Yesterday’s IPA Bellwether report did not spark immediate panic among performance marketers, with marketing budgets remaining on an upward trajectory in the short-term. But the challenges ahead – and the corresponding cuts to adspend forecasts – did not go unnoticed.
The moves to the cookieless future, potential looming budget cuts and the almost certain pending dreaded ‘R’ word are among the many issues that may encourage an attitude of ‘doing more with less’ despite extensive evidence that cutting marketing spend does more harm than good.
The mood among industry leaders though is solution-focused – and how marketers can increase exposure, sales and demonstrable results is now at the forefront of the minds in marketing and adtech. PMW spoke to our industry’s commentators to get their take on what’s in store and how the industry can still forge ahead.
The marketing budget paradox
Predictably, potential cuts to marketing spend are playing on some minds…
“CMOs may fail to hang on to marketing budgets – but try they must”
Justine O’Neill, Senior Director, Analytic Partners: “After the optimistic start to the year, reality is back to bite with the prospect of a looming recession, increasing costs and an air of stagnation in media markets. There will be tough conversations in the boardroom as CMOs fight to hang on to their marketing budgets.
“Fail they may but try they must. We applaud those businesses that have signalled their intent to market aggressively to support their brand because this will help them gain market share from less prepared competitors. Data gathered over two decades in Analytic Partners’ ROI Genome reports, shows that 60% of brands that raised their marketing investment during previous recessions saw improved ROIs and a 17% increase in sales.
“Marketers should use this period to test and learn consumer-centric messaging delivered through an omnichannel approach to balance long term brand building with short term promotions and activations that position their businesses as supporting customers through hard times as this will gain and retain loyalty in the long term.”
Pierce Cook Anderson, Managing Director, Northern Europe, Equativ: “The signs are that we are sliding into a recession and, from a technical perspective, are probably already there. The downturn will likely last for some time, impacting overall marketing spend and leading to further budget cuts in Q3 and beyond as clients shift spend.
“But shutting down marketing budgets and media activities completely is not the correct response to this complicated economic situation. Certain sectors will still need to advertise, and should be able to afford to do so. The challenge is finding the right balance and the most effective methods. In other words, buyers need to adapt their strategies and create greater cost efficiencies to drive ROI by targeting quality over quantity. This means investing in the open web and relying on trusted partners that will ensure efficient media buying – notably by offering curated marketplaces and contextual targeting, which will become even more relevant in a cookieless future.”
Anastasia Leng, CEO and Founder, CreativeX: “Inflation. Layoffs. Recession. They're words we're getting tired of hearing, but it seems we're not hearing them enough. The latest IPA Bellwether report contains some encouraging news thanks to sustained budget growth, but that only highlights half the picture: in real terms, today’s marketing budget has about 80% of the spending power it did when it was first agreed upon late last year – leaving marketers grappling with pressures to do more with less.
“There's tremendous talk of cutting costs and cutting teams, but those changes won't fix the entire problem: they're symptoms, and not the disease. A leaky bucket with less water still leaks, and marketers still carry around tremendous inefficiency in how they operate. For example, while much of their budgets go towards image and video ads, the Creative Quality Score of those ads is incredibly low: the average is 28%, which means over 70% of creative work is inefficient – this can mean millions in wasted advertising spend.
“Budget increases are indeed positive news, but they can mask the problem, which is not the size of the budget, but its ability to deliver our desired results. Brands like Nestlé are already reaping the rewards from making their budget go further, with the food and beverage giant reporting a 66% boost on its return on ad spend through unlocking creative data. Recessions are undoubtedly painful, but they're moments of opportunity to make our processes and ways of working more resilient, and those changes will yield ROI for years to come.”
John Stoneman, SVP, Global Demand, TripleLift: “Although the financial headwinds have impacted the growth of main media marketing budgets, we continue to see steady demand flow through our exchange. Buyers understand the value of programmatic media trading as a proven and efficient way to reach their target audiences. As the route to the consumer becomes more complicated, less trackable, and overall more expensive, investing in Supply Path Optimisation is crucial for marketers to gain a better understanding of their investments, cut further waste, and improve their KPIs.”
Rik Moore, Managing Partner of Strategy, The Kite Factory: “The tone of the latest IPA Bellwether report is hardly unexpected given the cost-of-living crisis and ongoing war in Ukraine, but it still makes sobering reading. The challenge now for marketers is how to justify protecting marketing spend, balance investment in both the long-term brand and the short-term activation and thinking about how they can maximise relevancy to their audience. People are struggling – is there something your brand can do to help?
“What is striking about this latest report, unlike previous quarters, is the disappearance of language around ESG topics, particularly sustainability and the environment. Understandably, given the economic climate, the perspectives seem to have moved from the bigger picture to seemingly more pressing immediate market-level concerns. This is of significant concern, as, given the extreme weather events we’ve seen in the last week alone, the industry cannot take its collective eye of the necessity for brands and the advertising industry as a whole to play a key role in fighting the climate crisis.”
Andrew Stephenson, Director of Marketing EMEA, Treasure Data: “Efficiency will be the name of the game for marketers digesting today’s IPA Bellwether report, while staring down budget cuts, rising costs and an increasingly likely recession.
“The recent government campaign to divert marketing budgets in favour of price cuts for consumers neatly summarises the battle marketers face in proving their value-add. But marketers know that building brand loyalty – particularly during a time of economic downturn – will significantly help businesses weather the coming storm.
“Marketers, therefore, have a distinct opportunity to prove their worth against a backdrop of cynicism and scrutiny. Loyalty can be earned by providing a frictionless experience and pre-empting customer needs, but to do this effectively, marketers must have the tools and skills to collect and connect customer data to achieve full visibility of the customer journey.
“A robust data management strategy will be critical to this; unlocking deeper connections with consumers, while delivering the efficiencies needed to insulate against budget cuts.”
Jay Stevens, CEO, Redmill Solutions: “Given the current economic climate, media spend cuts are to be expected. But with so much financial uncertainty ahead, brand advertisers need to be able to identify where to make these budget changes, and by how much. These often complex decisions can put pressure on CMOs; they need to have a clear line of sight on their global media data to justify spend and make informed decisions on any cuts.
“Better media data visibility allows brands and agencies to quickly pinpoint, and eliminate, inefficiencies and stay agile in response to unforeseen challenges. In this way, they can maximise ROI and reduce waste to future-proof budgets and campaigns in an ever-changeable industry.”
Nick Reid, SVP and Managing Director EMEA, DoubleVerify: “It’s positive to see that UK marketing budgets have been revised up for Q2. However, with IPA Bellwether forecasting a drop in ad spend and a dramatic fall in financial prospects, the industry must build resilience and protect its investments in the face of strong economic headwinds.
“The need to manage and drive media quality, as well as ensure that every penny invested reaches the right audience, in a fraud-free, brand suitable and viewable environment, is more important than ever. Measuring media quality is critical, but using such data in pre-bid environments, across all channels, to drive better business outcomes is where brands and agencies must focus. With macroeconomic conditions meaning advertising budgets are under increasing pressure, it’s crucial that investments are not only secure, but bought on the baseline of an authentic ad and deliver meaningful and productive business outcomes.”
Verity Brown, Managing Director, The Specialist Works: “We are only at the beginning of a very tough period for consumers. While many businesses pivoted to omnichannel models in lockdown, previously high opportunity audiences are going to be financially squeezed. Unsurprisingly, ‘video’ and ‘other online’ remain strong, they deliver targeting opportunities, the ability to communicate both brand values and drive performance. There is extensive evidence they deliver a return in a downturn.
“Our research on consumer attitudes to the energy crisis shows the hardest hit are families aged 35-54 across most income groups, the core audience for most omnichannel brands. However, there are other groups who are still spending. Our view is that many brands should reassess their strategies, and consider targeting groups who still have disposable income and also find different ways to support the hardest hit.
“Consumers are switching brands, which provides a great opportunity for ‘challenger’ brands. There is substantial evidence that brands that continue to invest in comms in a downturn are more successful, there are channels proven to deliver and specific audiences who are still relatively affluent.”
Getting (and measuring) attention
Here at PMW we’ve long been discussing the merits of attention as a core indicator of success, and our commentators are quick to point out the benefits.
“Attention has the potential to be one of the defining metrics for the industry”
Heather Lloyd, Head of Product Marketing, Nano Interactive: “It is heartening to see that marketing budgets are continuing to grow in the latest IPA Bellwether report. That said, marketers are continuing to struggle with the challenges of measurement as we get nearer to the deprecation of third-party cookies.
“The reality is, we are living in a world where the path to purchase is far more fragmented and the average person is estimated to be exposed to 4,000 commercial messages a day. As a result, working towards the opportunity to see no longer goes far enough and a better understanding of the attention that was likely paid to the ad is much more significant.
“One way to do this is to look at time-in-view which is defined by the length of time a creative is in view for and how this correlates to uplifts in key brand metrics. A longer time-in-view means the user has more quality time engaging with the ad message, which in turn generates higher uplifts in brand metrics.
“Ultimately, attention has the potential to be one of the defining metrics for the industry but we need to come together to test and learn to find a clearer definition. Once this has been achieved, we will all be able to reap the benefits of this new privacy-first advertising era.”
Matt Nash, UK Managing Director, Scibids: “With adspend budgets set to decline, advertisers need to ensure now more than ever that their campaigns are delivering ROI. Indeed, the death of the cookie is challenging brands to reimagine their digital advertising and powerful artificial intelligence (AI) is one way to boost campaign performance.
“Contextual signals based on anonymous interest cohorts are quickly becoming the best data point to maximise traditional metrics like CPA, CPV and newer metrics like attention. These signals are privacy-compliant as they do not track users between websites or capitalise on personal data. Additionally, they eliminate the issue of consumers being shown the same ad repeatedly when the likelihood to convert is not present. AI can be used here to build bespoke data sets which constantly evolve and have the ability to reallocate budgets in real time. Together, the two achieve campaign efficiency at scale, garnering user attention when brands need it the most.”
Paul Coggins, CEO and Co-Founder, Adludio: “While the forecasts from this IPA Bellwether are understandably deflated by recent economic uncertainty, it is clear from the resilient growth figures for online marketing that there is still a hunger for digital transformation. Indeed, the experience of the past few years has solidified digital as a stable source of revenue. However, with a reduction in ad spend predicted, coupled with an already saturated market, it is now more important than ever that brands are cutting through the noise and maximising attention with the best possible creative.
“In mobile, where we spend most of our digital lives, channelling budgets toward new, innovative technologies can help boost campaign engagement. In particular, those which use AI-based algorithms, leveraging interactivity and historical creative data, can shift targeting away from third-party data and social demographics toward a much more effective approach built on first-party behavioural data. This can then be used to more accurately target audiences. Additionally, as this data is anonymised, it complies with the privacy-first future of media buying. As we enter a potentially difficult economic period, having ad campaigns that forge these meaningful connections between brand and consumer will be imperative to protecting revenue streams.”
Ronny Golan, CEO and Co-Founder, ViewersLogic: “Turbulent economic conditions have upended most predictable trends in consumer behaviour that marketers rely on for their media planning. To prevent drops in sales that will place further pressure on already beleaguered businesses, brands must pay close attention to the rapidly changing behaviours of the individuals that make up their target audiences. The accepted wisdom that probabilistic models deliver these insights falls short of the reality of actual consumer behaviour. In short, they are simply no longer fit for purpose. In dynamic environments, only single-source data can provide an accurate reflection of current consumer behaviour enabling brands to engage consumers where they are today, significantly reducing waste and maximising campaign efficiency.”
Isabella Jenkins, Agency Partner, Permutive: “To ensure advertisers are capturing consumer attention and making the most of their budgets, they need to be conscious of the changes happening around them. Adspend forecasts for the next couple of years are being cut, and in an industry facing dwindling consumer trust, advertisers need to create a new responsible digital ecosystem.
“With reducing media budgets, advertisers need to work with partners that can provide consented first-party data and an opportunity to build one-to-many relationships with publishers. Brands have a truly powerful opportunity to create and scale meaningful ad experiences with consumers, while protecting their privacy.”
Charlie Johnson, VP, International, Digital Element: “It is encouraging to see marketing budgets stay resilient. However, we need to be taking stock of the roadblocks ahead and pay close attention to shifting consumer behaviours to ensure strategies continue to drive business outcomes, despite the current uncertainty. The key to achieving this, of course, is data. While longer term forecasts have fallen, brands must continue to leverage accurate and reliable data to strengthen their strategies, ensuring they reach the right audience with the strongest messages, at a time when missed opportunities will have a significant impact.”
Tony, Ayaz, CEO, Scuba Analytics: “Quality, timely data is a marketer’s biggest competitive edge, even more so in light of forecasted reductions to ad spend. Inadequate data, or the inability to build insights through in-depth analysis, hinders a brand’s ability to effectively cater to consumers’ needs, and impedes the optimisation of advertising campaigns. Marketers should monitor and analyse consumers’ increasingly fragmented and complex journeys in real-time to develop Continuous Intelligence, allowing them to respond in-the-moment to audience behaviour and optimise campaigns. This data-driven approach also ensures marketers will be able to demonstrate the long-term success of their ROI.”
Anthony Lamy, VP EMEA Client Partnerships, VidMob: “We are repeatedly hearing from advertisers how investment in digital campaigns with multiple creative assets, whose performance is not measured and improved, is increasingly unacceptable. With pressure set to grow on ROI and efficiency, many advertisers will be challenged to outspend their competitors and must enhance the control of their advertising campaigns to drive performance through competitive advantage. This is the time for intelligent creative. Using real-time, data-driven insights, advertisers can fully optimise their campaigns by measuring performance indicators to remove the guesswork and correctly identify elements for improvement.”
Inactivity causes harm not good
Similar to budget cut concerns, paring back on marketing activity will hurt long term growth, at a time where consumer loyalty is paramount.
“Online channels offers greater flexibility in executing marketing campaigns”
Louis Connor, Business Development Director, Kepler EMEA: “With a recession more than likely, it is unsurprising that advertisers are re-evaluating their marketing investment. While offline channels have seen a marked reduction in investment it is interesting to note the growing, albeit reduced, investment in online channels. These channels offer advertisers greater flexibility in executing marketing campaigns without upfront fixed commitment and offer new means through which to reach consumers. As with previous economic downturns, it is an improvement for advertisers to consider the long-term impact to brand growth that a sustained period of marketing inactivity can cause.”
Matt White, VP EMEA, Quantcast: "We find ourselves in the midst of a perfect storm. After the rollercoaster of the last couple of years, I believe the industry will have the tools to navigate through this uncertain economic climate. The UK is experiencing a huge rise in the cost of living, but the buffer provided by the lack of spending in the previous two years could prove favourable for retailers and advertisers alike, especially savings on experiential items.
“September is a big time for our industry. New tech releases including the new iPhone, and new cars are released, pumping a huge amount of revenue into advertising. Industries such as travel are still seeing an enormous boost, riding the wave of pandemic cabin fever and I don’t see this fading. We’re cautiously optimistic about the next quarter, but it would be foolish to be unaware of how this turbulent economy can touch every industry.”
Harriet Durnford-Smith, Chief Marketing Officer at Adverity: “Inflation, cost of living and recession fears are rising fast. In a time of uncertainty, marketers need to be operating as efficiently as possible. By being able to make quick decisions and accurately forecast the impact of these economic shocks means that marketers can ensure they continue to deliver ROI.
“Additionally, we are still seeing industries bouncing back from the pandemic. With ongoing disruptions — such as Heathrow capping sales of flights during the summer — it has never been more critical for marketers to have access to accurate data in order to mitigate risk and optimise spend.”
Julie Lock, Senior Manager, UK&I Marketing: “With smaller ad budgets comes the opportunity for stronger, punchier ways of marketing, and so it is a case of identifying where businesses believe their biggest impact will be. Performance goals must be set to drive growth and prevent loss of traction and it is important to tap into a more specific area, as always, it’s quality, not quantity.
“It is vital that customer interactions are kept front of mind for business strategies as this is where authenticity comes in. Customer engagement is undoubtedly the backbone of a business but with a constantly changing world, it becomes increasingly difficult to garner their attention. It is important to focus on existing customers – ensuring these have a solid relationship before building new ones. Considering original ways of engaging with your customer or auditing current ones is key and elements such as blogging, calls to action and SEO all generate traffic. If the above is implemented well, then brands will thrive despite a reduction in their ad spend.”
Chris Hogg, Chief Revenue Officer at Lotame: “We are still treating a UK recession as a mere possibility; the discussion is still “how likely?” but the only relevant questions should be “how long?” and “how deep?”. We have seen softness in media for Q1 via signals from our global data marketplace, followed by some stability in Q2, and we’ll choose to read that as a positive sign. However, as consumers are hunkering down, demand is starting to weaken, and manufacturing indices are beginning to decline, so marketers will need to treat budgets with caution for the foreseeable future.
“On top of this, the industry is still grappling with ways to ensure audience addressability in the new age of privacy. It’s crucial that identity vendors and publishers collaborate to help marketers spend smarter, rather than squabbling over the effectiveness of their respective platforms. To truly deliver privacy-first data solutions for campaign and budget optimisation, industry players must work together; the future profitability of our industry depends on it.”
Elliott Millard, Head of Planning, Wavemaker UK: "We all know that the cost of living crisis is impacting consumer spending, so a decay in forecast marketing growth is unsurprising. Not only does the current climate, such as high inflation and high employment, not indicate a ‘normal’ recession, but so many other factors are at play in business and marketing.
“The complexity of this landscape means a singular approach will not be fit for purpose. We will need a framework to help understand firstly, how much risk a business is carrying. Second, the expansive role that marketing will need to play, for example, supporting supply chain agility and flexibility. And finally, the opportunities that may exist, such as how the demand pool is growing or shrinking and an assessment of the competitor landscape.
“For some organisations, the old rules of 2008 will hold true – keep budgets high, take advantage of any reduced costs, retain top-of-mind awareness, go long term and lead on brand. But for some, learning hard into short-termism will actually be the right thing. Let’s face it, if a business is at risk, then all the brand equity in the world is less interesting than sales. Understanding how we apply the early warning signs that the Bellwether report gives us and adapting our strategy accordingly to each business will be key to delivering profitable growth for clients."
Dominic Woolfe, UK CEO, Azerion: “The latest IPA Bellwether report is promising in terms of marketing budgets staying consistent, especially with increased investment in face-to-face events which is great to see. However, the industry is really starting to feel the effects of the cost of living crisis as advertisers will be under immense pressure to deliver to the demands of their brands in an overcrowded marketplace.
“We remain confident that advertisers can bounce back from this. Ultimately, those that continue to adapt to ever changing consumer behaviour by prioritising creativity and brand performance will achieve the most success in the coming months.”
Vihan Sharma, Executive Vice President Global Sales and MD of Europe, LiveRamp: “Despite the difficult economic climate, the resilience of online advertising budgets indicated by this quarter’s IPA Bellwether is encouraging. As the industry continues to embrace cookieless technology, it is likely that smart digital marketers will now be thinking about long term strategies which are underpinned by addressability. Indeed, the privacy-centric, first-party future is here, and already publishers and marketers are utilising new addressable solutions to achieve more accurate measurement and audience reach far beyond the capabilities of third-party cookies.
“Bolstered by closer collaboration, first-party addressability is promoting democratisation across the digital marketing ecosystem and, as media investment is diverted more toward the open web, a way of working with and beyond the walled gardens. Delivering true people-based marketing will not only restore the value exchange between brands and their audiences, it promises greater return-on-spend and the chance for publishers, platforms and advertisers to take back control of their revenues.”
See he(ar): sustained confidence in audio and video formats
Despite downturns in audio spend recorded in this quarter’s report, the industry remains confident in the fast-growing channel. Video also reigns as a marketing trump card, but performance metrics, rather than ‘views’ are the currency to serve.
“Digital audio is the fastest growing medium in digital advertising”
Russell Pedrick, Director of Digital, Wireless: “Whilst the latest IPA Bellwether report cites that video spend has increased, it has also revealed that audio spend has been somewhat reduced in Q2. That said, we know that digital audio is the fastest growing medium in digital advertising.
“This growth is a result of a seismic shift in consumer behaviour, accelerated even faster over the pandemic, with digital consumption increasing across multiple platforms. Podcasts have become the fastest growing advertising medium, enabling brands to reach young and affluent audiences listening on their own, therefore allowing integrated 1-2-1 interactions.
“To succeed in today’s complex media ecosystem, brands need to be present across all touchpoints to build familiarity, consideration and to drive action. In fact, research has shown that using online display alongside radio and newsbrands can have significant uplifts for brands when activated together. In the coming months, we expect that digital audio and video will continue to boom, especially with events such as the World Cup starting in the run up to Christmas. And with budgets potentially tightening, brands are likely to be placing more emphasis on quality and trusted environments for their ad placements.”
Emma Lacey, SVP EMEA, Zefr: “Video’s growth amid volatile market conditions reinforces it as a non-negotiable investment for brands in the marketing mix. The channel has become increasingly attractive with platforms like TikTok and Meta announcing new Inventory Filters and verification for video in Feed respectively; allowing brands to have more control on their content adjacency and advertise safely. Directing spend at these platforms can therefore be a powerful option for reaching target audiences while minimising waste inventory at a time when every penny counts.”
Hunain Khan, Director, Programmatic CTV Supply Lead, Xandr: “With consumer privacy top-of-mind for advertisers and media owners, the digital video landscape offers an appealing environment to operate in. Media owners often have consented, exclusive insight into what their audience is watching, when and how often. This data is essential for buyers and can be effectively wrapped and sold in a privacy-compliant way by the owners.
“Moving forward, buyers will be increasingly placing greater emphasis on supply path optimisation strategies, such as private marketplaces or curated marketplaces to put them in more control and provide more transparency. It will therefore be crucial to strengthen the relationship between buyers and sellers, where marketers can agree upon a strategy that works for them and their unique goals.”
Harry Williams, Senior Marketing Manager, A Million Ads: “It’s brilliant to see that total marketing budget growth has stayed resilient in Q2. While the latest report shows that audio investment has decreased, audio is still the fastest growing form of advertising and we remain confident that this channel will continue to grow over the next year.”
“With lots of innovations happening in the audio space right now, brands should be capitalising on this to build closer connections with target audiences. An effective way to do this is by utilising 3D immersive audio advertising. Designed to pan sound three-dimensionally around the listener, it can take them on a sensory journey. Combined with contextual data points such as the time of day, weather or location, brands can develop the personalised 3D audio experience further.
“To succeed in the months ahead, it is vital for brands to utilise these innovations in audio advertising to help create more effective ads. This allows brands to make their marketing budgets go further while connecting with their target audiences on a more personal level.”
Michal Macinik, Founder and CEO, AdTonos: “The results of this quarter are obviously no cause for celebration for the audio industry as a whole, but it’s worth bearing in mind that the reported decline encompasses radio (FM and DAB), music streaming, podcasts and other formats. A number of other reports signal that online and digital audio is growing faster than any other media - which could mean that marketers are turning away from legacy audio media. Despite the pressure on marketing budgets, the capacity to connect with your audience via the power of sound remains strong, especially with new and innovative formats: we see a continuous rise in smart speakers across the globe, the ease and efficiency of interactive ads, and the potential of in-game ads, which would tap into a very active and engaged community. Marketers should continue to see audio advertising as a great opportunity. And let us not forget that those who succeed now will be leagues ahead of their competitors when the market stabilises once more.”
Mateusz Jędrocha, Head of Upper Funnel Solutions Development, RTB House: “There is still a common misconception that the number of views a video gets can be regarded as a key metric of success. The reality is that success is determined by targeting consumers receiving the right content at the right time. And thankfully, the latest innovations in ad tech are allowing advertisers to do just this.
“Deep Learning, or advanced AI, is the most advanced set of AI algorithms and is capable of understanding human decisions with an unprecedented level of precision predicting future actions based on online behaviour.
“For video campaigns, Deep Learning can make a huge difference in gaining attention in an efficient way. Through real-time predictions, it is able to pick the right time, place, message and audience, which in turn enables advertisers to improve the customer journey and create the most effective video advertising strategy.”
Charlie Brookes, Director of Revenue, Octave Audio: “With marketing budgets reduced, advertisers need to ensure they are tailoring messages and targeting with more precision. This means first-party data strategies need to be strengthened to ensure the right audiences are being reached in the right environments.
“Additionally, advertisers can look at ways to engage audiences' attention. Interactive ads are a great way to do this, from encouraging users to perform an action such as shaking the device they are listening on, to getting the listener to respond to an ad to find out more information or even make a purchase. As the digital audio industry continues to evolve, marketing budgets need to work smarter, not harder to be effective.”
Our commentators were quick to offer their views on omnichannel effectiveness and the outlook for core spending areas in marketing.
“It's not enough to hope to ride out the wave – agility and adaptation is key”
Gavin Stirrat, CEO, Adimo: "Rising living costs will affect almost everyone and every business, and I believe that part of our recovery is acknowledging that situation and amending our business strategies in order to thrive.
"If we look at the media landscape before the unexpected downturn, particularly at traditional media, TV marketing budgets came to a standstill for the first time in a year. However, before the blanket slow down, budgets for online media grew by over 14% – an encouraging figure – and one that shows promise and direction as to where brands are, and should be, investing.
"Whether an organisation's business strategy during these tough times is to stand their ground and increase their budget, or to prioritise supporting customers, the fact of the matter is that they need to do something. It's not enough to hope to ride out the wave – at the moment, agility and adaptation is key. Only then can we begin to see promising growth figures again."
Zuzanna Gierlinska, Managing Director, Xaxis: “Whilst Q2 tells a story of reliance it belies what’s ahead of us for the remainder of this year. The write down of overall 2022 adspend growth forecast by Bellwether underlines the significant economic headwinds that the industry faces heading in H2. Marketers are already taking a cautionary approach with many saving their pennies for the necessary Q4 push. This is reflected in the budget write downs most notably impacting Audio & OOH.
“One trend we see emerging is the growth of omnichannel activation. Increasingly powered by AI and automation to deliver business outcomes. Omnichannel enables marketers to consolidate budgets whilst ensuring full funnel activation.”
Stephen Upstone, Founder and CEO, LoopMe: “In the current economic climate, marketers must be able to tie their ads to specific KPIs to make the most of their budget, while drawing on insights from granular measurement to track how campaigns perform in real-time. Our own research recently revealed that 50% of UK consumers are consciously cutting back on spend due to rising prices, so it’s never been more important for brands to procure the level of insight required to pivot ad budgets quickly to the areas that produce the greatest ROI. Marketing efforts should also focus on the most profitable channels – take, for instance, the rising popularity of in-app advertising – to attract eyeballs, increase campaign efficacy, and gain market share from competitors.”
Justin Taylor, UK MD, Teads: “With the mounting challenges like the war in Ukraine, the energy crisis and continued disruption to supply chains, it was somewhat inevitable that the latest IPA Bellwether would scale back its forecasts in Q2. The net expansion of marketing budgets despite these problems is a testament to the industry’s resilient sense of optimism post-pandemic. Nevertheless, maintaining upward momentum in the face of reduced ad spend will require a balance of proven partners alongside new ways of approaching scale and effectiveness.
“As consumers tighten their belts in the face of these economic issues, as well as recent political developments, media as a source of news, advice and community will be relied on heavily. Advertisers who continue their support of ad-funded media sites, in high-attention environments with impactful creative will continue to see meaningful business results through this period of turbulence.”
Andrew Turner, Chief Revenue Officer, Incubeta: “After the confident forecasts of Q1, a reassessment of growth was unavoidable given the current economic and political situation. Nevertheless, with digital budgets remaining relatively buoyant even in the face of these big challenges, it is clear that online will remain a key part of the marketing toolkit for 2022.
“Businesses need to optimise their omnichannel experiences, and ensure that these marketing budgets, which remain resilient for the time being, are carefully divided across the right channels.”
Emma Cranston, Client Services Director, The Ozone Project: “The past quarter has seen numerous pressures bear down on marketing investment; from the ongoing conflict in Ukraine to rising inflation, soaring energy bills and their combined impact on the overall cost of living. With advertising budgets coming under more pressure than ever, our customers are telling us that quality, result-driven and easy to deploy media is more critical than ever. And while this latest report indicates a steep slowdown in digital spending, at Ozone we have actually seen the opposite – continued, strong growth from advertisers looking to invest in premium, highly engaging environments.
“This is largely down to the essential role that premium content plays in helping consumers navigate the challenges presented by issues that are largely outside of their control. As we saw during the pandemic, the public seeks out advice and information from expert voices and we consistently see that in our own data. With the near-term outlook increasingly uncertain, brands will be looking to premium publishers to reassure their customers in the short-term, while also building brand equity for the mid to long-term.”
Lloyd Davies, Managing Director, Making Science UK: “Cuts in forecasts have reinforced the need for marketing efficiency, however our latest research found that nearly two thirds of UK brands are under utilising their data. By focusing on high-level, general activations instead of more sophisticated techniques such as prediction and audience insights, marketers are failing to reap the rewards of their initial investments. With less than half able to increase their ROI as a result of data activation, marketers should review their data activation strategies to incorporate advanced analytics tools such as Google’s BigQuery. This will allow for more in depth analysis and activation, giving them the opportunity to really benefit from the data they own and maximise available budget.”
Ben Putley, CEO and Co-Founder, Alkimi Exchange: ‘’Despite the modest growth in budgets, the increasing economic uncertainty in the UK will likely cause marketers to be more cautious with their spend – and rightly so. With brands needing to maintain a good level of consumer awareness, marketers are going to have to maximise the potential of their budgets. For advertisers and publishers looking to find extra breathing room, decentralised ad exchanges can provide an answer. Not only do the reduced fees on these emerging exchanges free up more spend, but the transparency enabled by the use of blockchain technology allows supply paths to be better optimised to ensure spend isn’t wasted.’’
Paul Wright, Managing Director, UK, France, MENA, Turkey at AppsFlyer: “As with any multi-channel approach marketers should ensure that the consumer experiences a seamless and personalised journey across all touch points. With face-to-face activities on the rise, especially in the entertainment and travel sector, marketers should focus on adding value to in-person experiences through complementary online channels such as mobile. Our data shows an increase in app installs over the last 18 months period in both sectors with consumers appreciating the convenience of features such as real-time notifications, maps, and QR codes.
“To incentivise consumer purchases despite the economic downturn, marketers should focus on providing a high quality, personalised user experience, and focus on boosting loyalty with existing customers to encourage regular, repeat purchases.”
Tom Buttle, Managing Director, London, MikeWorldWide: "The IPA Bellwether report delivers a couple of revealing trends. Firstly, it shows that the desire for people to connect isn't just 'post-lockdown' chit chat; it's an actionable, marketable sentiment and event spend is up because of this. But secondly, PR is the only other Bellwether category to show growth. This is because PR is an interpersonal, storytelling discipline – and in the current socio-economic climate the value of this to brands is significant.
“We're in an era where caring has become a powerful form of currency, so you have to be objective and authentic to get your story over the line. This makes PR an effective way for businesses to show up, and to create advocates from their audiences. So at the same time that digital is helping us all market smarter and faster, PR's intangible human quality has become worth investing in."