘the new normal’ has become ubiquitous with COVID-19 and while the accompanying uncertainty was initially received as disruptive and an obstacle to marketing strategies, it is now being seen as an opportunity – by those that get it right – to create a more reactive and better connected future for the digital industry. 

“Set against a backdrop of ever tightening privacy regulations and cookie deprecation, the new normal has meant the digital life of the consumer has become even more fragmented, adding further complexity to audience understanding. For marketers to build a panoramic view of their audience to be able to engage with real people, and their multidimensional needs and emotions, identity is an essential piece of the puzzle. An ever-growing market segment, identity may also prove instrumental in marketers looking to justify their ad spend in a climate where every marketing penny is under the microscope. The rest of the year remains a pivotal one for marketers looking to gain a competitive advantage in 2021, and it will be those who adopt a people based, privacy focused and open-to-all approach to identity that will have the most success in creating new opportunities for brands and publishers to reach their desired audiences.”

Jeremy Cartwright, Director Customer Success, UK, Nielsen
“The budget cuts as a result of the pandemic have brought the significance of accurate, trustworthy measurement to the fore. After all, marketers need to be able to squeeze maximum efficiency out of every penny when investment is tight. 

“A focus on effective measurement now will allow marketers to optimise their advertising spend through a strategic view of what is working today. Maintaining an emphasis on measurable improvement throughout this challenging time will put brands ahead of the curve, placing them in prime position to thrive when the economic forecast begins to improve.”

Rachel Powney, VP of Marketing, Dugout
“Ongoing uncertainty about consumer behaviour has meant muted ad spend figures overall, but silver linings are clearly visible. Online advertising in general, and video in particular, have fared significantly better than average, which shows advertisers are keen to capture the attention of more digitally savvy consumers, whether that’s when they are grocery shopping or catching up on sports.

“We’ve seen concrete examples of this; with an organisation such as the Thai Tourism Board using online videos featuring famous footballers to build up anticipation for when travel rules are relaxed and holidaymakers are once again free to visit. As we move towards 2021, and in-person experiences like going on holiday and attending football matches remain on pause, advertisers will have to continue to be creative and use digital channels effectively to retain the attention of remote audiences.”

Lisa Menaldo, Co-Founder, The Advisory Collective
“As expected, marketing growth remained slow in Q3 while UK businesses continue to adjust and navigate through the ongoing pressure of COVID-19. Understandably they are looking to protect finances to ensure their businesses remain sustainable throughout this period. Although some industry sectors have certainly fared better than others (digital and video) and more gains will be made into Q4, this will not be to the extent the industry would like to see. 

“Interestingly, even with mass job instability consumers are continuing to spend, with online sales increasing month on month. Unfortunately, many brands are missing out as consumer awareness is decreasing due to the lack of marketing spend. Q3 has been the largest overall quarter since Q4 2019, however, with the uncertainty of the ongoing pandemic and what Brexit will hold, for me, it would be correct to assume that a robust bounce back will not be initiated until Q2 2021.”

Rayhan Perera, CEO and Founder, OneDash 
“It’s no surprise events remain the hardest-hit type of advertising. However, it’s unwise for brands to completely pull back their marketing investments in this area, particularly when the shift to digital is likely to become a permanent feature of expos, conferences, and shows. 

“Instead, brands should be experimenting with what online events can do for them; embracing digital as a lucrative alternative for promotion, and exploring how interactive technology can boost personalisation and audience engagement, despite the lack of physical contact. For example, incorporating “shoppable” features for online runway shows and product launches. Brands who don’t allocate a portion of their marketing budgets to interactive online events risk falling behind the times, while those that experiment early will get a headstart on what is set to be the new normal for this category.”

Maria Cadbury, Director, We Are Spring
“The market continues to be cautious especially with threats of a second COVID lockdown, coupled with a no deal Brexit. That said, until we understand more on the implications of trade, brands will continue to look at business as usual, as they have done since Brexit became reality. We have seen shoots of green in a number of areas that favour e-commerce, despite seeing other categories reducing their marketing budgets.

“Influencer marketing is buoyant, especially in the gaming sector which has grown, as well as FMCG and beauty. The Voice business has also seen a strong upturn in use and attention in Q4 as advertisers see this as a unique new channel to address their audience at home. The latest developments in Actionable Audio Ads, and driving sales and lead generation from Voice skills – predominantly Amazon's Alexa's Skills across a plethora of categories – has really cemented this trend.”

James Patterson, VP Client Services, The Trade Desk
“To be truly resilient to the decline of ad spend, which doesn’t come as a surprise given it’s been a turbulent year for the industry, marketers must smarten up fast on the value of digital channels and make sure that every pound spent works as hard as possible.

“The need for adaptable and effective campaigns has never been greater and marketers are being afforded the perfect opportunity to better understand the flexibility and value of data-driven advertising. Getting the most out of tight budgets is about savvy prioritisation of spend, which is why, at The Trade Desk, we’ve seen investment in Connected TV boom this year, as more marketers use the channel as part of their omni-channel ad campaigns. 

“Looking ahead to 2021, the industry is moving towards a robust recovery. In the meantime, industry professionals must remain nimble and continue to plan ad spend strategically, strengthening their brands’ share of voice by embracing the power of digital.”

Mark Inskip, CEO UK & Ireland, Kantar (Media Division)
“With the end of the pandemic still out of sight, businesses are continuing to keep costs under close scrutiny. This quarter’s IPA bellwether report demonstrates that marketing budgets are still seeing the brunt of cost-cutting, albeit with slightly less severity than in Q2. This is despite ample evidence that in times of economic uncertainty, brands that maintain visibility, reap the rewards in share of voice and consumer engagement. 

“According to Kantar’s COVID-19 Barometer, UK consumers still have an appetite for ads, with only 15 per cent wanting to see significantly less advertising during this time. Clearly, consumers don’t want brands to disappear. It’s no surprise that, until businesses can see the light at the end of the tunnel, spend must be carefully managed, but chopping ad spend too harshly is unwise. 

“Instead, smart businesses will maximise ROI by carefully measuring each step of their campaigns, to ensure valuable and engaging content is appropriately targeted and delivered with flexibility. Brands who stay present in consumers’ minds through these tough times, will be well placed to benefit when - as forecast by this report - spend begins to lift again in 2021.”

Patrick Johnson, CEO, Hybrid Theory
“2020 has been hard on businesses to say the least. Marketing teams across industries are under more pressure than ever to ensure their efforts in media-buy, targeting audiences and improving campaign performance are efficient and sophisticated.

“By looking beyond the doom and gloom there is actually an opportunity for brands. The final quarter of the year is the lead up to Christmas and a peak time for consumer online shopping. Businesses that adapt and respond to the increased online purchase behaviour and with marketing that reaches both new and existing audiences, will be in good position for the year to come. It’s important to remember that consumer spending hasn’t shut down, some digitally focused business actually saw an increase during 2020. So it’s up to marketers to attract those that are spending with smart insights and connect them with their brands, seizing the opportunity.”

Craig Tuck, Chief Revenue Officer, The Ozone Project
“While lacking in surprises, the latest Bellwether Report is certainly reflective of a sector, like many others, that remains challenged and shrouded in uncertainty. While Q2 called for quick advertiser action, the budget revisions seen in Q3 appear much more considered - like a pause for breath as advertisers take the opportunity to re-evaluate and recalibrate.

While the pandemic has undoubtedly been the primary driver of these downward revisions, we continue positive conversations with our customers; be it about programmatic transparency, the power of first party data or delivering better business outcomes.

“The longer term forecast of a robust recovery in 2021 is a welcome sign, and we’re cautiously optimistic as we move into the final quarter of this year. Amidst the uncertainty, Christmas will still happen on the 25th December and I’m sure we’re all aligned in hoping that the tills jingle as much as the bells this year.”

Anthony Botibol, VP of marketing, BlueVenn
“Robust economic recovery has been predicted for the New Year, but it’s imperative that marketers understand and implement the necessary steps to get there. As furlough schemes end and 2021 budgets start to be considered, organisations have the difficult task of striking the right balance between marketing budgets and other resource needs. Businesses now need to be more strategic, looking inwards at existing customers to understand how to best serve and engage loyal groups. An organisation’s customer database, and the knowledge within, is the one thing that its competitors cannot touch. Focusing on lifetime value and ways to increase strategies to cross-sell or upsell amongst an existing customer base is one-way savvy marketers can replace the lost revenue from a reduced new customer pool. 

“The report suggests that the rate of adoption for programmatic advertising will decrease as we head in the New Year. As an industry, marketing is plagued by issues around ad spend wastage already. The problem lies in identifying where this wastage is occurring, due to lack of transparency in results and the inability to optimise effectively. Therefore, while ad budgets continue to undergo heavy scrutiny and digital advertising becomes more problematic, it’s paramount that brands review their advertising strategy and think about how they can better use first party data and invest in their systems to optimise their cross-channel marketing strategies.”

Niall Moody, UK Trading Director, Nano Interactive
“The latest Bellwether findings confirm what we have all been feeling over the last quarter – and indeed year. It has been a very challenging time, with our industry one among many to suffer the economic effects. No doubt, many budgets have been revised down, but digital advertising is as important as ever to businesses that need to find new and innovative ways to catch consumers attention when purse strings have been tightened. As consumers get used to the ‘stay at home’ lifestyle, many are spending more time online, which makes digital advertising a vital means to target consumers when they are most receptive. Advertisers are going to continue seeing the value – on both mobile and desktop – and that targeting the right consumers in the moments that matter is essential.

“2020 has been a year of disruption, but also one in which many issues have come to light. An important one for our industry is consumer concern around their data and privacy. 2021 will mark one year until the third party cookie is phased out for good, which means next year is going to be crunch time for brands and advertisers seeking alternative yet efficient means for targeting, and it’s imperative they make choices that do not compromise on consumer privacy and quality in the long-term.”

Jeremy Hine, CEO, MullenLowe Group UK
“The situation for 2020 continues to be challenging due to an understandable mixture of factors, from constrained budgets to ongoing nervousness and the unpredictable nature of COVID. However, the brighter outlook for 2021 suggests that, for the marketing industry as a whole, the impact will be contained to 2020 as brands look to bounce back strongly in the new year.

“As risks remain with the development of the pandemic and the Brexit transition, analysts are correct to be cautious. We do believe however that brands who invest ahead of the return to growth have an opportunity to make an outsized impact, so this is the course we will be advising our clients to take where possible.”

Emil Bielski, Managing Director UK, Croud
What a year to be a marketer. COVID-19 has forced marketing departments at brands both big and small to step back from business as usual and take a look at how they operate, from the tools to the agencies they use. Whilst the wider picture for the remainder of 2020 remains pretty poor, digital continues to prove resilient in comparison. We are lucky, because we have a number of bold clients who are investing in their future whilst the competition is lower. Sometimes bucking the trend can reap big rewards. At the heart of this picture is the buzzword of the year: uncertainty. The fact is we just don’t know what is coming, so it is positive to see the forecast for 2021 is a bit brighter as brands plan for the future. If marketers should take one thing away from this year it’s the need to be flexible. External factors that could cause loss of budget and talent aren’t over by any means, so the ability to be able to scale up and down will remain key – particularly when it comes to digital strategy. On the flipside, the need to base employees in expensive city locations has evaporated, meaning that companies will be able to become more talent agnostic and this can only improve how we all work going forward.”

Martin Vinter, Managing Director, Media, Ebiquity
“With the continued challenges presented by COVID-19 and the associated societal restrictions, it is no surprise that the advertising and media market continues to observe profoundly suppressed investment levels.

“While the downward trend is being bucked, recovery is going to be even more prolonged than some expected. The uncertainty continues to weigh heavy on the industry, as it does on all industries. Advertisers will need to focus on a ‘recovery strategy’ that considers the distinctiveness of each medium – even more so than before. Audiences and eyeballs are holding up generally for TV and digital – even increasing in some areas – but, naturally, it is a different story for areas like OOH and cinema.

“Reaching relevant audiences is getting harder – especially the ever fickle 16-34’s. Hence, pathing a road to recovery should focus on short term as well as long term metrics. Impacting brand and direct metrics in the current environment requires the full media planning toolbox. The craft of media planning, as well as a focus on media analytics and effectiveness are the three key factors in the path to recovery for advertisers.”

Niklas Bakos, CEO, Adverty
“The latest Bellwether report – somewhat unsurprisingly – showed that marketing budgets continue to contract amid the negative impact of COVID-19 around the globe.

“That said, while declines in ad spend were noted across all monitored categories, the report also pointed to a potential for robust recovery in 2021, with Paul Bainsfair, Director General at the IPA, adding that ‘those who can invest in marketing during the downturn will reap rewards’.

“The fact is, brands looking to strengthen their positioning and get ahead, must always be examining available marketing opportunities, whatever context they find themselves in. And, with large swathes of the population spending more time at home than ever before, we have seen the gaming category grow exponentially, with some of the most sophisticated brands starting to explore in-game advertising.

“In the so-called ‘new normal’, forward-thinking brands will prioritise innovative formats that offer genuine engagement, whether on or offline. It’s always been absolutely critical that advertisers follow the eyeballs.”

Tommy Torjesen, CMO and Co-Founder, Cavai
“The latest Bellwether report showed that marketing budgets continue to contract amid the negative impact of COVID-19, albeit at a softer rate than Q2. Declines in ad spend were noted across all monitored categories.

“That said, brands looking to get ahead of the competition would do well to embrace this challenge by continuing to invest in order to remain front-of-mind and gain market share from competitors.

“As firms learn how to operate in a new business environment, events were shown to have been the hardest hit category, and audiences are craving that personal touch. It’s for these reasons that we are seeing future-facing brands embracing conversational advertising opportunities. And we are heartened to see that panellists had noted an acceleration in the adoption of technology thanks to the need for social distancing.

“Looking forward, we anticipate a robust recovery in 2021, as firms continue to adapt– but it will be those that respond to consumer demand for one-to-one interactions that stand to gain the most. With service companies that rely on face-to-face engagement hit particularly hard, it’s more important than ever that brands focus on genuine, authentic and empathetic interaction with consumers.”

Matthew Goldhill, CEO and Founder, Picnic Media
“The IPA's Bellwether reports are always a good barometer of the state of the marketing business. While the latest survey, unsurprisingly, revealed a contraction in budgets given the ongoing pandemic, it was interesting to note the comments of Paul Bainsfair, the institute’s Director General, when he pointed out that those who can invest in marketing during the downturn will reap rewards.

‘In fact,’ he said, ‘because many advertisers do need heed this advice, just maintaining spend at normal levels leads to a greater share of voice and in turn greater brand share.’

“It’s critical that brands bear this in mind and strive to ensure that the formats they choose are sufficiently engaging, thereby enabling them to strengthen their positioning.

“In the latest Bellwether survey period, over half of respondents – some 52.6 per cent - recorded a decrease in budgets from three months ago, but what is key is the impact of the spend they do have available. With ongoing social distancing meaning that many companies are operating below full capacity, what money is spent has to work that bit harder.

“At Picnic, we are hopeful for a strong recovery in the new year, but whatever the outcome of Brexit negotiations, and however the pandemic evolves, what is key for advertisers to focus on is the delivery of high quality experiences.”

Simon Kvist Gaulshøj, CEO, Adnami
“The IPA Bellwether findings for Q3 will come as little surprise to most in the ad industry. However, I think we should be heartened that the numbers are going in the right direction given the pandemic continues to impact us all to varying degrees.

“It is reassuring to see the figures for digital media looking more robust than other sectors. I would urge marketers to continue investing in this space, as audiences are more present on digital platforms than ever, and digital offers more flexibility and control to advertisers than other media channels.

“As Albert Einstein once said, ‘in the midst of crisis lies a great opportunity’. I think the pandemic represents an opportunity to rethink digital advertising from being a pure performance vehicle to being one that delivers value across the funnel. With typical branding-building channels such as cinemas and outdoor being challenged by the pandemic, brands are looking for new ways to stand out, to grab attention and resonate with the consumer. They should be seeking strong, impactful opportunities within the digital space instead. High impact digital ads - namely a step beyond standard display formats – are becoming increasingly straightforward to implement but achieve exponential results for both publishers and brands. I believe digital high impact as a category represents an untapped opportunity for many.

“I would urge anyone in this tough climate to seek new and innovative opportunities rather than pulling up the drawbridge. Brands who don't will lose out in time ahead.”

Owen Hancock, Marketing Director, Impact EMEA
“The latest IPA Bellwether report showed marketing budgets continue to contract amid the negative impact of COVID-19, with declines in ad spend noted across all monitored categories.

“While this is broadly what we expected, it only tells one half of the story. What is arguably more important than ad spend is ad effectiveness – it’s what you do with the budget that counts.

“We continue to see significant success through our partnerships programmes, which I’m sure is one of the areas of digital spend that is helping keep the sector more buoyant than others. Furthermore, the technology we use allows for a greater degree of automation which is providing a huge help for those businesses who are operating at below full capacity as it allows them to free up vast numbers of man hours in the process of sourcing, onboarding and compensating affiliate partners.

“While consumer behaviours and media consumption habits have changed over the past several months, people are spending more time than ever online so finding effective ways to reach them via strong partnerships will always deliver value for money.”

Simon Barnes, Group Commercial Director, tmwi
“It is little surprise that marketing budgets remain under severe pressure in Q3 given the wholly unprecedented circumstances we are living through. However, I think we can take heart from the fact the numbers are going in the right direction, despite the incoming second wave and the rapidly approaching Brexit finale.

“I agree with Paul Bainsfair that ‘green shoots in the immediate term are increasingly unrealistic’ but I continue to counsel our clients that it remains crucial to maintain marketing spend. The natural instinct for many businesses back in April was to pause their adspend, but now the initial shock of the pandemic is over, brands must simply work to find a new way to speak to their customers.

“All our lives have changed but it is a reasonably short-term change and for that reason I expect to see a far faster return to healthy growth over the next 12-18 months. Advertising by its very nature has always been an adaptable industry but it will be the businesses - both clients and agencies - that demonstrate agility and innovation who will bounceback the fastest. Staying abreast of ever-changing consumer behaviour and upcoming trends will drive engagement for forward-thinking brands and help soften the impact of 2020.”

Amy Jackson, Business Director, Incubeta
“Consumer behaviour has been very unpredictable, and will continue to be as we have a tiered approach to lockdown. In areas where there are curfews we’d expect retail footfall to decrease, when actually the opposite has been happening as consumers take advantage of retail centres and brick and mortar nostalgia. Brands have recognised this as OOH advertising experience slightly softer cuts in the latest IPA Bellwether report. This coupled with online strategies will be the real test for budgets in the coming months. 

“Those businesses which are highly reliant on EU export may need to refocus international spend to an at-home audience if tariff-free access to other markets is revoked due to Brexit. However, I’m confident marketing budgets will bounce back. Businesses have access to informative data and insight and are living and breathing the same day-today as the consumers they market to. I’m confident there will be an increase in marketing spend in 2021 as brands and consumers walk out of the dark together.”

Sanjay Nazerali, Global Managing Director & Chief Strategist, Dentsu X
“There will be no 'recovery' as such, instead we will see a metamorphosis within the industry. The changes in consumer behaviour we are witnessing  are movements, not trends, which have emerged and become cemented during the pandemic.  Many people have discovered a “return to self”, with an inward focus on their families and communities.  As further restrictions are put in place it will be businesses which have bucked the trend and reinvented themselves, both online and off, that will succeed during these adverse times. This new attitude won’t be easily reversed, even when advertising levels grow and stabilise. Instead there will have to be new ways of operating to reach and interact with consumers.  

“So, while we will certainly see a return to growth in marketing spend come 2021, I believe the nature of how marketing is conducted will have to drastically change.” 

Ben Barokas, Co-founder and CEO, Sourcepoint
“The findings accurately reflect the difficult and turbulent time that the entire world is experiencing in the midst of COVID-19, and we’re not out of the woods yet. As the industry battles against not only the pandemic, but major ecosystem challenges as a result of the loss of third-party cookies and privacy , consent  and digital citizenship will continue to rise in importance for both advertisers , publishers and other ecosystem participants..

“Advertisers should be investing their existing budget into high quality compliant inventory, where there is explicit consent from consumers. With consumer ad spend declining, negating any reputational or legal risk will become vital to brands to remain in favour.  At the same time, publishers need to diversify how they generate revenue streams beyond advertising. Although website traffic is skyrocketing due to restricted movements and isolation, publisher revenue has continued to contract. So, it is likely we will see a trend for publishers to begin experimenting with ‘consent or subscribe’ experiences to help them survive, as ad budgets continue to shrink. 

“The digital ad industry is one of the most resilient and adaptable ecosystems to exist today and I know we will see a robust return in 2021 as the latest IPA Bellwether report predicts.”

Emily Brewer, Head of Publishing, Teads
“Despite the negative sentiment of the report, we are remaining positive on prospects for Q4 2020 and growth leading into 2021. As we have seen, brand priorities have changed from Q2 to Q3 with a significant increase in uptake for performance over brand advertising.

“As consumers rely more heavily on online for news, brands are looking to take advantage of increased readership and have moved to premium publishers, where they can guarantee a responsible advertising approach. Furthermore, the move for publishers to embrace or accept lower funnel offerings has allowed them to maintain revenues with top brands, which in turn has helped them to navigate Q3, and look to compete at a greater level with social platforms.”

Leigh Gammons, CEO, Cognifide
“It’s clear that as a result of the ongoing uncertainty surrounding the pandemic, we’d witness reduced budgets over the past quarter. However, brands need to continue investing in marketing if they’re to get ahead in the economy’s recovery post COVID-19.

“It is somewhat reassuring, though, to see online is the least affected category as all brands, especially those who have traditionally operated in the brick and mortar space, now need to harness the power of online in order to capture the attention of their customers at home. For B2C brands, this means bringing the shopping experience to where the audience’s attention is and, by investing marketing budget in apps and the digital experience, they can boost the potential of impulse-driven purchases to grow their business.

“Focusing on online trends and technology solutions that are already in play will allow brands to quickly adapt their marketing strategies in order to successfully embrace the change we’re all experiencing. With budgets remaining tight every penny will count, so marketers should prioritise and choose what they invest in carefully to ensure their online spend brings tangible returns and makes the most of their current business capabilities.”

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