Comment: IPA Bellwether ad industry report 2022 – part 2

Bellwether report ipa industry comment - Image by StartupStockPhotos from Pixabay

Here in the second tranche of our ad industry voices commenting on the latest IPA Bellwether Report, cautious optimism is once again the watchword.

New rules, new innovations and new threats are all combining to create a horizon over the next couple of years that will keep the industry on its toes…

Dom Woolfe, CEO UK, Azerion

“While the IPA Bellwether reports an eight-year high on ad investment, marketers who ignore the impact of the rising costs of living on consumers risk inefficient and uncompetitive campaigns.

“The brands that thrive in this uncertain period will be those that adapt to the current consumer behaviour with creativity. 

“The e-gaming sector, for example, is one of incredible potential as brands are now able to integrate and activate in-game ads into the creative of the game and serve them to a highly attentive audience.

“Brands must prioritise creativity and campaign effectiveness to succeed in driving brand performance and making the most of this boom in adspend.”

Justin Taylor, UK MD, Teads

“Following on from last quarter’s report, I’m pleased to see the optimism was well founded, with total marketing budget growth close to an eight-year high. 

However, this will be challenged by the issues facing our world today, from conflict in Ukraine to the rising cost of living. Across the industry, we’ve seen strong revisions in marketing budgets. 

“Now, it is vital that we as an industry are moving to make a difference in the world, helping to improve our planet wherever possible.

“With the eyes of the industry now focused on delivering sustainability, advertisers need to ensure that they are working as hard as possible to reach this goal. 

“One way in which they can achieve this is by spotlighting attention. By creating a framework for measuring attention, advertisers can deliver more engaging, shorter ads that in turn reduce their carbon footprint. 

“Sustainable media may only be a relatively small part of the ‘climate action’ equation, but with ad spend  forecasts lowered for the next two years, advertisers need to be smart with their creative. 

“Delivering sustainable advertising is key at a time when consumers are demanding climate action from the brands they consume. 

“As the ad industry continues to rebuild, it is all of our responsibility to ensure we are creating  a responsible and sustainable media ecosystem.”

Ryan Afshar, Head of Addressability UK at LiveRamp

“Digital marketing budgets continue to expand as the industry confidently rolls into the first-party future, with the IPA Bellwether report indicating budget levels at an eight year high.

“As last month’s IAB Europe guide made clear, the industry is well-prepared for the next stage of identity-based consumer engagement as addressability and first-party data become the cornerstone of our new transparent ecosystem. 

“To ensure that their ad spend budget is being directed efficiently, brands should continue to build campaigns based on people-based identifiers. 

“Simultaneously, publishers who can increase their authenticated user base using strategies such as content walls, newsletters and email subscriptions, will build trust and loyalty with their audiences as privacy and personalisation are balanced.

“Publishers and brands who can work together on strategies that have addressability at their heart will thrive as we enter a privacy-centred, addressable future.”

Natasha Banjo, Director of Operations at News Live 

“It is excellent to see the growth of marketing budgets on an eight-year high. In fact, all marketing activities are set to receive an increase in budget, with events leading the charge with an expansion of +22.1%. 

“Easing of pandemic restrictions during the first few months of the year has given businesses the confidence to put marketing spend back into this essential area.

“The next year will be a huge time for growth within our industry. The pandemic taught marketers many lessons around catering for all, for example, creating hybrid events to suit different audiences. 

“With reduced restrictions on large scale events, I believe we will see investment move towards face-to-face opportunities and projects as businesses seek to re-engage audiences.

“To succeed, marketers looking to move or return spend into events need to ensure the event concept is aligned with their brand messaging and audience interest. Flexibility will remain key, as we never know what’s around the corner. 

“And the key lesson here is that events need to be adaptable, as well as be able to deliver authentic and creative experiences.”

Richard Williams, Commercial Director at A Million Ads

“Advertisers should go beyond a tick-box approach to regulatory compliance, and integrate an ethical approach to data collection into their core functions. 

“The privacy-first future will benefit the publisher, advertiser, and the consumers as these trusted and transparent partnerships create a privacy-centric ecosystem to provide a mutually beneficial environment.”

“It’s great to see marketing budget growth close to an eight-year high. The industry is certainly bouncing back from the pandemic with marketing budgets looking optimistic for 2022/23. 

“As advertisers navigate this new landscape, we have seen audio content rise in popularity, especially with Gen Z audiences.

“With the rising cost of living having a huge impact on consumer behaviour, advertisers need to find creative ways to connect with audiences moving forward – and audio may well be the answer. 

“Dynamic audio, for example, allows brands to tap into contextual data points such as time of day, weather or the listener’s personal preferences. 

“For instance, with Easter approaching, a supermarket might want to promote chocolate for an Easter Egg hunt to drive consumers to their stores. This helps to increase relevancy, thus driving purchase intent.”

“As the ad industry continues to recover, advertisers and brands have plenty of opportunities to take advantage of audio advertising, and it is vital that they connect with audiences on a more personal level.”

Paul Coggins, CEO and Co-Founder at Adludio

“Digital transformation remains at the top of the agenda for 2022 as marketing budgets reach highs not seen since 2014, with online and ecommerce being major recipients of investment.

“As budgets expand, mobile advertising will become an even more saturated market, meaning brands will need to deliver ad campaigns that guarantee engagement against serious competition. 

“Despite this, true engagement is often overlooked, with technology and tools instead focusing on the lower parts of the marketing funnel. But this is ineffective if the campaign is lost amongst a sea of mobile ads. 

“Rather, the creative and engagement are intrinsically linked, with the design of the campaign the real differentiator. 

“In addition, engagement is more than a video view, it’s an interaction between brand and consumer, and technology can help ensure that it is as engaging as possible.

“Thankfully, marketers can now seek the assistance of innovative, proprietary technologies, like those which use AI-based algorithms. These leverage interactivity and historical creative data to target audiences with engaging ads. 

“This will shift targeting away from third-party data and social demographics toward an approach that is built on first-party data. This is more appropriate for the cookieless world and data-safe media buying. 

“To remain competitive in this crowded market, budgets should be channelled into technologies such as these.”

Harriet Cunningham, UK Sales Director, Scibids

“While it’s positive to see a near eight-year high in marketing budgets after a turbulent few years, a forecast of lower advertising spend reveals a greater level of complexity in the digital ecosystem right now. 

“If advertising is considered an economic risk, it suggests that current advertising practices – reliant on old models and technology – are no longer seen as viable. This isn’t surprising.

“For marketers that have taken heed of the dramatic changes seen in digital marketing, preparations via new platforms and technologies will have already taken place. 

“The most revolutionary of these new technologies has been AI, taking levels of data analysis to unprecedented levels. 

“In fact, as an increasing number of marketers use AI-driven solutions to harness new forms of contextual signals for targeting, conversion rates, attention and overall efficiency will increase.

“Brands and marketers should already be leaving clicks and visits as a measure of success behind, tapping into AI as a means to customise campaigns and analyse relevant data at a granular level to deliver advanced optimisation. 

“I expect in the long term we’ll see a resurgence in all digital marketing applications, driven by cutting-edge machine learning that maximises return on ad spend.”

Isabella Jenkins, Agency Partner at Permutive

It is exciting to see the growth of marketing budgets on an eight-year high following the turbulence of the pandemic. However, ad spend forecasts have reduced for the next two years. 

“If ad spend is to reduce, brands will need their advertising to work harder as a result, making more out of less spend. One way brands can achieve this is by leading with a strong first-party data strategy, reaching the right audiences in the most effective way possible.

“This strategy will necessitate partnering with publishers, providing brands with access to consented first-party data that publishers hold. 

“These direct relationships can give brands detailed insights into their audiences to ensure they are maximising the effectiveness of their ad spend in an unpredictable time for the industry. 

“User privacy can also be kept at the heart of this strategy, as no individuals are identified, meaning that brands can ensure they are being privacy-compliant in an age where user data is an invaluable commodity. 

“With this approach, advertisers can maximise their campaigns regardless of the ad spend forecasts, rebuilding trust in advertising once again.”

Łukasz Abgarowicz, VP of Agencies at RTB House

“2022 is shaping up to be one of the most important years in digital marketing – there’s a genuine feeling of change as we march towards the cookieless future. 

“Google’s announcements regarding Topics API and FLEDGE have provided some colour to a new industry built on privacy, but marketers will rightly be hesitant. 

“This hesitancy, and the significant effects of inflation on living costs, may explain why the report highlights an eight-year high in marketing budgets but a lower forecast in ad spend.

“However, with bigger marketing budgets comes an opportunity to tap into new technologies built to navigate the internet of the near future. 

“The most important of which is contextual targeting built on Deep Learning algorithms. Unlike traditional AI, Deep Learning is entirely autonomous, learning and adapting automatically without human input. 

“This technology turns contextual targeting into a highly effective strategy for delivering your message to the right consumers and can be used effectively within the framework set out by Google.

“If used correctly, the forecasted increase in marketing budgets could power the final transformation in the new privacy-first age.”

Niall Moody, Managing Director at Nano Interactive

“The latest IPA Bellwether report shows that the advertising industry is making a strong recovery from the pandemic, with an eight-year high on ad investment. 

“Understandably, however, the last two years have been particularly uncertain for the industry, with the pandemic and the impact of regulations like GDPR as well as the well fabled deprecation of the third party cookie looming large.

“To succeed in the months ahead advertisers need to re-evaluate their targeting approaches and embrace new innovative solutions that don’t rely on the identity-based practices of old. 

“In addition, out of necessity, we are seeing a growing appetite to find newer, more appropriate metrics to measure the effectiveness of advertising with the growing discussion around the Attention economy being one example.

“Further, we are seeing that changes in consumer behaviour means that the linear path to purchase no longer exists with needs, moods and mindsets evolving by the second. In turn this means brands must now show up at the most relevant time to the most relevant audience and create cut through like never before.

“Advertisers should therefore ensure they are working with technology providers that use deep learning models to analyse live intent signals with advanced contextual understanding to better deliver their messaging. 

“This approach puts people’s privacy interests and brand safety at the core, whilst delivering relevant and timely ads to receptive audiences.”

Claire Burgess, Director of Delivery at Incubeta 

“Our predictions that ecommerce will remain key in 2022 have rung true as 24.1% of IPA Bellwether respondents say they are expanding their marketing budgets and are looking to channel it into new online platforms. 

“It is encouraging to see the market regaining confidence, and reaching budget growth levels not seen since 2014.”

 “With the final lapsing of Covid restrictions, we are also seeing a return of increased budgets toward offline marketing, and as in-person shopping continues to recover, marketers must remain aware of the importance of omnichannel optimisation. 

“Digital has had large growth over the pandemic and will continue to spearhead shopping, but businesses should not forget about the value of offline experiences. 

“Instead they should ensure to strike a careful balance between the two, to ensure they are using a mixture of all marketing channels to support the user throughout their whole customer journey.

“New technologies will assist here, and these increased budgets should be directed towards innovation, such as the use of augmented reality to help visualise products.”

Nial Ferguson, Managing Director UK & Ireland, Sourcepoint 

“The report shows another robust quarter with marketing budgets at an eight-year high. 

“Despite this, there is a multitude of external factors that could influence business outcomes over the next three months – the rising cost of living, supply chain worries, and the global impact of the conflict in Ukraine are all challenges that marketers must ensure they’re sensitive to.

“These threats to consumer confidence mean that advertisers might be tempted to double down on personalisation tactics to ensure their marketing is impactful and efficient. 

“While consumers are more likely to engage with tailored pathways, they’re also going to be suspicious and frustrated by predatory tracking or inefficient user experiences. 

“Therefore, in Q2, advertisers need to be careful when assessing the balance between personalisation and privacy to make the most of the new investment.

“Advertisers should go beyond a tick-box approach to regulatory compliance, and integrate an ethical approach to data collection into their core functions. 

“The privacy-first future will benefit the publisher, advertiser, and the consumers as these trusted and transparent partnerships create a privacy-centric ecosystem to provide a mutually beneficial environment.”