IPA Bellwether Q1 2024: Industry comment

ipa-bellwether-q1-2024-1

The latest IPA Bellwether survey for Q1 2024 pointed to a slight cooling in marketing and advertising budgets, but the events sector in the UK continues to boom.

Despite the cooling, sentiment appears to be more positive for the months ahead, according to the IPA.

So we’ve garnered the views of some of the leading lights of the adtech, advertising, marketing and events sectors in the UK, to get their take on the latest state of the industry report.

And with events continuing to shine, let’s start there…

Paul-samuels-aeggpPaul Samuels, Exec. Vice President, AEG Global Partnerships

“While an advert lasts just seconds, an event lasts for hours – and the memories, a lifetime – giving brands longer to engage with consumers and enhance their experiences.

“The increased spend and budget forecast for events shows that they are finally getting the recognition they deserve – it is a trend we’ve seen mirrored with our partners, having signed 112 new clients in the past 12 months.

“Events are incredibly versatile, allowing brands to use their activations to deliver to different brand objectives whether that is to increase consideration, reward loyal customers, meet sustainability objectives or demonstrate brand values in a meaningful way.

“And the opportunities for consumer interaction don’t end there; with live event partnerships we are able to bring in other marketing elements, such as OOH and programmatic, to create an integrated campaign that provides opportunities to engage with consumers before, during and after.”

Suzanna-Chaplin-CEO-esbconnectSuzanna Chaplin, CEO and Co-Founder, esbconnect

“The latest Bellwether report suggests that Q2 will see a return to spending, for both consumers and brands.

“As a category, ‘events’ are seeing the highest growth, and this is likely to be driven by a desire to see people face-to-face again, with a focus on getting customers back on the high street and into stores.

“Brands are prospering this way, and understand that creating experiences and communities in-store can boost growth.

“Online retailers such as Gymshark are championing this through new openings, and brands like M&S can leverage quick delivery with click-and-collect to maximise margins while lowering return rates.

“Meanwhile, we are seeing an increase in direct marketing spend and sales promotion, while there’s been  a decrease in spend on ATL activity, such as out of home advertising.

“This reflects the financial pressure brands are under to prove the value of their marketing activities, and many are switching focus to quick wins.

“Yet, promotions come at the cost of lower margins and higher returns. Brands need to tread carefully here, and look to promotional tactics that boost AOV, like basket-builders and loyalty programs.

“Direct marketing is always a steady performer, with channels like email delivering one of the highest ROIs out there.

“However, as the Barbie film taught us last year, no one channel is a golden bullet to marketing success, and because brand awareness will propel direct marketing efforts, advertisers shouldn’t shy away from a full-funnel, omnichannel approach.”

Daniel todaro-gekko

Daniel Todaro, CEO, Gekko Group

Within those services and categories that consumers mostly depend on and are happy to invest in, brands are looking at innovative ways and messaging to increase their share of voice against fierce competition, to remain relevant and to appeal to a broad audience.

“As the IPA Bellwether report shows, we are seeing more sales promotion and experiential briefs and consistent spend, coupled with a willingness to try ‘something new’ to meet these goals – all linked to measurable metrics.

“These additional briefs come with increased scrutiny on ROI, with consumer acquisition high on the list, and a tighter squeeze on margin, which is impacting every agency’s overheads, creativity and ability to offer a unique service.

Richard-Parsons-Founding-Partner-True
Richard Parsons, True.

Richard Parsons, co-Founder, True

“The latest IPA Bellwether report suggests the UK economy is picking up and I have a hunch that B2B is driving much of that growth.

“As it represents a massive chunk of the economy (up to 70% in some calculations) and B2B brands have been outperforming household names over the past twenty years, this is excellent news, but while we celebrate, it’s time for a reality check on how marketing is approached.

“Events are back, and networking is crucial for B2B, but often clients see these as lead-generation machines, not the start of a longer brand relationship. Direct marketing is B2B heartland.

“When the web killed off the trade press as the main channel in B2B, personalised email and even telemarketing stepped up. But these are fundamentally about finding those ready to buy now and do little to create future demand.

“Big-budget advertising gets overlooked. B2B is hesitant to invest boldly in the kind of brand-building campaigns that drive long-term growth.

“This, given that programmatic is opening up paid channels to B2B marketers that would never have been available before, like connected TV and digital out-of-home.

“B2B needs its own version of those iconic B2C campaigns that stick in the mind and shape market perceptions. It needs to embrace bold brand campaigns.

“If B2B marketing wants to finally claim its seat at the strategic table, it’s time to invest in the future through ambitious brand building.”

David Shaw, Co-Founder and CEO of CedaraDavid Shaw, Co-Founder and CEO, Cedara 

“There’s an obvious need for more accountability and integration of sustainable practices across the media industry.

“Q2 will be a pivotal quarter for this thanks to the upcoming release of GARM’s (Global Alliance for Responsible Media) media sustainability framework.

“As businesses adopt these guidelines, a decisive shift towards a net-zero future becomes more of a reality, marking a crucial milestone in our collective journey towards environmental responsibility”

Mattia-salvi-aryelMattia Salvi, Co-Founder & CEO, Aryel

“Advertisers want to achieve more with less, evidenced by the 0.7% reduction in main media budgets when compared to last quarter.

“However, with global attention spans fleeting and consumers overloaded by content, advertisers that seize consumer attention immediately with captivating and valuable experiences will have the upper hand.

“Augmented Reality (AR) solutions are now revolutionising consumer engagement, merging elements of immersion, interactivity, and effortless participation to transform mere online content into meaningful encounters.

“Advertisers leveraging these solutions can significantly boost consumer attention, making  instant impact with tightened budgets while delivering more satisfying and memorable consumer experiences.”

Caroline-Tredget-the-timesCaroline Tredget, Commercial Director, The Times & The Sunday Times 

“Our experience backs up the report’s findings. We’re seeing more and more brands engaging with Times and Sunday Times  audiences through live activations.

“The ability to reach a targeted, hard-to-reach and known audience through a high-engagement, authoritative event programme can really move the needle for the right brands. It can create a truly unique and memorable audience interaction.

“What’s interesting is that as well as a successful portfolio of consumer events, demand from B2B clients is growing for opportunities to connect and engage with business decision makers, something that we’re catering for with our roster of B2B summits, including, of course, our flagship Times CEO Summit.”

Tim-SapsfordTim Sapsford, Managing Director – Posterscope

“With Outsmart reporting almost 10% YOY revenue growth in out of home in 2023 it is somewhat surprising to see the figure from this report showing a net decline in spend.

“It is certainly not something we have experienced with our own clients who continue to grow their investment in the medium.

“With spending now back to pre-covid levels we expect to see positive YOY growth for 2024.”

ed-davis-bbnEd Davis, International Client Relationships, BBN

“We’re seeing similar trends across the BBN partnership, on a global level.

“One area we are watching closely is the use of AI. We’re not as concerned about competitors innovating with AI, this is a good thing that can push our industry forward in some very positive ways.

“However, it’s important to be mindful of IP, regulation and ethical issues that surround the use of AI.

“We’re more concerned about the use of AI by clients for creative work. This could be a bigger threat to creative agencies more generally.”

Julia Bielecka-Dąbrowska (1)Julia Bielecka-Dąbrowska, Head of Sales Development & Efficiency, RTB House

“With marketing spend in Q1 2024 remaining high, brands should be utilising deep learning technologies to enhance their campaigns as much as possible.

“It is encouraging to see that the report predicts a greater use of AI as a tool to optimise customer experience, for instance, this could be through the use of personalisation and precision targeting.

“Hyper-targeted campaigns can ensure the budget is optimised effectively while improving customer experience.

“Ahead of the next phase of cookie deprecation, competitors that do not remain agile to changing demands will be challenged, as intelligent tech is able to track and target customers far more efficiently than humans.

“Brands should embrace the role that AI will play over the coming  months, or risk being left behind.”

gareth-holmes-seen-thisGareth Holmes, Vice President Commercial Strategy & Media, SeenThis

“Brand advertising via any form of video – be that TV, CTV or streamed high-quality video into display – will be the winner here.

“Video provides much faster consumer attention capture and far higher brand recall than standard Display, and given the utility of display inventory in streaming video 2024 is rapidly evolving into a ROAS-centric year.

“With attention & engagement being the focal-point for many, it might not be long before we see far more video activations throughout our web & app browsing sessions as 2024 unfolds.”

Peter_Wallace_GumGumPeter Wallace, General Manager EMEA, GumGum

“The Q1 upwards revisions, particularly in online, do highlight optimism but also point to the fact that brands are making later decisions on where and when to deploy spend as they look to understand the fast-evolving economic landscape.

“Expect these revisions and quick decisions to continue through the year.

“Those channels and partners who stay close to brands, understand their objectives and react with more speed and agility than ever before will be the ones who win in ’24.”

sarah-vincentSara Vincent, Managing Director UK, Utiq

“It’s reassuring to see that market sentiment is moving from cautious optimism in 2023 to growing optimism in 2024.

“Macroeconomic factors are still a significant consideration but we are seeing many companies adjusting to uncertainty as a new normal and using the agility of digital advertising to navigate these changing headwinds.

“It’s interesting to see how the growth of video has slowed. It has had a good positive run over the past two years and we are now starting to see a taking-stock moment as buyers assess the most effective channel for advertising.

“I don’t see this as a negative – a continual test and learn and review approach is a good thing to ensure better outcomes.

“In terms of the decline in brand spend, pulling back on marketing in a recession is not wise. For those with deep enough pockets, it’s the perfect time to continue or even ramp up your spending to gain market share and benefit from more available airtime.

“We will see a split between brands that are spending and those that are holding – it’s to be expected.

“The bigger picture is that the market is growing and there is a sentiment of positivity, which means this slight downturn in spend will be short-lived, in line with the expected short-term recession.

“Finally, it’s interesting to see event spend increasing – a combination of fallout from the pandemic and people wanting to meet in person – but we are also seeing an uplift in the quality of events, as if attendees and speakers are being more selective about the events they attend.”

jason-warner-sbsJason Warner, Director UK and EMEA, SBS

“A brighter economic horizon is certainly welcome after so many months of turbulence and the overall positive picture in marketing budgets is a testament to the resilience of the advertising industry.

“The clouds have not fully dissipated, however, and many marketers will still find their budgets constricted and closely watched.

“To achieve the best results in these trying conditions, marketers need to be able to not just reach their end users effectively, but also deliver tangible results with their campaigns.

“Omnichannel activations will become increasingly effective in this regard, guiding users effectively from awareness to purchase.

“But this approach will only be effective when outside-the-box thinking is paired with best-in-class technology solutions that drive measurable and tangible results.”

rob-ishag-tripleliftRob Ishag, RVP Demand Sales, N. Europe, TripleLift

“Online budgets continued to grow steadily, despite the wider hit to main media budgets, and this has been driven in no small part by the effectiveness of ecommerce and retail media.

“With the UK not quite out of the woods economically and consumers continuing to be cautious, maximising the potential of this channel means not only being agile with spend, but embracing forward-thinking creative formats.

 “Ad formats that provide the ability to easily generate creative, with real-time components including product details, pricing, and promotions, will be massively advantageous.

“They not only stand out to consumers, but also allow brands to pivot their messaging rapidly in response to demand or fluctuations in the market, and so more effectively drive performance and ROI.”

Raphael Rodier, CRO Global, OguryRaphael Rodier, Global Chief Revenue Officer, Ogury

“Despite the drop in main media spending going against the grain after consistent quarters of budget increases, this slight fall is unsurprising.

“Advertisers are facing an unprecedented landscape, with digital in particular contending with the imminent end of third-party cookies from Chrome.

“The free internet was built upon advertising, so brands will continue to invest in digital, but many are still struggling to find an alternative to the cookie to target their audience and measure their campaigns.

“Advertisers must focus their tightened budgets on solutions that will prepare their businesses for the post-cookie era.

“These solutions need to be future-proof if they are to be truly effective, providing new ways to reach audiences rather than simply replicating the cookie.

“While this might add short-term pressure, this gives advertisers a solid platform for growth in the long-term.”

Stefanie_Briec_Freewheel
Stefanie Briec, Freewheel.

Stefanie Briec, Director, Head of Demand Sales UK & INTL, FreeWheel

“Despite the slower growth of video marketing budgets compared to last quarter, they are still on an upward trajectory, as other areas of main media spend decline.

“Contributing to video’s appeal is the fact that it is part of the ever-evolving advanced TV ecosystem; where advertisers can tap into premium video content on AVOD and FAST channels via connected TV (CTV), catering to wider, more diverse audiences.

“This translates to valuable incremental reach for marketers, which is crucial in today’s fragmented media landscape. Notably, ad views on these platforms are surging, with a 17% year-on-year increase in Europe during the second half of 2023.

“Moreover, with rich audience insights, these channels boast substantial measurement and targeting capabilities. We anticipate they will increasingly dominate media plans, especially as strong growth is projected for 2025.

“All this solidifies video as a reliable avenue for advertisers navigating tighter budgets.”

Hugh_StevensHugh Stevens, Managing Director UK, LiveRamp

“With a UK recession still hanging in the balance, the latest IPA Bellwether report is cause for cautious optimism.

“While growth has slowed since Q4 2023, total marketing spend remains buoyant and reflects confidence that economic pressures will soon ease.

“As those Media/Marketing, FMCG, Retail, and Consumer Durables representatives surveyed by the IPA highlighted, this will see consumer purchasing power strengthen and propensity to purchase increase.

“Of course, there’s ongoing sensitivity to the cost of living crisis and consumers’ price-driven decisions, with sales promotion experiencing a notable increase of 3.5% up from Q4.

“Marketers using these promotions must do so tactically and be careful not to undermine long-term brand health by focusing on price.

“Instead, the best way to grow business value from existing customers and prospects is to better understand their journey to purchase.

“This means maximising the value and operational efficiency of the customer insights available through owned first-party and second-party datasets.

“For example, an FMCG brand eager to understand its existing customers can, via data collaboration, unite its data with that of an external partner, such as a retailer, and unlock valuable insight in a privacy-centric manner.

“This can be used to optimise activations amongst lookalike audiences, promoting media efficiency and revenue.

“Indeed, data collaboration will increasingly underpin data-led marketing as the third-party cookie completes its deprecation this year, so brands must familiarise themselves with these solutions now before their competitors outpace them.”

Guillermo Martin, Chief Growth Officer, EXTE

“The results should be welcomed with cautious optimism, acknowledging the upward trend in total marketing budgets while also recognising the ongoing uncertainty.

“Despite economic challenges and global tensions, this growth shows that there is room for advertisers to engage with consumers by embracing advancements in technology.

“AI continues to be one of the biggest factors influencing the industry at the moment. Coupled with human creativity, AI offers valuable insights and tools to enhance engagement and relevance.

“We anticipate a greater use across the board as we adapt to evolving consumer behaviours and preferences.

“As the year unfolds, main media advertising is expected to grow and with this presents a ripe opportunity for brands to invest in high-dollar advertising campaigns.

“By embracing innovation, particularly in AI-driven solutions, businesses can leverage the reach and impact of various advertising mediums to effectively target and capture audience attention and drive engagement.”

Mateusz-Rumiński-rtbMateusz Rumiński, VP of Product, PrimeAudience

“It is interesting to see an increase in promotional period-based spending, while main media spending more broadly decreases.

“It wouldn’t be a surprise if this trend continues, accelerated by the potential of Generative AI, which will allow brands to further personalise, customise and time their messaging to reach the right audiences.

“It’s evident that now is the time for brands to invest in solutions that will maximise their spend.

“With cookie deprecation on its way, this is a turbulent time for the industry. Companies utilising new privacy-preserving technologies, including Generative AI, will likely win over those with years of experience who choose not to adapt and work with the right partners.

“There is a real opportunity for marketers to embrace generative AI for a digital advertising revolution, but in order to do this they must be ready to react quickly to what’s happening on both the macro and micro scale.”

Ned-Jones-Head-of-Advertiser-Customer-Success.jpegNed Jones, Head of Advertiser Customer Success, Permutive

“It’s reassuring to see overall marketing budgets increase, with a positive outlook forecasted for the remainder of 2024 and into 2025.

“This is particularly encouraging to see when you consider the digital marketing landscape faces significant changes this year, with third-party cookies finally being deprecated in Chrome.

“Removing third-party cookies considerably changes the process and mindset of buyers and planners in the programmatic space.

“Advertisers can no longer afford to shy away from the opportunity to test new solutions and approaches to targeting and measurement within programmatic.

“Leaving it until the final moment could result in losing market share and brand equity.

“Advertisers should use healthy budgets wisely and shift open marketplace spending into more direct pathways with publishers—using the right technology partners that are non-cookie reliant.

“This will allow advertisers to access a publisher’s total audience and can result in double or even triple reach, increased sales, and reduced CPAs.”

Philip-Acton-adform
Philip Acton, Adform

Phil Acton, Country Manager UK, Adform

“With the UK economy slowly beginning to show signs of recovery and edge its way out of recession, it is encouraging to see strong and healthy advertising investment in the latest IPA Bellwether.

“However, with consumer discretionary spend still impacted by the ongoing cost of living crisis, combined with the fact that competitors will be preparing carefully for the upswing, advertisers must utilise these budgets strategically.

“This means remaining curious and exploring new avenues and channels to generate ROAS. One example is Connected TV, which is a transformative medium and the IPA Bellwether’s growth in video ad spend reflects the continued interest in this channel.

“The explorative mindset is especially important as the ecosystem moves relentlessly toward the post-cookie era and advertisers leverage omnichannel.

“Brands must embrace the clean slate offered by new technologies and employ solutions like first-party IDs, which can change the game for advertisers and pave the way for a more compliant future in the industry.

“With this forward-thinking approach, brands can leave outdated practices behind and look to  innovative solutions that boost revenue, enhance consumer privacy, and utilise data efficiently and effectively for targeted advertising.”

Justin Reid TripadvisorJustin Reid, Snr Media Director, Intl Markets (EMEA & APAC), Tripadvisor

“In this report, the travel and entertainment industry cites macro issues such as inflation and its impact on cost-of-living as a threat to consumer spend.

“While these are ongoing concerns for our industry and beyond, marketers shouldn’t be put off when considering how to spend their precious ad dollars, in a more targeted and specific manner.

“For example, consumers are making more conscious decisions about the brands they buy from with a real shift towards spending with companies that align with their values and beliefs.

“For example, Tripadvisor research finds that 51% of UK travellers are willing to pay higher rates to use an environmentally responsible travel provider.

“It’s important to consider the current climate; however, marketers should see this as an opportunity, not a threat. It’s a chance to ensure they understand what their audience cares about to reach them in a way that will build long-term trust and brand loyalty.”

Nick-Reid-doubleverifyNick Reid, SVP and Managing Director, EMEA, DoubleVerify

“Ahead of a potentially challenging news cycle perpetuated by the several elections due to take place this year, advertisers must ensure that their budgets are directed toward solutions that can help them navigate this period, especially from a brand suitability perspective.

“This will enable them to promote responsible and nuanced advertising strategies, avoiding content that they may not find appropriate, without sacrificing performance.

“AI, which the IPA Bellwether’s surveyees highlighted as an area of opportunity, will play an important role in driving this responsible and successful media investment.

“In particular, solutions that can analyse signals, including Media Quality, Contextual Relevance, and Attention, at scale across channels and in near real-time will promote suitability alongside tailored, brand-specific outcomes.

“This will be particularly important for brands within the burgeoning UK and European CTV market, which our recent research with IAB Europe highlighted as needing greater transparency and quality verification.”

“Indeed, the IPA’s indication of AI being viewed as a threat by some respondents is also telling, as it is becoming increasingly clear that those advertisers who are not yet leveraging this technology risk being left behind.”