The IPA Bellwether Report Q4 2022 showed buoyant reactions among companies which are expanding their marketing budgets even as clouds loom over the economy.
So we’ve gathered extensive comment, reaction and insight to the latest survey from leaders across the media, advertising, marketing, adtech and creative content sectors…
James Leaver, CEO, multilocal
“Brands that want to achieve long term success will continue investing regardless of the economic conditions.
“It should go without saying that it’s important to be smart about how you spend hard won budgets in order to find the right audiences.
“Fortunately, new technologies make finding the right audiences at scale, with optimal efficiency, easier and more affordable than ever.
“Marketing is being used both ‘defensively and offensively’, the report suggests. It paints a heartening picture of an industry which understands the power of advertising when it comes to protecting market share and counteracting challenging economic conditions.”
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 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 than topline growth.
“This is reflected in the mediums that are seeing the most growth. Events, for example, help to drive trial 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, eCommerce Industry Lead, EMEA & LATAM, AppsFlyer
“Defence is now the best offence: marketers are investing in the channels that protect their market share
“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 (+9.3% vs. +6.3%), 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.”
Alex Young, Managing Director, We Are Futures
“It is no secret that the advice is to advertise through a recession for proven success in the long term but, more than that, hard times provide the perfect opportunity to open a gap on your competitors.
“Anyone prepared to forge a different path and harness the right channels and methods to reach people in a way befitting of the specific circumstances in which we find ourselves, will come out on top.
“Younger consumers are especially likely to notice those brands who use their voice to make a positive social impact.
“By switching up conventional ad campaigns in favour of investing in partnerships and projects that aim to establish a deeper connection with consumers, marketers can grow both the brand and drive its influence simultaneously.
“The numbers may show growth now, but there is no getting away from the fact we are heading into a period of uncertainty, so brands who are bold and challenge the conventional advertising patterns will almost certainly be those who come out stronger on the other side of a recession.
“Words always matter but actions combined with words will win at this time.”
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.”
Paul Coggins, CEO and Co-Founder, Adludio
“Following a difficult quarter, it is encouraging to see in the latest Bellwether report that marketing budgets have increased. This is crucial if marketers are to maintain their branding activity through a period of reduced consumer spending.
“If these budgets are to be spent effectively however, 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 report highlighted this in the noted interest amongst advertisers in integrating data-driven analytics.
“Technological advancements, in Artificial Intelligence (AI) 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.
Amy Norton, Growth Director at Incubeta
“While the report outlines an expansion in marketing budgets, we shouldn’t see this as a sign that the advertising industry is insulated from the macro-economic trends of the wider UK economy.
“Financial prospects are putting pressure on organisational budget planning, and most marketers will be engaged in ensuring their brand stays visible, while analysing all ad spend with a fine comb.
“Despite this, there are positives. With the power to equip consumers with financial literacy and therefore robust financial planning, it’s good to see the finance industry continue to invest in digitisation.
“Equally, these economic challenges are likely to drive efficiencies in insights and measurement. These innovations will ensure marketers can justify their campaign investments, overall driving transparency.”
Russell Pedrick, Director of Digital at News Broadcasting
“Whilst it is clear we are far from out of the woods when it comes to economic difficulties, it’s interesting to see that audio budgets have held up well. The digital audio space is growing rapidly, and brands must capitalise on this.
“In 2022, 27% of radio listening was through connected channels, so brands must now wise up to the fact that 2023 is the year to focus on digital audio advertising, while also prioritising awareness and brand safety.”
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, which outperformed all other segments in Q4.
“The result will be better return on ad spend (ROAS).
“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.”
Rachel King, Founder/Executive Producer, Parkview Creative
“It’s reassuring to see that marketing budgets are on track for growth in the next year, but it feels too early in the year to be spiritedly overspending.
“When budgets inevitably start being scrutinised more closely than usual it may feel like the natural response to slash spend on media but there are ways to save money or spend creatively which won’t impact negatively on a brand’s output.
“By streamlining processes and partnerships at the point of ad production, huge savings can be made without a detrimental effect on the end result.
“Yes, you have to be prepared to shake things up; put your trust in fewer, great minds and creative hands but having too many middle men sitting between the brand and the production agency will always soak up an incredible percentage of the creative budget.
“Working directly with producers means brands can then decide whether to bank the savings or to reinvest in the end product.”
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, despite gloomy assessment of economic prospects for their own companies and sectors.
“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.”
Adam Goodman, Founder, ACA Live
“The news that events was the top-performing category in Q4 comes as little surprise given the continued resurgence of the sector post-pandemic, but the news that expectations of budget growth are strongest for the events industry is hugely positive.
“It shows that those brands who invested in events in 2022 saw the real value of face-to-face engagement with consumers and experienced the unrivalled power of getting their brand’s message – and often product – out in an environment that no other media can touch for impact and connection.
“All of this should only add momentum to live events and continue to reinvigorate the sector long into the future.
“Marketers who have not considered experiential activity, sponsorship or a presence at events would do well to explore the opportunities on hand – there’s a reason so many brands are investing in live.”
Emma Lacey, SVP EMEA, Zefr
“Video offers marketers a means to achieve brand resonance in a relevant and compelling way, at a time when consumers are spending more cautiously and may be less inclined to convert.
“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.”
Daniel Pirchio, Founder and CEO, OneTag
“The IPA 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 that 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.”
Gareth Holmes, VP EMEA and APAC, SeenThis
“With a positively strong outlook for marketing budgets in 2023/24 there are some great indicators as we head into 2023, particularly with main media advertising growth being revised upwards to the tune of 4.4%. This is excellent news.
“Video looks set to enjoy a whopping 24% upwards revision. Coupled with the need for brands and agencies to embrace environmentally-less-damaging solutions and to commit to lowering the overall carbon footprints of their media activations, we are beginning to see a new epoch in advertising in which the creative – rather than the medium upon which it is consumed – is paramount.
“Of course, during challenging times, ROAS inevitably comes more sharply into focus as brands and agencies look to eek more mileage from the same charge.
“This is always wise, regardless of economic context, and we are certainly seeing video driving growth in both forecasting and performance on media plans.
“Many in the industry are also looking for fresh ways to leverage the initial high quality creatives brands produce, at not insubstantial investment.
“We are seeing many turn to streamed activations to enable this delivery of high quality advertising into what was once a static-only environment: Display advertising.
“Generally, this is a much more positive overall IPA Bellwether Report than most were expecting; providing a solid base for recovery as well as continued investment in technology which drives performance, protects margins, and helps to lower carbon footprints – alongside the fantastically effective activations share- and stake-holders are demanding.”
Charlie Johnson, VP International, Digital Element
“It’s great to see most brands are choosing investment over cuts, despite the wider context of economic uncertainty.
“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.”
Harry Harcus, Xaxis EMEA CEO
“Digital video stands out because 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 well 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.
“With all of this in mind, it’s no surprise that marketers are looking to invest more in 2023.”
Aviran Edery, SVP & GM, Marketplace, Verve Group
“With main media spending bouncing back, it’s important to focus on the growth drivers that will attract marketing investment in the coming year.
“The Q4 report continues to cite data-driven analytics and technological advancements, for instance, as the keys for unlocking stronger growth opportunities.
“This means 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.”
Csaba Szabo, Managing Director, EMEA, IAS
“The reading from the IPA Bellwether report around expanding budgets is encouraging. This indicates the value advertising brings to long-term brand growth, even during short-term economic headwinds.
“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 are able to 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.
Andy Ashley, Global MD, 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 optimizing their strategies and stay agile in challenging times.”
Stefanie Briec, Director, Head of Demand Sales UK & International, AudienceXpress, FreeWheel
“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.”
Matt Nash, UK Managing Director, Scibids
“It is clear from the resilient growth of marketing budgets, as indicated by the IPA’s latest Bellwether report, 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 that 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.
“Indeed, as the Bellwether report also highlighted, incorporating sustainable practices is high on the agenda for marketers.
“To this end, 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.”
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.”
Tony Marlow, CMO, LG Ad Solutions
“With the increasing prevalence of connected television in UK households, it’s no surprise that video budgets saw a record upward revision.
“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 also positive for marketers who are seeking to make meaningful connections with their respective audiences.
“One of the things 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.”
Luke Fenney, VP Addressability, Europe, LiveRamp
“In the face of worsening economic conditions in the UK, the buoyant growth of marketing budgets amongst one in five of those surveyed for IPA’s Bellwether report is a reason to be cheerful.
“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.
“As the report highlights, online channels are taking up a large and growing proportion of marketing budget allocation (a 6.3% increase on Q3).
“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.”
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.
“The latest IPA Bellwether shows this in true effect with firms expanding their marketing budgets to support brands through the H1 downturn.
“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.”
Mateusz Jędrocha, Head of Upper Funnel Solutions Development, RTB House
“It is encouraging to hear that companies are making efforts to adapt to the upcoming economic downturn, expanding marketing budgets to support growth.
“Higher budgets, particularly for video, which increased 13.7%, are a great sign that brands are aware that they must spend smarter, rather than cutting the power off of their business engine.
“Ultimately, however, 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.
“To succeed in the months ahead, it’s never been more important to take a proactive approach and invest in the right tools and resources.”
Richard Williams, Commercial Director, AMA
“It is reassuring to see marketing budgets increasing and whilst the report shows that audio budgets were unchanged in Q4, it is worth noting that digital audio ad spend is still projected to reach $225.50m in 2023.
“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.
“Furthermore, as more and more of audio is being bought programmatically, brands should be looking to take advantage of audience targeting, to deliver different messaging to different audiences.”
Ned Jones, Head of Advertiser Customer Success, Permutive
“It’s great to still see some growth in marketing budgets for 2023, given the economic difficulties we find ourselves in.
“However, 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 ad spend 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.”
Peter Wallace, General Manager EMEA, GumGum
“It’s great news that the latest Bellwether report indicates that marketing budgets are expanding, despite the subdued economic conditions in the UK.
“History tells us this is the right approach for advertisers to be taking. Brands that go against the grain, and continue to invest during downturns, often reap greater rewards than competitors.
“A famous example is how Kellogg’s doubled its ad budget during the Great Depression of 1929, creating a 30% profit spike and surpassing competitors to become the market leader.
“Rather than reducing marketing budgets, advertisers need to be pushing for greater efficiency in their digital campaigns, working with the right partners and technologies to help them reach relevant audiences with genuinely engaging messages and creatives.
“As third-party cookies and behavioural advertising are phased out, contextual technologies are emerging as the most effective way to do this.
“With contextual targeting, advertisers are able to analyse all of the data signals in digital environments, including text, image, video and audio, allowing brands to serve ads within only the most contextually relevant and brand-safe digital environments.
“Advertisers can deliver messages that perfectly match the mindset of the audience in the moment.
“This is a key reason why a study by Dentsu found contextual is 29% more cost effective than behavioural targeting.
“That represents significant cost saving and a much better return on investment, something which should be an absolute priority for advertisers as we head into more economic headwinds in 2023.”