“Media efficiency will be a greater topic of conversation”: 50 marketers’ IPA reactions on first-party forward, optimising and the move to ‘brandformance’

With reported optimism for marketing spend playing out against downbeat views of prospects across UK industry, we ask our panel of marketing experts for their insights behind IPA’s latest figures.

We were waking up to news yesterday that despite the doom that has peppered the industry, marketing budgets closed 2022 with small, but convincing growth. The latest IPA Bellwether report for Q4 2022 revealed, among other things, a minute reduction in adspend forecast for 2023, but real opportunities for those that embrace digital, tech forward and data-driven strategies.

Warnings and notes of caution exist of course. Upcoming challenges at the top of marketers’ lists include ‘proving’ return, exciting consumers who may be reluctant to spend and getting ready for, if not ahead of, the game in a privacy-first, customer-centric and audience-engaging world. But experts agree that these won’t be stumbling blocks if the industry doesn’t stick its head in the sand.

PMW’s round-up of thoughts, insights and advice from our expert panel on the back of the IPA’s latest numbers reveals the media, and the measurement, to invest in now and why you should track and trace to make the most of your spend amid a period of ‘cautious optimism’.

“Hopefully we’ll see ‘brandformance’ grow in 2023”

Allan Blair, Head of Strategy EMEA, VaynerMedia: “Given the doom and gloom of Q4 2022 and fears of a looming recession, spending levels look positive, suggesting brands are being cautious but quietly optimistic about the long term.

“It’s great to see organisations finally understanding the value of robust marketing investment as well as mixing both brand and performance marketing. A smart balance of the two can help to insulate you and/or supercharge your performance in an unpredictable economy. That is what businesses are looking for and we wholeheartedly believe it’s achievable.

“A consumer-centric, social-first approach to advertising can give brands an advantage. It allows them to deeply understand what consumers want and respond to it in real time. You can then continue to learn and optimise the content, or as we call it, ‘find right’ and make more powerful, cost-effective work. Hopefully, we see a growth in ‘brandformance’ as a concept in 2023, as people start to learn the importance of merging the two.”

Rik Moore, Managing Partner of Strategy, The Kite Factory: “The Bellwether report highlights savvy marketers looking for opportunities to navigate the recession’s impact by identifying changing consumer behaviour in the face of the cost of living crisis that can create new opportunities. This is a good prompt to any brands who have yet to embark on researching new areas and occasions, that you would be wise to do so with haste.

“It is also good to see sustainability still in the mix – people haven’t been knocked off stride by the economic situation. Indeed, sustainability is seen as an opportunity, which is really positive.”

Daniel Pirchio, Founder and CEO, OneTag: “The Bellwether report signals that digital marketing is an effective countermeasure to the impacts of the recession on brand visibility. However, the digital marketing ecosystem is fragmented and often filled with disparate data points, with many technologies still missing sophisticated reasoning.

“At a time when efficiency and reduced wastage is a top priority for marketers, it’s important they focus on building strategic partnerships throughout the programmatic ecosystem. The ability to filter bad placements automatically and in real-time based on campaign performance metrics is one key way advertisers can both drive efficiencies and maximise their ad investments.”

Sophie Wooller, Director of Digital Transformation, Croud: "Whilst it’s promising that budgets are expanding, that doesn’t mean they’re free from scrutiny. We've been down this road (many times) before - during the pandemic and previous recessions - we know the goalposts will keep moving. As a result, we're seeing the biggest growth where teams can prove they are driving business results and they've already squeezed every efficiency from their existing platforms. Against a challenging economic outlook, a clear articulation of marketing's success will help to keep the board onside and unlock budget."

Maor Sadra, CEO, INCRMNTAL: "While it's positive that one fifth of brands were able to increase marketing spend in Q4, the reality for many marketers, and particularly smaller brands, is that boosting budgets now isn't feasible. The industry narrative that businesses must continue to increase marketing investment if they want to remain competitive is unhelpful, and irresponsible, especially after so many brands found that more than half of their trackable ad spend was redundant.

"For these companies, the challenge is knowing which marketing activity to cut and which to keep. The problem is many marketers aren't utilising tools to effectively evaluate the true impact of their spend across all channels to see which campaigns are performing and which are not. By using the correct platforms that offer on and offline measurement, struggling brands can successfully reduce spend without impacting revenue, which is critical at a time when many businesses need to make cutbacks."

Karl Weaver, SVP Strategic Advisory, EMEA, MediaLink: “The optimistic note in this Bellwether Report seems at odds with the economic headwinds. This is for two reasons. Firstly, the economic outlook is not as gloomy as had been reported. The challenge of declining incomes will persist through 2023, yet there are earlier-than-expected improvements in economic indicators in the UK and other markets.

“Secondly, in this downturn, businesses can take advantage of the analytical muscles they have developed over the past few years. The differentiator during this downturn is our ability to disregard an emotional response and act boldly, thanks to the investments made in tools and metrics. The evolution of data and how we use it has translated to a much deeper understanding of how marketing drives sustainable growth and of what to spend, where, and when.

“Something to bear in mind is how these results will adjust throughout the year. Emotions still have the power to dictate decision-making and investments, so will we see these numbers turn the other way, and will fear ultimately get the better of us?"

“A definite sense of ‘cautious optimism’”

Jacque Chadwick, Commercial Trading Director, Ozone: “Given the double impact of the ‘Golden Quarter’ and the FIFA World Cup in the last three months of 2022, perhaps a growth in overall marketing budgets was to be expected? In the context of it being the seventh consecutive period of total marketing growth, there are definitely reasons to be optimistic. With recession, inflation, cost of living and the conflict in Ukraine never far from the headlines, it’s quite easy to focus on the negatives.

“Looking forward, we feel a definite sense of ‘cautious optimism’ – the phrase that summed up coming out of the pandemic – feels even more appropriate now. We see brands retaining their focus on not losing ground to competitors, particularly after the past few years of turmoil. At times of budgetary scrutiny, we see greater marketer emphasis placed on delivering real business results, and increasingly that is through a lens of doing it better – be it from diversity of audience reach through to easier to activate campaigns – and doing it more sustainably.”

Sam Benkel, Managing Director, Retail Media Northern Europe, Criteo: “While it may seem surprising to see budgets have risen, many media agencies report ‘growth’ and ‘innovation’ are still chief among the goals that brands are setting for the year ahead, featuring far more prominently than ‘survival’ and weathering the storm.

“It’s likely we’ll see media efficiency become a far greater topic of conversation over the coming months, and diversifying spend across ad-supported streaming, retail media, audio, and even the metaverse will be key. While media costs are expected to rise, new digital channels such as retail media boast deeper audience targeting through the retailer’s relationship with their customer, better user experience and outcome-based reporting. To support any businesses growth aspirations this year, marketers need to be where consumers spend their time online and closer to the point of sale. It’s also important to bear in mind this kind of investment creates a high value, additional revenue stream for retailers which supports their growth aspirations in turn.”

Camille Flores-Kilfoyle, Head of Marketing EMEA, Reputation: “The current financial pressures felt by all businesses due to the recession have added to the already existing, post-COVID marketing pressures. This, coupled with a decline in consumer confidence, means that from a customer experience point of view, it is vital that marketers not only ensure they are spending budgets wisely, but also understand their consumers’ priorities and changing needs.

“Optimisation is key. Businesses should tighten up best practices, ensure the right target consumer is at the core of all marketing campaigns, and optimise the efficiency of the campaign process.”

Harriet Durnford-Smith, CMO, Adverity: “With recession forecasts almost changing by the day, a confusing financial picture isn’t surprising. Optimistically, we could take continued budget growth — and expectations of further rises this year — as proof that marketers are determined to keep investing. But with IPA authors predicting ad spend declines, it’s likely many teams are still on track for cuts.

“As they aim to deliver more for less, avoiding panic strategies is going to be crucial. Under pressure, it’s easy to go one of two ways: using the scattergun model of spreading spend as thinly as possible, or simply pouring money into channels that have worked before. To avoid the poor results both of these approaches deliver, marketers must be bold. Using real-time performance data to guide investments will help them make brave yet informed choices; with accurate insights uncovering new opportunities to harness more effective mediums, while ensuring they don’t waste budgets on uninspiring, vanilla campaigns.”

Tom Laranjo, CEO, Total Media: “It’s worth understanding the socio-economic factors to unravel the IPA’s latest results. It can be assumed that train strikes, bad weather, and the increasing rate of inflation during Q4 2023 potentially had a huge impact on consumer trends and their purchase intent - which certainly looks to have knocked OOH advertising. No doubt, inflation hit the cost of ads, which drove budgets up as brands needed to compete due to Christmas and the unprecedented World Cup, which surprisingly delivered a truly unforgettable tournament, for all the right (and wrong) reasons.

“There is room for positivity, as the economic outlook is notoriously difficult to predict, and the UK may well outperform gloomier forecasts. Equally, even in recessionary times, our industry has shown enormous creativity, flexibility and resilience, and will no doubt rise to the challenge again. But the first step is to be clear-eyed and realistic about the challenges we need to overcome. Habits are changing across multiple channels, so brands and agencies alike, need to be acutely aware of where to drive the best ROI.”

Josh Partridge, Head of EMEA, Yahoo: “Operating in a recession makes for a tricky business model but it’s important to not cut out marketing budgets. The IPA Bellwether Q4 2022 report has found this to be true, that despite the recession and high inflation levels, advertising spend has increased – signalling brands’ need to maintain awareness and drive growth.

“However, we are likely to see businesses focusing on working smarter, not harder. Increased budgets are a good first step but the industry needs to become more flexible with disbursing what is available and working with their partners to adjust in real time to get the most return on investment. One factor that marketers need to consider is the changing way audiences interact with advertising, in particular digital out-of-home advertising. Factors such as new working patterns, rail strikes or extreme weather (as seen recently) will all have an impact. Campaigns need to be adjusted accordingly to minimise ad spend wastage whilst maximising audience traffic - leading to a more efficient marketing budget overall.”

Matt Nash, UK Managing Director, Scibids: “It’s clear from the resilient growth of marketing budgets that brands have regained confidence in the strategic value of increasing their ad spend during times of economic uncertainty. Alongside this, there will be increased scrutiny from brands to ensure budgets are delivering on the outcomes that matter to them, especially in digital channels, so they need to look for partners who can help maximise performance and efficiency.

“We can expect digital marketers to pay close attention to the ad stack, leveraging solutions which analyse media and sales performance, and optimise media plans toward business-specific objectives. This includes the reduction of ad waste.

“Incorporating sustainable practices is high on the agenda for marketers and brands should choose partners whose technology can help make first-party and measurement data actionable in the buying process and allocate ad spend in real time, selecting fewer but higher quality ad impressions. This will go a long way in reducing the carbon footprint of these campaigns while maintaining performance.”

“No one can rely on old assumptions at this time”

Alison Harding, VP Data Solutions, EMEA, Lotame: “It looks like the UK has just about avoided recession – for now. But the economy is still walking a knife edge, which means consumers are going to be more discriminating in their purchase decisions. This provides an opportunity for marketers to learn more about consumers as they shop around, compare products, and rethink their brand loyalties.

“No one can rely on old assumptions at this time. Marketers must be active in understanding consumer behaviours and preferences through first-party data collection and high-quality data enrichment as they will not be able to market effectively without up-to-date audience insights. The alternative is to fall back on wasteful ‘spray and pray’ methods or live at the mercy of the walled gardens, neither of which are sustainable approaches in the long term.”

Andrew Stephenson, Director of Marketing EMEA and India, Treasure Data: “Coming out of a steadier than expected golden quarter in retail, today’s IPA Bellwether demonstrates that brands are using that swell of revenue to shore up marketing budgets in the face of more challenging months to come – welcome news for marketers. This steady budget growth, in part enabled by the rare combination of the winter World Cup and festive period, is a strong sign that companies’ are looking to marketing departments to help retain market share in 2023. With recession taking hold, brands will be leaning on teams to help win consumer trust and loyalty, and prevent customers turning to more cost-saving products.

“As we look ahead to core consumer milestones like Valentine’s Day and Easter, first-party data – and knowing how to get the most out of it – will prove key to marketers’ ability to accurately and sensitively land key messages, as well as delivering a quality customer experience and continue to prove the value of marketing to business growth. As the next quarter likely provides marketers with another sink or swim moment, it’s vital brands ensure that they have a reliable first-party data strategy, not only to make efficient use of their budget now but to make strategic marketing decisions to insulate themselves against whatever is to come next.”

Gustav Westman, CEO and Founder, BrightBid: “For brands advertising online through paid search, cost per click inflation is a serious factor across the board, as more companies move spends to digital channels but there is not the commensurate increase in Google searchers. It is important that businesses find ways of managing this inflation and the new AI-powered technologies and solutions continue to prove themselves as one of the most effective add-ons to any advertising campaign.

“The need for accurate data analysis, audience targeting and keyword optimisation for Search cannot be overemphasised if the goal is to achieve greater ROI or more new customers. The only way for brands to stand out will be adoption of effective methods and solutions that can get them ahead - not just throwing more money at the campaign, which seems to be the case following the report.

“With AI platforms like ChatGPT and its forecast use by Bing, coming into the mix as the year unfolds, it remains crucial for brands to invest in technology that can supercharge marketing campaigns and achieve desired results.”

Clare Dove, UK Group Commercial Director, Future: “Marketers must find key high intent audiences to drive ROI this economic winter. Brands that spot trends and strategically tap ready-to-spend groups will be able to grow when others are in the weeds. For example, we’ve supplied brands who are hesitant to continue spending on social media platforms right now, due to a lack of trust, with the first-party data they need to find consumers' interests and passions and target them effectively. Continued data innovation will ensure marketers remain confident they will reach relevant audiences at scale and optimise the journey to purchase for faster conversion.”

Susan McKay, CMO International, Dun and Bradstreet: "Data-driven marketing has enabled marketers to prove return on investment and make the case for increased spend. Our research supports this sentiment as 79% of business leaders surveyed said they are boosting investment in data quality for this purpose.

“However, data quality is still a concern for many companies, with only 28% fully confident in their ability to target audiences. To overcome this, businesses must prioritise a first-party data strategy and focus on data accuracy and quality to help them make informed decisions. With the impending ban on third-party cookies, companies must also rely on first-party data to understand customer buying behaviour and improve personalisation. This will enable them to implement effective account-based marketing strategies and drive growth in the coming year."

Ben Leet, CEO, Delineate: “This robust outlook for UK marketers should be taken with a pinch of salt. Financial prospects remain bleak at both the industry and company levels, though they are improving. Marketers need to utilise their consumer data to enhance their ability to react and make smart decisions. Brands that can effectively track their audiences' wants and needs will be better positioned to maintain a competitive advantage and avoid long-term reputational damage.”

“CTV will become a must have for marketers”

Tony Marlow, CMO, LG Ad Solutions: “Marketers want the sight, sound and motion of the biggest screen in the home coupled with the addressability and targetability of digital media – that is exactly what ad-supported CTV delivers. This rapidly growing channel is giving marketers the scalability of a first-screen advertising experience, but with granular targeting capabilities.

“Shifting trends in television viewership, coupled with fears of potential economic headwinds, mean viewers are increasingly becoming very price sensitive for their TV content and are now embracing free ad-supported streaming television. Not only is this great news for consumers who get the content they want for free, but it is positive for marketers seeking to make meaningful connections with their respective audiences. One thing that makes this overall trend so powerful is that advertisers no longer need to choose between being a performance marketer or a brand marketer: ad-supported CTV allows them to be performance storytellers within this new and expanding connected arena.”

Matt White, VP EMEA, Quantcast: “With pandemic restrictions here completely removed, people have been close to desperate to get away following two years without being able to enjoy the sun. Businesses in the sector have therefore continued to invest heavily in adspend to ensure they’re enjoying a sizable slice of the pie. They have also built up a level of robustness following 2.5 years of perma-crisis and few companies will now be going into this year assuming there won’t be obstacles to overcome.

“It’s difficult to say with any certainty what the future will hold, especially in the current economic landscape, but as the recession takes hold, it’s likely ad budgets will be impacted. One area that will continue to grow throughout the UK is CTV. This year will see increased monetisation of inventory and ad space as CTV leaders such as Netflix and Disney+ continue to expand and new players enter the market. This will increase the availability of direct-to-consumer advertising, which in turn opens up a whole new marketplace which advertisers can engage with while there’s a low barrier to entry. With younger generations tuning out of linear TV in droves, CTV will become a must have for marketers. Those who play the waiting game will miss the opportunity to connect with audiences before their competitors do.”

Oscar Wall, General Manager - EMEA, Recurly: “Streaming services that offer ad-tiered plans need to be mindful that while ad spend is up, the price points they offer need to be realistic and make it viable for brands to buy ad space and see value on their investment, while making the platforms accessible to cost-cutting consumers. And, as streaming services are often a subscription business, these businesses want to watch their recurring revenue stream. If there is a decline in subscribers, then brands are less likely to invest in the platform - whether it be streaming media, publishing, or on platforms offering goods and services.

“Looking ahead, streaming services need to offer different price plans to accommodate cost-conscious consumers. Brands and retailers offering subscription services can justify pricing by offering exclusive content and personalised experiences, enabling consumers to customise both their price and their experience. Lower price plans should also reflect a plan with options that will still be appealing to consumers - including free-to-view ad-tiered content, as long as it’s affordable for brands to advertise on.”

Csaba Szabo, Managing Director, EMEA, IAS: “Advertising gives the opportunity for brands to weather an economic downturn, by investing in engaged audiences and driving greater revenue for their product or services. As a result, tough economic times call for advertisers to be more focussed and many will be looking to double down on channels that reliably deliver the best ROI.

“With this in mind, it is no surprise to see the upswing in video investment. Video and social platforms are battling to increase stickiness with advertisers – including a raft of classification features and lower cost ad options. At the same time, the number of users on CTV and streaming platforms increases its audience targeting ability and appeal as a place to direct budget.”

“2023’s winners will be those that shore up their position while upholding privacy”

Aviran Edery, SVP and GM, Marketplace, Verve Group: “With main media spend bouncing back, it’s important to focus on the growth drivers that will attract marketing investment in the coming year.

“The marketing industry must innovate its approach to data and prepare for a privacy-centric future without cookies or identifiers, so that marketers can continue to access the quality data they need for accurate audience targeting and measuring marketing outcomes. The winners of 2023 will be the marketers that reach high value audience segments, demonstrate the impact of their budgets, and shore up their position in the market while upholding consumer privacy.”

Ben Cicchetti, VP, Corporate Marketing, InfoSum: “In an increasingly competitive market in which ad budgets are squeezed, marketing teams are under increased pressure to drive results and demonstrate value. Brands with clear data collaboration strategies and strong direct media partnerships will have more opportunities to reach unique audiences and tap into growing formats – such as video. The result will be better return on ad spend.

“It’s also essential to avoid costly missteps. Consumer awareness of privacy issues is higher than ever before, so marketers must be certain that valuable data assets are protected or risk both regulatory and reputational repercussions. The technology platforms they use must put privacy at the centre of everything, while allowing them to maximise opportunities.”

Charlie Johnson, VP International, Digital Element: “Online marketing is a crucial aspect of driving growth amidst negative trends – however, the latest ruling against Meta Ireland’s data processing operations signals a persevering need for privacy-compliant targeting solutions, regardless of whether Google’s cookie deadline ever arrives. Businesses are increasingly turning towards data-driven analytics to meet these conflicting demands, optimise performance, and drive growth. This is a smart strategy as long as you invest in the right tools, for if the issues around individual user privacy are not addressed efficiently now, companies will lose out in the future, both in terms of consumer trust as well as business opportunities.”

Ned Jones, Head of Advertiser Customer Success, Permutive: “Marketers will need to seriously consider how and where to buy media to get the most out of any conservative budgets. Current reach on the open web is hindered as a vast majority of programmatic spend focuses on just 30% of consumers, due to users browsing in cookie-blocked or ad-blocked environments, and opt out of sharing data for advertising.

“To maximise adspend responsibly, marketers must build relationships with publishers who can reach 100% of their users and provide advertisers with audiences built from rich, consented first-party data. This way marketers will achieve their goals without compromising their consumer’s privacy.”

“Focus on topline growth means forgetting marketing’s impact on price sensitivity”

Elliott Millard, Head of Planning, Wavemaker UK: "There is an apparent tension in the Bellwether data – respondents are simultaneously pessimistic about the financial situation of the UK and their own businesses whilst optimistic about their ability to invest in marketing. In a market where the cost of living is biting, and many media channels are inflationary (this is as much about social media as it is about TV), that feels like a disconnect. However, digging into the areas of forecast investment allows us to reconcile this tension.

“The industry is so often focused on topline growth that we forget the power of marketing to impact price sensitivity. When consumer spending is squeezed, at the same time as supply chain constraints and increasing cost of production, it is arguably more important to defend price premium for profit.

“This is reflected in the mediums that are seeing the most growth. Events, for example, help drive trials and maintain a premium proposition. Broadcast media, especially video, can create a shared belief in a brand’s power, making downtrading or private label alternatives less appealing. In this way, that apparent tension is actually a pragmatic and strategic approach to maintaining overall profitability in tough times."

Sue Azari, E-Commerce Industry Lead, EMEA and LATAM, AppsFlyer: “The upwards revision to online marketing budgets reflects current business objectives: deliver value, maximise revenue, and sustain market share. Despite the challenging economy, marketers must not lose out to competitors and are therefore investing in the channels that reinforce their connections with audiences and support laser-focused targeting, such as mobile and in-app marketing.

“Amid a deceleration in online marketing’s growth, we’ll see more marketers shift their focus to quick conversions and engaging audience segments with a high lifetime value as, in the months ahead, making every penny count will be paramount.”

Anna Forbes, UK Country Manager, Azerion: “It’s a story as old as time. In a period of economic decline, advertisers must stay firm and continue investing in their marketing strategies. In advertising, value may have previously meant choosing a cheaper alternative. However, in the current economic landscape it’s about going above and beyond the transactional media investment.

“Therefore, advertisers must think about value not in terms of financial savings, but in terms of delivering the best possible advertising to consumers, with minimal wastage. To maximise marketing budgets in 2023, the industry must harness innovative approaches to audience targeting, including eye-catching creative which is all independently verified and measured.”

Matt Andrew, UK MD and Partner, Ekimetrics: “In the face of pessimistic expectations for the economic outlook, it’s refreshing to see so many marketers planning to increase spend. While some of this may be driven by rising costs rather than more marketing, it’s essential that marketers are equipped to optimise their spend and impact. Consumers will need strong reasons to part with money on discretionary spending and brands will need to go further to stand out.

“Making the organisational transition from attribution to unified, triangulated media mix optimisation can help businesses make confident decisions at every level, from strategic budget direction to creative briefs and campaign optimisations. With media inflation and weakening adspend, it’s important to ensure tighter targeting does not jeopardise long-term activity or seeking new audiences, as this ultimately results in decreasing efficiency and saturated markets. Continuing to innovate, such as through new approaches to customer centricity or creative optimisation, could provide significant gains and help sustain commercial success.”

Chris Whitson, Global Head of Strategy, Iris: “The latest Bellwether Report shows real conviction in the power of marketing to support brands in bad times and in the many decades of intelligence that shows what long term damage can be done to brands who choose not to invest in a downturn.

“Of course, extreme scrutiny should be given to every penny spent and the impact it can have on both the brand and the business. At times like this it is beholden on agency partners to be able to flex and shapeshift quickly to offer clients the right advice and output for their most immediate challenges, whilst keeping an eye on future opportunity.

“As we face the year ahead the brands that thrive will be the ones who optimise every element of the marketing mix to make sure no penny is wasted whilst also offering real empathy and practical solutions for a bewildered and battered customer base.”

“Digital marketing spend will rise in a climate of demand for fully accountable media”

Luke Fenney, VP Addressability, Europe, LiveRamp: “It’s clear that many brands have learnt the lesson of the past few years that investing in marketing is essential for navigating a crisis. The challenge now is to ensure that these media plans are running as efficiently as possible.

“Even in this era of decreasing cookies and mobile identifiers, for which our own research indicates 73% of UK marketers don’t feel prepared, we expect digital marketing spend to continue to rise in a climate of increased demand for fully accountable media. Privacy-first people-based marketing solutions, data clean rooms and the expected growth of connected commerce media options, give brands more scope to marry their ad spend with addressable targeting, accountable and measurable results.

“Brands that leverage ‘people-based’ activation and measurement solutions, which utilise privacy-compliant, first-party data to provide insight across all omnichannel marketing activities, will be those who can stay connected to their high value audiences and will see their market share increase.”

Justine O’Neill, Senior Director, Analytic Partners: “We’ve seen how important continued ad spend is during an economic crisis and that brands that continue investment will come out stronger on the other side.

“The trend towards online media is still unbroken which makes sense in the aftermath of the pandemic and changed consumer behaviour – although its sales impact growth has slowed down, according to our own research. Except for video advertising, ‘other online advertising’ was the only category to record greater marketing expenditure in Q4. This includes emerging media trends such as retail media – there is a lot of potential that is still untapped with currently high ROIs.

“There will be more opportunities for online retail in general. But beware, not all media trends will work for everyone. Brand should always take a ‘test and learn’ approach whenever looking to implement change, particularly during times of uncertainty.”

James Coulson, Managing Partner, Consultancy, Kepler EMEA: “There seems to be two opposing forces at play. On one side, consumers and advertisers are keen to put COVID-19 behind them, tap into the increased savings households put aside during the lockdowns, and get back out there. Events being the top performing Q4 category is testament to this. The opposite force, and to be honest, stronger of the two, is the recession, low consumer confidence, global geopolitical instability, and inflationary pressures quickly eating away at those savings. Advertisers will be responding in kind, with an expected increase in sales promotions to keep the money flowing in 2023.

“The recessionary thump is looking to be mercifully short, and advertisers need to be ready for the sunlit uplands of 2024, using this year to be ready to capitalise on the opportunities. The winners over the next few years will be the brands who have adopted an agile mindset, are able to react quickly and move their program to coincide with external pressures. With measurement and first-party data technology likely to be the current priority areas of focus, it’s likely that we will see continued investment in the talent, technology and vendors that can facilitate this.”

“The cost of living crisis is real and urgent but it will pass”

Richard Exon, Founder, Joint: “The latest Bellwether Report points unflinchingly at the dilemma marketers face in 2023. The cost of living crisis is real and urgent, crushing consumer confidence. But like all things it will pass. Inflation will slow, interest rates will stabilise and those brands that hold their nerve and invest with conviction throughout the first half of the year will reap rewards.

“Every brand has the opportunity to represent certainty in an uncertain world by being present and being relevant. Surprise and delight with inspiring, bold ideas that consumers simply can’t ignore. Whilst others dither, smart businesses will grab market share and energise their existing user base, investing consistently to create emotional advantage over their competitors.”

Patrick Mazzotta, Managing Director, What’s Possible Group: “Responsible agencies will self-identify by being able to bring effective opportunities to the 39.5% of clients looking to increase marketing spending while simultaneously digging those moats for the 15.3% of clients looking to reduce budgets.

“The cost of living crises will very likely be a recurring theme throughout the year. We can expect this will have a varying effect across the population, and I expect to see companies who are more experienced in targeting segments within their customer base will weather this year best. With a slight downward revision on market research spending, there’s an interesting opportunity for those who hold out on intelligence spending and direct that energy into boosting effectiveness across the board. The law of averages applies here, and those who buck the trend are likely best positioned to see and seize opportunities to outperform competitors.”

Andy Ashley, Global Marketing Director, SmartFrame Technologies: “There are two major threats to businesses at the moment: a technical recession and increasingly strict privacy legislation. But even amidst these pressures, the outlook for the future is largely positive, highlighting brands’ understanding that communication is crucial, especially in times of uncertainty.

“However, it’s clear any new solution must be part of a larger strategy to improve transparency throughout the industry – it is not enough to simply engage consumers. With more oversight of ad placement and environment as well as privacy-safe interactions, businesses will be able to continue optimising their strategies and stay agile in challenging times.”

Neil Cunningham, Co-Owner and CEO, Cream: “When the Bellwether report mirrors the majority of client conversations we’re having there is quantitative evidence to be optimistic. Digging a little deeper, we can see that the optimism stems from an increasingly high level of confidence in decision making for 2023 which has been building over a number of years.

“Marketers and business decision makers are now all too familiar with ‘abnormal’ or ‘challenging’ market conditions. The fear that might have once accompanied a recession has been dulled by experiences since 2008 and this allows for clear-eyed decisions to be made in the face of market ‘noise’.

“A lot of smart research and audience insight work was carried out during 2020 and 2021 whilst the advertising world paused and then got back on its feet. We’ve also seen research costs and timings become more manageable via partners. Marketing departments have therefore never felt more confident in their brand and audience targeting decisions which takes even more perceived risk out of investment planning. Perhaps most importantly, the rise of more grown up and holistic marketing measurement through marketing mix modelling has put most advertisers in a position where budget deployment feels rational and evidence-based rather than intuitive and habitual.”

“Leaving the tech to crunch through data points lets marketers do what they do best”

Phil Duffield, VP UK, The Trade Desk: “Economic uncertainty is forcing consumers and advertisers to spend more strategically in 2023. So at a time when marketers need to plan their spending carefully to ensure maximum impact, it is crucial they remain disciplined with their spend – and the only way to do that is to be data-driven. Data will be critical for any savvy marketer trying to prove the continued ROI of marketing to their CEO and CFO. That means tapping into an omnichannel strategy and unleashing the potential of channels such as CTV, audio and retail media, while measuring the impact of every pound.

“With today’s report adding to speculation that recession is on the horizon, marketers should remember that those who maintain connections with consumers during a downturn reap the long-term benefits. Leaving the tech to crunch through millions of data points allows marketers to do what they do best – creating meaningful messages that build and retain customer loyalty.”

Paul Coggins, CEO and Co-Founder Adludio: “If budgets are to be spent effectively, they need to be directed at maximising the attention that ad campaigns receive. This is particularly important on digital channels, where the battle of the brands for user attention is raging, and where smart brands are leveraging available technologies to gain a strategic edge. Indeed, the Bellwether report highlighted this in the noted interest amongst advertisers in integrating data-driven analytics.

“Technological advancements, in artificial intelligence and computing horsepower especially, present massive advantages for marketers looking to optimise their ads for user attention. Brands that direct their budgets at these techniques, maximising the attention their ads receive now, will be those that will stand out once the economic outlook becomes more optimistic.

“Digital video stands out because of the vast span of inventory and audiences”

Harry Harcus, EMEA CEO, Xaxis: “Digital video stands out because of the vast span of inventory and audiences, from established publisher sites to fast-growing video hosting entertainment platforms such as TikTok, Twitch and the now mature YouTube. Campaigns that bring together these channels are well-positioned to perform because of their combined reach and effectiveness that is greater than the sum of their parts. I’ve seen recent findings from On Device Research that reinforce the appeal of video, with top performing digital campaigns skewing towards the channel, and especially for the goal of driving brand consideration. It’s no surprise that marketers are looking to invest more in 2023.”

Emma Lacey, SVP EMEA, Zefr: “Used alongside the open web, brands can tap into video on walled gardens to stay front of mind by communicating messages aligned with the changing needs of consumers. But customers are also scrutinising brands more closely and whether they are advertising adjacent to content that is inappropriate. The open web and walled gardens need distinctly different strategies to ensure this is avoided, which marketers must factor into planning, targeting and optimisation in 2023 – or risk their video campaigns failing.”

Julie Lock, Regional Leader, UK Marketing, HubSpot: "As economic pressure increases, so does the opportunity for impactful marketing strategies. Marketers should first identify where their target businesses see the greatest potential for growth and then focus on strengthening their brand presence in those areas. According to our annual Top Marketing Trends report, 90% of marketers who use short-form video will continue to invest in it next year, and one in five marketers plan to use it for the first time in 2023.

"Additionally, it's crucial to align marketing and sales efforts to ensure potential leads are not missed. While marketing generates interest and attracts customers, it's the customer experience that ultimately determines a sale. Without proper alignment between sales and marketing teams, efforts can be ineffective. By ensuring both teams are working towards the same goals and using the same insights, businesses can convert leads into revenue."

Stefanie Briec, Director, Head of Demand Sales UK and International, AudienceXpress: “Marketers are directing their spend towards quality ad inventory, which is emphasised by the strong growth of video. Premium video environments – such as connected TV – that ensure campaigns resonate with desired audiences, and which don’t rely on invasive tracking methods, are instrumental for marketers looking to make an impact during tough economic times.

“It’s clear premium video excels at delivering against brand objectives, and maximises performance by driving website traffic, app engagement, and online sales. The positive trajectory of main media spending also implies that marketers understand the necessity of balanced media plans for achieving this, all while looking to build the most cost-effective mix to hit their 2023 goals.”

Mateusz Jędrocha, Head of Upper Funnel Solutions Development, RTB House: “Higher budgets, particularly for video, are a great sign that brands are aware that they must spend smarter, rather than cutting the power off of their business engine.

“Ultimately these findings demonstrate the importance of implementing effective and efficient marketing strategies, especially in the current climate. And by establishing flexible partnerships, using the right tools, and state-of-the-art technology, businesses will be able to make a real impact.”

“We expect advertisers to become more human in their approach”

Richard Williams, Commercial Director, AMA: “Whilst the report shows audio budgets were unchanged in Q4, it is worth noting that digital audio ad spend is still projected to reach $225.50m in 2023. As more audio is being bought programmatically, brands should be looking to take advantage of audience targeting, to deliver different messaging to different audiences.

“With the current economic downturn and the cost of living crisis not going away, we expect to see advertisers become more human in their approach whilst ensuring their ads meet the expectations of all consumers. And this is where addressable advertising will come to the fore. In audio in particular, dynamic creative enables advertisers to create thousands of iterations of an ad, ensuring it’s contextually relevant to the listener’s interests and current environment. As a result, it’s a cost efficient way for brands to make campaigns more addressable and it’s likely more brands will be utilising dynamic audio in the months ahead.

Richard Kelly, Chief Revenue Officer, Mindshare UK: “After a challenging year it is encouraging to see that brands’ marketing spend intentions remain in positive territory and main media budgets holding up. We have learned a lot from previous downturns and advertisers have responded well to the cost of living crisis with campaigns that demonstrate empathy for the public and offer practical support.

“While there is optimism, we need to acknowledge that growth in ad budgets, and the wider economy, will be slow. Brands and agencies will need to continue to work in partnership to maintain positive momentum, and to actively drive good growth during uncertain times.”

Nicole Lonsdale, Chief Client Officer, Kinetic UK: “Out-of-home (OOH) is buoyant and the findings of this report don’t match what we are seeing in reality. The sector finished the year strongly. Based on data from Outsmart, media owner information, and our own experience, OOH spend was up by low double digit growth in Q4 – driven by the FIFA World Cup, Christmas, and pent-up demand following the death of the Queen, when many brands paused advertising as a mark of respect.

“Brands continue to be attracted to OOH’s traditional strengths such as trust and mass reach, while investment in programmatic and digital is allowing advertisers to spend budgets wisely and deliver personalised and contextually relevant campaigns at scale. Our figures show OOH grew 30% across 2022. Despite the economic headwinds, we're forecasting this growth to continue in 2023.”

Sarah Parkes, CMO, Talon: "Proving the efficacy of marketing strategies will be critical in ensuring brands weather the immediate economic difficulty, to benefit from the promising signals for the end of the year. It’s important for brands to avoid defaulting to methods because they’re considered familiar. Instead of a device-first approach, brands should embrace an audience-led omnichannel strategy including traditional channels, such as OOH, that deliver great outcome-based metrics."

James Dale, Managing Director, SINE Digital: “We strongly believe that the prioritisation of companies using digital-first, data-driven advertising as opposed to traditional OOH, is a key factor. Without being able to guarantee that people will visibly see – let alone engage – with your OOH advertisement, brands are now striving to make genuine connections with their target audiences that convert to monetary sales rather than put up a massive billboard and hope for the best. “

We are also seeing a huge demand for data-driven analytics. With the report also showing events as the top performing category in Q4, there’s never been a more pressing time to spend wisely within marketing budgets but also be more flexible in strategy of where campaigns are being delivered in an ever-changing environment impacted by many socio-economic factors.

“If events are going to continue gaining popularity we need to make sure people regularly attend them – particularly in the midst of a recession, cost-of-living crisis and overall bleak economic landscape. We have to make sure event producers and organisers know how important it is to use data-driven, digital-first campaigns so that they remain proactive and don’t get left behind.”

Anastasia Leng, CEO, CreativeX: “To stretch budgets to their full capacity, marketers must revisit age-old processes, and creative production and measurement are at the top of the list. Brands are sitting on reams of creative data, thousands of data points derived from their historical campaigns. It's a powerful yet largely untapped asset class, and first-movers like Nestle, Heineken, and Mondelez have started publicly talking about the impact it's making on everything from brand lift to sales. Creative data has many applications that give marketers an objective and scalable yardstick to measure everything from the creative quality of each ad produced (which is statistically tied to lower CPMs) all the way to the overall frequency of asset activation and reuse, which can unlock budget being spent on duplicative content creation.

“Whether we like it or not, change is gradually being forced upon us. We can wait for it to arrive in its full glory to begin the creative transformation work we know we need to do, or we can start early and get ahead.”