Comment: AA/WARC Expenditure Report Q2 reactions


The latest AA/WARC Expenditure Report is out, showing how the second quarter of the year fared.

There’s still growth, but it is slowing, and with a new Prime Minister in place in the UK, we can only guess where things will head next.

In the meantime some of the the leading lights of the advertising and adtech sector have given their take on the latest AA/WARC readings…

AA/WARC Expenditure Report Q2

Sue-Azari-appsflyerSue Azari, eCommerce Industry Lead, EMEA & LATAM, AppsFlyer

“As brands are looking to raise visibility through digital channels, marketers will also be focusing on owned media as a cost-effective means to maintain their connections with users and complement their paid online advertising strategies. 

“We’ve seen this within the eCommerce landscape in particular, with owned media conversions soaring 360% year-over-year in July 2022. 

“Brands and businesses across sectors can make the most of their budgets as well by investing in channels which deliver a positive ROI, meaning that the ability to measure paid activity across the full funnel becomes even more important. 

“Maximising impact and minimising wasted spend is now front of mind for marketers.”

Andy-Ashley-SmartFrame-TechnologiesAndy Ashley, Global Marketing Director, SmartFrame Technologies

“It’s reassuring to see continued recovery within the industry, but there is no doubt that the realities of a cost-of-living crisis, growing energy prices, and rising inflation are starting to take effect. 

“Brands are exercising caution when it comes to investing their ad spend, and these financial concerns are weighing on the minds of consumers and businesses alike. 

“What we all need most amidst this uncertainty is to create clarity. A customer wants to know what they’re getting and whether it truly meets their needs, while a brand wants to know where their ads are placed and whether their campaigns are effective. 

“Solutions that provide full transparency will help everyone navigate these choppy waters while maintaining vital industry priorities – such as a commitment to privacy and brand safety.”

Marianne-Yallop-.jpegMarianne Yallop, Global Head of Client Services, Redmill Solutions

“Marketers need to tread a very fine line as the economic situation worsens. From one side, brands will need to continue to reach consumers in a sensitive yet impactful way. 

“On the other, budgets are going to come under even closer watch, and marketers will have to fight for every penny of spend. 

“Marketers need to recognise that they shouldn’t wait for a ‘post-mortem’ on their media spend but have fingertip access to media data to be able to constantly examine customer intent and stay agile in response to unforeseen challenges. 

“This way, they can reduce waste to future-proof budgets and know exactly where their spend is in an ever-changeable industry.”

Chris-Hogg-EMEA-Managing-Director-LotameChris Hogg, Chief Revenue Officer, Lotame

“With the recession’s clouds on the horizon, there was worry media buyers in the UK would seek shelter by pulling back, but this forecast suggests they’ve chosen the braver strategy of powering through the economic storm with record spend. 

“Combined with the soaring interest in precise custom audience segments seen on our end, we’re confident that marketers are not just being brave with their spending, they’re being smart too. 

“It’s also reassuring to see healthy ad revenues for publishers, who have been fighting to stop the spend they depend on from being redirected to walled gardens.

“We’ve experienced increasing interest in cookie-free identity solutions from publishers seeking to enrich their audience data and remain competitive against the Big Three, and it’s wonderful that this seems to be paying off, as their success is the success of the open web”.

Clare-Dove-Future-plcClare Dove, UK Group Commercial Director, Future

“Our own data shows there is already mounting anticipation from consumers for Christmas and there are plenty of opportunities for brands to reach highly engaged audiences.

“It’s essential that marketers understand where these audiences can be found and foster meaningful connections with them to drive ROI. 

“Premium publishers can facilitate this relationship between advertisers and readers that match brands’ target audiences by providing accurate data on their interests and passions while producing content that speaks to their needs. 

“We have learned that Future’s audience is significantly more likely than the average UK consumer to opt in for “treating myself and/or my loved one” to various items and experiences in the next few months, for example. 

“Successfully tapping into ready-to-spend groups such as these can help brands shine and drive considerable uplift in Q4.”

faye-daffarn-MD-TugFaye Daffarn, Managing Director, Tug Agency

“In the current environment it makes sense that marketers are directing more budget into search as they look to compete for a slice of consumer spend.

“However, with sustainability high on the agenda for both brands and their target audiences, the impact of this increase on the environment should be considered – Google search queries already create over 400,000 tonnes of CO2 submissions each year. 

“Steps marketers can take to implement greener digital practices, whilst continuing to leverage the effectiveness of search include cutting back surplus parameter pages by consolidating them into master pages or placing advertising with search engines that prioritise sustainability.”

Charlie-Johnson-Digital-ElementCharlie Johnson, VP International, Digital Element

“While the cost-of-living crisis continues to impact both consumers and marketing teams financially, there’s still potential when it comes to Q4’s ad spend. 

“However, while investing during a recession has proved successful in the past, this does not mean simply throwing more money at any marketing activity. 

“Instead, marketers need to use tools and partners who can provide solid, future-proof solutions with measurable ROI. 

“Let’s not forget this is taking place in a new, privacy-first era with a renewed emphasis on contextual advertising. 

“IP intelligence can provide quality data that helps businesses optimise their efforts and targeting through vital user insights, such as location or connection data.”

Sam-Budd-Buddy-Media-groupSam Budd, founder and CEO, Buddy Media Group

“From a Buddy Media perspective, we have seen almost all our global clients, tech particularly, transitioning from a new customer acquisition strategy to a direct active monthly user and bottom-line focus. 

“This has required a substantial shift in approach, re-strategising and realignment as an agency to ensure we are able to maintain our service and client base going into 2023.

“With budgets and focuses under scrutiny, brands and agencies must find innovative ways to drive more meaningful connections, create desire and cut-through in extremely competitive landscapes to ensure consumers stay present and engaged, and ultimately, continue to spend during this tumultuous period.”

Daniel-Andrews-the-treeDan Andrews, CEO The Tree

“Despite uncertainty and economic upheaval, it’s positive to see that brands believe in the power of advertising. 

“Historically, marketing and ad budgets are often the first to go in challenging times, yet the latest research from the AA suggests that over the last 50 years, brands who pulled back the most during economic challenges were impacted the hardest in the long term.

“What is interesting, is the fact that measurable and performance related tactics will probably continue to be front and centre, however we feel it’s critical to invest in brands during these times. 

“Taking a foot off the peddle and not being front of mind for consumers when there are already growing customer acquisition challenges can be perilous.

“Through the use of The Tree’s social data, we can segment brands into categories that reflect the relative importance to the consumer:

  • Essentials – These brands will always be needed and therefore need to double down on their ad spend.
  • Treat economy – Whilst some industries may need to pull back, cheap and easy to access ‘treats’ like baked goods or skin care etc. tend to do well. And when consumer mood is low, we recommend keeping investment in advertising.
  • Postponable purchases – These brands cater to slightly more expensive desires, and require a more tactile advertising approach. Consideration and upper funnel advertising should stay on the radar, whilst demographic targeting can help improve ROI.
  • Expensive expendables – This is where you should consider just keeping the brand alive and in the minds of your customer, as opposed to a comprehensive advertising campaign. Avoid pumping too much money into direct response or performance, as you’re likely to get a lot of waste.

“Creating authentic experiences via social channels will be critical during the current cost of living crisis. 

“However, in the 6-8 months that follow the next two quarters, I expect to see more aggressive media spends, as we hope to move out of recession and back into a more stable growth phase.

Zvika_NetterZvika Netter, CEO and Co-Founder, Innovid

“With global economic uncertainty driving the need to “do more with less,” marketers will invest in technology to increase the effectiveness of their ad campaigns. 

“Independent, cross-platform measurement, especially, will be used to ensure they are efficiently reaching the right audiences, with the right creatives, in the right places and times – across linear TV, CTV, and digital video.

“Real-time, data-backed insights into who is watching, when, where, and the actions they drive, will also be table stakes, with advertisers leveraging the intel to make continuous media and creative optimisations that improve reach, strengthen outcomes, and directly benefit the bottomline.”

Stefanie_Briec_FreewheelStefanie Briec, Director, Head of Demand Sales UK & International, AudienceXpress at FreeWheel 

“Advanced TV channels, including video-on-demand and broadcaster video-on-demand, are experiencing notable growth because of their capacity to drive higher ad effectiveness and support advanced audience targeting methods. 

“This offers impact and precision, which are now vital as advertisers aim to make the most of budgets.

“Encouraging further spend in this space will require the video advertising ecosystem to address buyers’ top measurement priorities: these are verifying campaign results with an independent third party (38%) and ensuring the accuracy of campaign measurement data (37%), according to a recent AudienceXpress survey. 

“With budgets being subject to ongoing reviews, ad buyers will value the ability to further justify investment with trusted and tangible results.”

Raphaelle-TripetRaphaelle Tripet, MD, Demand Sales EMEA, TripleLift

“Growing investments in online formats – in particular display and VOD – signal brands’ awareness of how effective these channels are when it comes to targeting consumers during key shopping times and maintain share of voice in a very competitive time of the year. 

“However, even with increased ad spend in their pockets during the most lucrative quarter in the year, brands can’t afford the risk of taking a spray and pray approach to their campaigns. 

“It’s therefore crucial that advertisers look for efficiencies in their media buys but also in their campaign set ups and launch, which will enable them to secure better ad placements and deliver more impactful creatives”

Michal-Marcinik-CEO-Founder-adtonos.jpgMichal Marcinik, CEO & Co-founder, AdTonos

“It’s great to see that audio is recognised as an important part of the advertiser’s toolkit, as it’s proven to inspire better ad engagement and recall of up to 25% over other formats. 

“It’s also reassuring to see the industry as a whole displaying resilience in the face of socioeconomic uncertainty and political instability. 

“Nevertheless I expect more cautious spending in the near future. Companies that want to strengthen their market position during these times would do well to continue trusting in audio, with sonic audio cues outperforming visuals nearly ninefold. 

“People will still be listening to podcasts and streaming music even if there is a market downturn, so there will always be an opportunity to reach their ears.”

lee-cutterLee Cutter, VP Sales UK & Emerging Markets, Hivestack

‘’Continuing recovery for UK ad budgets, solidified by the strong level of investment predicted this holiday season, indicates that brands are aware that they need to continue or even increase their spend to remain competitive. 

“Among these trends is the growth in out of home (OOH) (expected to go over £1bn again in 2023) reflecting audiences’ increased return to public spaces, with OOH being a highly trusted channel to achieve contextual reach.

“In contrast to common misconceptions that OOH is a standalone media channel, marketers can leverage the benefits of programmatic digital out of home (DOOH) as part of their omnichannel mix. 

“Offering data-driven audience targeting and sophisticated  measurement solutions, the channel ensures that spend yields the best ROI, as ad budgets remain closely monitored.’’

Giovanni-Sollazzo-Founder-Chairman-AIDEMGiovanni Sollazzo, Founder & Chairman, AIDEM

“With UK advertising spend forecast to rise to £35bn this year and online advertising’s share set to grow to nearly 75%, it’s critical that marketers optimise campaigns to reach new performance heights in line with this investment. 

“For instance, by removing hidden fees from the media supply path, it is possible to improve results without extra spend.

“There is a bright future ahead for digital advertising. 

“But advertising, in the modern age, requires transparency as part of a healthy ecosystem; one in which marketers can reach their digital media buying objectives whilst protecting privacy. 

“To this end, many are looking into technologies which drive optimal media investment without any reliance on personal data.”

James_Leaver_multilocalJames Leaver, CEO,

“The latest Advertising Association/WARC Expenditure Report has forecast that the value of the UK’s advertising market will grow by just under ten per cent this year. 

“With online advertising’s share of total ad spend expected to cross the three-quarters threshold in 2023, it’s critical that those investing in digital media ensure maximum efficiency and effectiveness in their processes. 

“With a new record level of investment during the Christmas period, brands certainly need to ensure they are getting bank for their buck.

“To this end, it’s important to simplify the way digital programmatic advertising is purchased, with the aim of reducing friction and waste. 

“Fortunately technology today can help to ensure messages get in front of relevant audiences in the right environment, at the right time. 

“Ongoing campaign optimisation is absolutely critical in this challenging environment, with costs rising for businesses and households alike.”

Sean-Adams.jpegSean Adams, Global Insight Director & Partner, Brand Metrics

“With the latest Advertising Association/WARC Expenditure Report having forecast that the value of the UK’s advertising market will grow by almost ten per cent this year – with online ad spend’s share of total set to grow to three quarters of overall investment – it’s critical that the results of this record-breaking investment are measured carefully.

“Certainly my hope, with higher costs carving into advertiser margins and household budgets alike, is that advertisers ensure rigorous measurements; assessing the effectiveness of their investment as part of a wider aim to boost effectiveness in an iterative fashion. 

“This must involve more than a reliance on impressions and clicks and encompass strategic brand lift measurement and long term as well as short term impact. In this way, we must aim for science as well as scale.

“That said, it is reassuring that companies are continuing to prioritise ad investment even as they navigate inflationary and recessionary forces. 

“Indeed, research has shown the impact of ad investment can be even greater during a downturn.”