IPA Bellwether Q2 2023: Industry reaction


With the latest IPA Bellwether Q2 2023 survey comes a mixed picture of growth amid gloom.

So we’ve been out asking the leading lights of the marketing, media and adtech world for their take on the survey’s readings and where we’re heading next…

Sarah-Stratford-favour-the-braveSarah Stratford, Partner and co-Founder, Favour the Brave

“A record rise in sales promotions this quarter and an increase in direct marketing was interesting to see, but not unsurprising.

“These channels are traceable, and there will be a big drive to track and scrutinise all brand marketing efforts.

“The cost-of-living crisis has been rumbling on for over a year and now it’s really starting to bite. The latest interest rates hike affecting mortgages means even more people across the country are feeling the effects.

“But rather than resorting to sales promotion, brands have a real opportunity to turn up for their customers and be better.

“It shouldn’t be about route one of discounting or running competitions and promotions for short term gains. Now’s the time for brands to demonstrate that they get it. To find ways to make a difference to consumers’ lives and add real value.

“When difficult times hit, win consumers over by showing that you’re there for them – brands that innovate, help out and turn up will win consumers over for the longer term.”

Chris-Mellish-tmwChris Mellish, CEO, TMW Unlimited

“The report is both heartening and concerning in equal measure.  It’s great to see that budgets continue to grow solidly, and that very much reflects the picture we are seeing from our clients.

“However, what’s slightly alarming is the dramatic increase in those activities we align with the term Sales Activation.

“That’s not to say these aren’t critical but, as Paul Bainsfair (IPA Director General) points out in his commentary, brands need to be very careful to keep a balance between Brand Building and Sales Activation, particularly so in times of an economic downturn.

“It’s important to avoid the temptation of knee jerk reactions and the allure of short-term tactics.

“We speak a lot to our clients about the importance of managing this balance and our advice is often to ensure that we start their thinking from the middle of the funnel and build out from there.

“Rather than dramatically swinging activity from the top to the bottom of the funnel, starting at the middle allows brands to spend smarter.

“It’s there that a combination of decision drivers and barriers are at play, and where brand consideration can be earned and lost.

“Get this bit right and it’s easier to dial up and down that balance and keep your brand healthy whilst still achieving shorter term objectives.”

Tim Geenen-rayn

Tim Geenen, co-founder and CEO at Rayn

“The latest ad spend report is no surprise. The uncertain economy is having a significant impact on our industry so it would be unrealistic for advertising budgets to soar. Given this, we need to continue to focus on spending advertising dollars effectively to get the most bang for their buck.

“As the next era of advertising edges ever closer, marketers should ensure they have a strategy in place that means their digital campaigns reach audiences without third-party cookies.

“Contextual targeting is a welcome solution, however, to be most effective, audiences should be validated to create cohorts.

“By confirming customer interactions, the audience data becomes even more rich and valuable. So, when reaching the right audience at the right moment is even more important,  customer validated cohorts can deliver.”

Emma lacey zefrEmma Lacey, SVP EMEA, Zefr

“The fact that video budgets have not only remained resilient during recent economic instability, but consistently grown, is a testament to the value that marketers are finding in this format.

“However, increased spend can lead to increased chances of wastage. If marketers are going to continue to gain value from video and avoid misplaced ads, they need to prioritise high-quality ad placements in suitable environments.”

Pierre-Naggar-mintPierre Naggar, Director, MINT

“Given the record-breaking success of Prime Day this year, the largest in Amazon’s history, it’s understandable that sales promotions remained an attractive strategy for brands for the second consecutive quarter.

“But while promotions may yield short-term results, research shows that ROI is 45% lower when prioritising promotions over media.

“Brands need to weigh the benefits of immediate goals with long-term growth. Investing in technologies that provide an understanding of which channels perform best will allow them to reallocate budgets towards those that can provide better metrics and ROI.”

Thomas-IvesThomas Ives, Co-Founder and Director, RAAS LAB

“Despite the ongoing economic turbulence, the latest IPA Bellwether has encouragingly revealed online marketing budgets remained robust in Q2.

“As the report suggests, this expression of  cautious confidence is arguably thanks to brands increasingly recognising the value of AI within their ad stacks.”

“Indeed, to continue to effectively address the challenges facing the industry, brands must prioritise the delivery of higher quality and better targeted creative.

“Leveraging AI-based technologies here can help boost efficiency. For example, in deterministically assessing the best performing creative, and the most relevant digital environments, for specific consumer audiences.

“By harnessing the technology in this way, brands can both optimise ROI and reduce ad waste, ensuring the long-term sustainability of their advertising efforts in an increasingly competitive market.”

Kathryn-Roberts-Senior-Sales-Manager-AMAKathryn Roberts, Senior Sales Manager, AMA

“While this quarter’s Bellwether Report saw a -8% decrease in audio, let’s not forget, digital audio advertising spend is projected to reach $10 billion by the end of the year.

“Audio might have previously been seen as a tactic for upper funnel brand awareness activity, but with the emergence of digital channels and addressable creative the medium has opened up to the entire marketing funnel.

“Audio is uniquely positioned to serve both brand building activity and short-term sales promotions, giving brands more value for money.

“As marketers rethink their media strategies, they should take full advantage of digital audio.

“With the channel continuing to grow and mature, those that fail to embrace it across every stage of the path-to-purchase will be missing out.”

Mike-Khouri-tacticalMike Khouri, Founder & CEO, tactical 

“While it’s encouraging that marketing budgets are on the rise, the increase alone won’t necessarily buy you brand love.

“As the economy lags and competition for audience attention gets busier, brands need to make every impression – and pound – count in order to convert.

“Add to that an increasingly cookieless world, where audience tracking is only getting harder, the most reliable levers brands can pull on are Creative and Media.

“Often sitting in silo, these two together, when done right, gives brands the opportunity to deliver personalised experiences, at scale, in the arenas that are most relevant to their audience.

“So, while your budget might get you noticed, remember it’s the relevance of your creative to that specific audience that turns a spectator into a loyal fan, and secures long-term brand love.”

Maor-sadra-incrmntalMaor Sadra, CEO, INCRMNTAL

“We’ve seen a similar trend with brands scaling back spend on certain channels over the last quarter.

“Although there’s a tendency to jump to conclusions and attribute this to economic conditions and financial uncertainties, it’s worth recognising that many brands do preserve ad spend during H1, so they can go big in H2 and make the maximum amount of noise around summer, the shopping holidays and of course, the festive season.

“Despite what the industry likes to tout, reducing marketing budgets is not always a bad thing and doesn’t automatically result in less sales.

“We’ve seen many brands switch off spend on campaigns and channels during ‘off-peak’ seasons and it’s had little to no impact on their sales and revenue.

“In fact, a systematic approach to ad spend reduction can significantly improve overall profitability, as running campaigns that do not yield incremental results is like paying for a device that produces “premium air”.

Elliott MillardElliott Millard, Chief Strategy & Planning Officer, Wavemaker UK

“Another IPA Bellwether report, another story of a divided marketplace and another headline of increasing reactivity in the marketing community.

“Yet again, sales promotion budget increases is the lead story of the release with a spike greater than any in the last two decades.

“In a time of crisis, it is clear that marketers are playing it safe and pulling short term levers to maintain sales volumes and to satisfy shareholders.

“However, as is so often the case, there is a tension between marketing belief and consumer behaviour. Around 50% of the country (and this number rises to nearly 60% amongst key, desirable youth audiences) say that they are sticking to well known brands despite the cost of living crisis.

“And for many categories the number of people who place sales promotion as a key purchase influencer is actually in decline when comparing current behaviours to pre-Covid.

“Food, drinks, alcohol and toiletries all show declines in the importance of price promotion despite the rush from brand marketers to invest in this space.

“This is also where the division and nuance comes through. With 20% of marketers increasing budgets and 15% cutting, there is clearly a complexity to the current situation – not all brands are the same and not all brands should simply follow old ‘invest in brand rules’.”

Rick-LambRick Lamb, UK MD, Jellyfish

“The report revisions, while showing positive movement overall, signal some potential negative consequences.

“The shift to promotion-based activity at a time of rising costs will further erode margins, albeit as some pressures are expected to ease.

“Meanwhile the trend away from longer-term brand building budgets is known to be detrimental and becomes more important where growth in categories is forecast to be limited in the coming years.

“But every bad situation is a blues song waiting to happen and, while optimism is generally on the wane, opportunity and genuine utility is seen in technological advancements such as AI.”

Sean-Adams.jpegSean Adams, Global Insights Director, Brand Metrics

“The latest IPA Bellwether report shows a familiar trend – during difficult times, marketers often favour sales promotion activity.

“The rationale makes sense. Promotions generate valuable short-term sales with measurable outcomes.

“By contrast, brand campaigns have a greater long-term effect, but are harder to justify, especially without any proof of their impact.

“Even in hard times, marketers should continue investing in their brands, but also invest in measurement, understanding campaign impact across the funnel; creating awareness, building consideration, improving preference and driving intent.

“Without this focus on accountability, justifying any activity that is not performance-focused becomes more challenging.”

Piero-PavonePiero Pavone, CEO, Preciso

“The recent Bellwether report has indicated that marketing budgets continue to be on the rise, which serves as a welcome sign for the industry overall.

“Businesses have come to recognise the significance of safeguarding their brand in today’s fiercely competitive climate and, in return, have been investing in doing just that.

“Businesses are no longer viewing marketing expenses as mere costs but rather as invaluable investments with the potential for substantial returns – with a top-performing investment from the report being sales promotions and of course an honourable mention going to online advertising which saw an +8.3% of companies registered spending growth.

“There’s been a maturing understanding of the importance of brand protection and the value of strategic marketing.

“Now that people are really investing in their marketing strategies it’s all about finding the right tools to help you work smarter, not harder.”

Peter_Wallace_GumGumPete Wallace, GM EMEA, Gumgum

“The UK economy has been on something of a knife edge. The backdrop of increasing interest rates countered by improved consumer confidence scores and the ability to withhold a recession.

“History would suggest this type of uncertainty would lead to brands holding back marketing budgets – this report clearly shows brands want to continue to be seen and compete in the competitive landscape, a tactic which is proven to deliver long-term value.

“With no quick economic fix likely, the challenge for advertisers is how they evolve for the long term.

“Moving away from price-led messaging into tapping into mindset in order to influence consumers for long-term salience and loyalty, not just a quick win on price.”

Tom-Harber-Managing-Director-Aer-StudiosTom Harber, Managing Director, Aer Studios

“It’s promising to see that despite the obvious economic headwinds, businesses are still investing in marketing and brand.

“Whilst companies look to reduce cost to consumers via sales promotion in response to cost of living, it’s important we all take note of the long-term negative impact on brand value and overall performance.

“We can see in the Bellwether report that a clear opportunity to gain competitive advantage is further investment in (creative) technology.

“We’re certainly seeing a shift in marketing investment towards digital experiences and interactives with a keen focus on optimising user experience for web.

“Gamified experiences is one area in particular in which we’re seeing high growth, particularly in the broadcast and education sectors.

“This report also acknowledged the ongoing challenges with attracting and retaining talent. As we see it, one of the biggest opportunity areas is to ensure employee experience is best in class – people are looking for so much more than a competitive salary.

“Despite a highly completive landscape, we’re seeing higher retention rates than ever simply by listening to what our people want and acting.”