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IPA Bellwether Report – the industry reacts

David Murphy

The IPA’s Bellwether reports are always a good barometer of the state of the marketing business, so with the Q4 2019 report released this morning, we’ve gathered the reactions of some of the companies and executives on the digital marketing coalface…

Ben Walmsley, commercial director of publishing, News UK
“Whilst the outcome is divisive, clarity over Britain leaving the EU is what the media industry has been waiting for. The modest anticipated growth in main media advertising is a reflection that while many spending decisions were on hold for both businesses and consumers last year, a measure of confidence is now returning. The current relative political stability means we will start to see a renewed focus on growth, rather than retrenchment.

“Of course, it’s likely that EU trade negotiations will return to the top of the news agenda in the latter part of 2020 with the threat of another cliff-edge restraining growth to some degree. In the meantime, smart advertisers are taking the opportunity to invest in brand-building through main media, thereby capitalising on the more favourable economic climate. For premium publishers this is welcome news as marketers favour solutions that have the greatest impact on brand preference and consideration.

Zack Sullivan, CRO UK, Future Publishing
“This latest IPA Bellwether Report is a positive start to 2020 and the rise in marketing budgets signifies a new wave of confidence in the industry. It comes as no surprise that digital remains a highly lucrative advertising channel and to ensure this ad spend remains steady, publishers must focus on delivering a brand-safe, transparent, relevant environment to their advertisers.

“At the end of last year, 88 per cent of AOP board members stated non-advertising growth as a priority for 2020, meaning media owners are already recognising the opportunity to diversify their revenue streams rather than solely relying on advertising as a source of income. The publishers that put their plans into actions this year and implement these alternative monetisation strategies, such as e-commerce and online video, will reap the benefits of the increased spend.”

Mike Klinkhammer, director of advertising sales EU, eBay
“As we emerge from the shadow of the political and economic turbulence of 2019, it’s a relief to see marketers are more confident about the year ahead. That being said, uncertainty still lies ahead, and marketers may yet have to steady the ship, depending on the outcome of this year’s political events.

“When it comes to online advertising, once again it’s no surprise to see this sector doing well. However, digital marketers need to stay on their toes, as the looming ‘death of the cookie’ forces the industry to consider how it reaches relevant audiences. This could affect independent publishers in particular, which are under increasing pressure to compete with powerful walled gardens. These publishers face the challenge of positioning themselves as a credible alternative, while the rules of the game – and technology involved – are increasingly controlled by the giants of the industry.”

Paul Gubbins, global programmatic strategy lead, Unruly
“Every sector has been deeply impacted by the ‘will they, won’t they’ carry on of Brexit, and whether you like it or not, a more stable answer on the issue is finally providing the breathing room needed to start – dare I say it – planning for the future. This is something signalled clearly by the notable upswing in people’s optimism and positivity towards the industry in the Bellwether report.

“The good news is: businesses want to spend again. They have budgets to play with that were previously on ice, and they’re being spent across the media mix – with internet marketing (including mobile channels) continuing to perform strongly. This is in line with the latest IAB report which showed more budget than ever before is entering the digital advertising ecosystem in particular; and it’s all to play for. I’ll be especially interested to see how the injection of linear TV budgets affects the mobile industry, as more people are being attracted away from traditional broadcasters to addressable and mobile video formats.

As always the key to success will be transparency, trust and well-targeted, meaningful campaigns. Every aspect of our industry is more transparent than it ever was – and there is nowhere to hide; everything we do has to add value and be meaningful.”

Andrew Morsy, managing director international, Peer39
“Marketing budgets increased at the end of last year for the first time since Q1 2019, a sign that companies have used the difficult year to reassess their strategies. It’s reasonable to suggest that efforts to find new business leads in preparation for the new year, and a push on brand awareness are also responsible for the renewed investment.

“Many will be relieved to hear that digital’s presence has continued to remain a priority for marketers with ad spend predicted to grow 1.8 per cent throughout 2020. But they will also be keenly aware that increasing browser restrictions may impede this growth in the future. Recognising the value of working directly with digital publishers and having a compliant data targeting strategy is key to a strong ad industry.”

Justin Taylor, UK MD, Teads
“It is fitting that advertisers should start the new decade feeling cautiously optimistic, as evidenced by the IPA in its Bellwether report for the last quarter of 2019, particularly as this mirrors increasing consumer confidence.

“With a new government, it seems that there is now a definite and clear direction for the UK, following the uncertainty of much of last year - though the report also notes some marketers remain concerned about the knock-on effects of Brexit.

“With increased industry confidence comes an increased ability to plan, trade and execute for brands and agencies alike. We are also seeing a new focus on responsible advertising and expect that trend to accelerate, particularly as premium online publishers offer up real media environments that ensure a clear ROI delivering business results.

“For advertisers that means they can reach the right (and engaged) audiences in more transparent, brand safe and privacy compliant ways. The ecosystem is shifting and that can only be a good thing for brands, publishers, readers, even society itself.”

Niki Stoker, COO, A Million Ads
“The latest IPA Bellwether brings with it positive news on an expected upturn in spend in 2020. The winners are cited as OOH and audio with +6.3 per cent of companies expecting to see greater spending on big-ticket ad campaigns in these channels. This is likely to be in response to a strong year for audio which delivered better engagement, higher recall and personalisation at scale. Marketers will spend on channels this year that have proven results and that continue to push the boundaries of innovation creative married with data led performance.”

Jem Lloyd-Williams, UK CEO, Mindshare
These latest results signal a recovery of confidence, now that the election is done and Brexit feels more certain to happen.

“With the turbulence of 2019 behind us, we can see businesses getting back on the front foot and unlocking marketing budgets. Keeping audience at the heart of everything we do remains key, of course. To encourage consumer confidence, we need to show people we understand their needs, desires and concerns better than ever during 2020. How Brexit affects the country – emotionally and economically – remains difficult to accurately predict.

“I believe, too, that people’s concerns about the climate crisis conversation are likely to heighten as words turn more into action. We all need to work out how we can help businesses develop a point of view on their role in those discussions. Lots to think about as we move through what I’m confident will be a challenging but fruitful year for UK businesses.”

Jenny Antoniou, publisher account director, Telaria
“It’s clear the industry is coming out of a period of uncertainty and, although there is no real increase to main media advertising – including TV – it’s encouraging to see that 2020 is forecast to be a good year for ad spend (predicted to increase by 1.8 per cent). With consumers increasingly watching content across multiple platforms, and the subsequent rise of connected TV continuing to drive even greater digital spending, we can expect to see this growth come, in part, from digital video budgets.”

“As budgets in the area of digital video do grow, it will become crucial for agencies to converge them into a single pot for all TV platforms, to ensure linear and digital spend complement each other. This, in turn, will not only fulfil the campaign needs, but enhance the campaign performance, and aid the continued growth of the industry.”

Hanna Fritzinger, head of marketing, Sovrn
"It’s encouraging that ad spend is predicted to grow 1.8 per cent in 2020, and we’re hopeful this trend continues. We do expect data privacy regulations to continue driving an increased emphasis on the quality of online inventory. With advertisers starting to narrow the number of partners they use, we expect that 2020 spending will be focused on efficiency and transparency."

Jeff Pfefferkorn, head of UK sales, MainAd
“It is pleasing to finally see some optimism and growth in marketing budget forecasts after what has been a bumpy year. The latest report highlights just how much the advertising industry is dependent on a stable political climate, something marketers need to consider for the future, as political instability will always be a possibility in years to come.
“With this in mind, marketers should have a contingency plan in place, and ensure that their strategies are constantly evolving for the highest return on investment. They should relish the current period of optimism, and use it to embrace newer formats, such as in-app and video advertising, allowing them to reach their target users, and potentially whole new audiences, and deliver relevant and engaging ads.”

Luke Judge, CEO UK and US, Incubeta
“What a start to the new decade. The IPA reports a renewed wave of optimism in the final quarter of 2019 following a subdued start to last year. Budgets were tempered early on amid high uncertainty and a volatile economic climate, and they are now (slowly) warming back up.
“It is no surprise that internet marketing retained its status as top performer with some 7.9 per cent of UK companies increasing budgets in Q4. This in part is owing to marketers increasing the pursuit of data-driven advertising campaigns and embracing new online marketing technologies, increasingly built with machine learning to enable automation and drive growth.
“Looking ahead, the real growth opportunity for brands lies in their ability to seamlessly integrate their technology stacks with the creative and media opportunities in order to reach their customers in the most contextual, relevant, and efficient ways – something that will deliver ROIs tied to the business bottom line.”

Ben Little, founder and director, Fearlessly Frank
“There will have been a collective sigh of relief at the release of the IPA’s Bellwether report for Q4 2019, which shows modest growth for marketing budgets after two successive quarters of contraction.

“The report suggests that budgets will continue to rise throughout this year, buoyed in part by a bounce in confidence amongst some panellists following the General Election and the subsequent alleviation of political uncertainty surrounding Brexit.

“However, industry optimism must not be measured by rises and falls of budgets: the malaise goes deeper than that. It is a myth that greater marketing expenditure leads to growth – it might drive sales, but at what cost?

“Businesses must think with clarity and purpose about what growth entails. Real, sustainable growth is only available by pulling the levers of strategy, innovation and ingenuity alongside investment.”

Amit Kotecha, marketing director, Permutive
“There was good cheer in the last quarter of the year as advertising budgets once again showed growth – after two successive quarters of contraction. And once again, internet advertising was the ‘stand-out’ performer in the IPA quarterly Bellwether report, with marketers citing technological advances as an opportunity for businesses heading into 2020. Marketers surveyed believe data-driven ad campaigns, automation, and AI-driven software would help facilitate business growth.

“However, this growth comes with a note of caution. Even though internet advertising budgets grew by 7.9 per cent in Q4, which was less than the 11.1 per cent posted in Q3, and marked the third subsequent quarter in which growth has eased.

“GDPR, CCPA, the ICO investigation into real-time bidding, together with the move by browsers to more privacy-compliant browsers by design, means that data-driven advertising is under increasing scrutiny from all corners. The smart advertisers and publishers will put privacy first and leverage their own data assets to drive business growth as the third-party cookie crumbles.”

Amy Jackson, account director, NMPi
“Finally, some light amongst the dark with a monumental shift in attitude to not only increasing budgets, but to business growth and a new optimistic approach in marketing return. If the Bellweather report tells us anything it's that 2020/21 is forecasted to be the year 2018/19 wasn't in terms of finally putting into motion digital marketing plans which have somewhat been hindered.

“With digital marketing continuing its reign as the stand-out performer, efforts to enhance digital activity is great news for Search channels, especially SEO since the arrival of BERT. Whilst we have seen a great appetite for upping spend on search, display and social over the past quarter, full-funnel activity remains to lead as businesses home in on the advantages of data and cross-channel approaches.

“Without wanting to bring the positive tone down, the impact of uncertainty cannot be underestimated, and factors of 2019 which led to frozen budgets and delayed decision making is still real but very much dependent on the vertical. Each industry should be treated with its own pressures and opportunities in mind when it comes to scaling up, but overall a very positive outlook for a new year.”

Philip Acton, UK country manager, Adform
“After an uncertain 2019, it is encouraging to see marketing spend increasing with an optimistic and positive forecast for 2020.

“This report offers a promising outlook for the advertising industry, enabling individual companies to continue to work together towards creating a healthier supply chain, and invest higher budgets into transparent and open advertising solutions.

“Economic and political confidence will also allow the industry to allocate more budget towards the respectful handling of consumer data. And, with the ICO’s latest warning against practices that violate GDPR, marketers have no excuse not to comply.

“With budgets increasing, we also expect to see further allocation into a variety of online and offline channels, such as DOOH, with brands and advertisers alike investing in cross-device targeting that is coherent and adds value to every stage of the consumer journey.”

Ben Samuel, VP sales EMEA, Nielsen Marketing Effectiveness
“While it is great to see an overall growth in marketing budgets, the amount of spend allocated to digital marketing – in comparison to the more traditional channels – reflects how some marketers hold digital platforms to a different standard compared to offline ones. Nielsen’s recent research demonstrates this, finding that marketers often base budgeting decisions on a perception of effectiveness rather than a solid understanding of it.

“In today’s omnichannel industry, however, the truth is that marketers need a stronger, more quantifiable, and more holistic knowledge of how individual marketing channels impact ROI. With credible data measurement that allows them to compare cross-channel metrics, marketers will improve the quality of their insights and become smarter with their ad spend. This will likely be a factor in driving the predicted growth of main media advertising.”

Libby Robinson, managing director EMEA, M&C Saatchi Performance
“The latest IPA Bellwether report clearly shows that political and economic uncertainty is diminishing, with marketing budgets increasing and expected to continue to grow in 2020. It’s an encouraging start to the new decade, following a year of slow industry growth in 2019.
“As digital ad spend continues to increase, advertisers must ensure marketing budgets are used in more efficient and accountable ways. The focus on performance and return on investment will be higher than ever and marketers need to concentrate efforts on precisely tracking performance throughout the funnel to increase transparency and minimise inefficient touchpoints.”

Tamara Littleton, CEO, The Social Element
“There’s plenty to be excited about for 2020, and marketers are clearly feeling more optimistic as we enter a new decade and more possibilities for creative and effective marketing emerge, allowing advertisers to approach marketing on mobile in ever evolving ways. The report has found that that ‘internet’ advertising is outperforming as businesses focus on their digital presence – it’s clear that mobile is the future, and it’ll keep being a fast-changing environment for advertisers to keep up with.

“Instagram has already experimented with removing ‘likes’ internationally – and if this comes to the UK, it’ll be a new challenge for advertisers who have become familiar with what Instagram means today. The rise of Tiktok is set only to continue, and you can bet that other Chinese brands will be watching its success closely – and beginning to make their own moves into the Western market. WeChat, owned by China’s Tencent, is hugely popular in China but hasn’t made a dent in the West yet, but its multi-purpose capabilities mean there’s no reason why it shouldn’t. As investment increases on social, advertisers would do well to keep a close eye on TikTok and other platforms with serious financial backing from the East that may yet prove popular here.

“We may not yet be out of our uncertain times given the lack of clarity of Brexit – but there’s a case for welcoming change and uncertainty: I hope mobile marketers will take up the challenge.”

Laura Gibson, head of social, Cheil UK
“Breaking from the shackles of uncertainty and hesitancy, marketeers can find real success by investing in digital. As expected, Internet marketing continues to outperform with no signs of slowing, and adspend is expected to improve in 2020 and beyond. Previous quarters’ reports show investment in social has remained consistent, which proves it’s still a strong and viable option for marketeers expanding their brand’s presence across digital.

“But with this expectation comes great responsibility, and by that I mean a responsibility to your audience. Marketeers need to be more aware than ever of who they are talking to and how they consume their information. Whilst 2019 brought political uncertainty, we also saw brands being called out for their lack of authenticity, so if media spend goes up and more sponsored posts appear in news feeds, then marketeers need to make sure that content is more relevant than ever. It’s important to remember that your audience is smart and understanding them is key.”

Kevin Joyner, director of planning and insight, Croud:
“While the jury may still be out on Boris’ government, his majority re-established market stability, and we are seeing businesses willing to invest money in advertising once again. Digital ad spend is on the rise, which comes as no surprise: a strong online presence is paramount to success. New online marketing opportunities continually emerge. These include Connected TV, growing social networks such as TikTok, and Cloud computing platforms that make the application of customer data increasingly accessible for online advertisers. It will be interesting to keep a close eye on the tools brands choose to invest in over the coming months, in order to help them navigate the complex growing digital marketing landscape.”

Danny Donovan, MD, MullenLowe Mediahub
“This quarter’s IPA Bellwether report shows that marketing budgets are increasing for the first time since Q1 2019, despite the ONS finding this week that GDP fell by 0.3 per cent in November. The report indicates that marketers are taking the advice of their agency partners and recognising that brands that invest in marketing during difficult economic times are those that succeed.

“However, the future isn’t all positive and the industry isn’t out of the woods just yet. While the ad industry will undoubtedly welcome the return to growth in budgets, and hope that the touted “Boris Bounce” emerges, there is a long way to go on trade negotiations, which will mean continued uncertainty.

“To ensure continuing budget increases, agencies must prove themselves to their clients. This means building trust by focusing outcomes. Work that builds brands, has creativity at its heart, and drives business value for clients as its goal, both now and long term.”

Charlie Johnson, VP UK and Ireland, Digital Element
“The results of this quarter’s report shows a much more positive outlook for marketing budgets compared to the previous quarter, most likely as a result of the stabilising political and economic landscape.

“It is unsurprising to see internet marketing as the stand out performer and investments in this area will remain a top priority for the next decade at the very least. Technological advances are understandably also heavily featured in the report and in 2020 the key focus for businesses should be to utilise this development to enhance their online presence across multiple platforms and environments. And at the core of this is high-quality data, to not only drive advertising/marketing campaigns but to also provide the best method of effectively and efficiently facilitating business growth in the long-term.”

David Barker, managing director, EMEA, Samba TV
“It’s particularly promising to see strong performance for digital spend at a challenging time for the industry. Uncertainty due to macro events is a given, and highly discussed, but less is said about how major consumer trends such as the explosion in ad-free, subscription-based video streaming services (SVOD) has led to major advertisers questioning the effectiveness of linear advertising to reach these ever-increasing elusive audiences.

“In fact, the shift to SVOD has led to the emergence of various online tools and techniques cited in the report; these are both a cause and effect of growing digital spend. For example, advertisers increasingly have access to opted-in technologies that learn about audiences through connected TVs and use these insights to serve ads across CTV and associated digital devices such as mobile phones. It’s only through these types of innovative technologies that online marketing budgets can continue on their current growth trajectory through 2020.”

Niklas Bakos, CEO and founder, Adverty
"With an expectation laid out in the report that budgets are set to increase in 2020, smart brands will now seek out spending their increased budgets where users’ attention has gone: into mobile apps, where recent research from the US suggests the average smartphone user spends almost three hours a day.

“The promise for programmatic in-app advertising is one of immersive experiences, superior measurement, long dwell times and targeting by user/ad ID. But to date, in-app advertising has been poorly exploited, with an excess of initialisation ads and reward videos and minimal brand advertising. Even those selling today’s in-app inventory still have a lot to learn. We now have the promise of additional spend from the brands and it is time to ensure that mobile delivers strong performance and results to justify their spend.”

Ed Preedy, CRO, Cavai
"The results of the IPA Bellwether heralds strong promise for the digital marketing industry - finally! We now expect to see the increase in spend head towards contextual targeting, machine driven and conversational advertising. Automation and AI feature well in the report and companies that can deliver a strong proposition in this area will see an increase in spend in 2020. It is now our responsibility to prove how digital efficiencies with better use of data will deliver strong returns for marketers increased spend."

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