IPA Bellwether Report Q1 2023: Industry comment and reaction

ipa-bellwether-q1-2023-Image by Steve Buissinne from Pixabay

Today’s IPA Bellwether Report showed the UK’s marketing industry buffering against multiple economic headwinds.

Here’s what the leading brains of the UK’s advertising, media, marketing and adtech sectors make of the latest state of the industry…

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Neil Godber, Executive Strategy Director, Wunderman Thompson

“It is hugely positive to see companies actively embracing a wide range of marketing tools and tactics to thrive and survive in uncertain times, including main media advertising alongside promotions, events alongside direct mail and future opportunities with AI.

“All this at a time when there remains pessimism towards the economic outlook later in the year, which may have led to retrenchment and reductions.

Permutive, Elizabeth BrennanElizabeth Brennan, GM for advertisers, Permutive

“It is great to see that marketing spend by brands has increased, despite there being a wider concern for future economic uncertainty moving forward.

“The optimism being seen across the industry is a great sign of what we can expect to see in the next quarter. Brands must use these budget increases to maximise the quality of the audiences they are appealing to.

“This is the time to consider how relationships with premium publishers can help with this. The privacy-compliant data that publishers can provide will give brands access to audience interests, behaviours and trends, as well as what they are engaging with online, all without compromising consumer privacy.

“ If they commit to this strategy, advertisers can capitalise on campaign success, which is vital in this economic climate.”

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

“Despite wider concerns about the economic challenges facing the industry this year, marketers are feeling optimistic about this quarter.

“With budgets starting to grow, and marketing activities on the rise, now is the time for brands to focus on opportunities where they can strongly engage with customers.

“The report indicated the role that AI in particular will continue to have, as many look to make investment in the technology over the coming year. There has never been a better time to utilise technology that can provide hyper-targeted, yet specifically tailored ads in a way that goes far beyond the capabilities of  a human alone.

“The power of these tools can ensure that this optimism continues, as budgets are used effectively to enhance efficiency and results across the board.”

Amy-Norton-Growth-Director-IncubetaAmy Norton, Growth Director, Incubeta 

“It’s reassuring to see that the advertising industry has somewhat survived the current economic difficulties as the main media marketing budget grew in the first quarter of 2023.

“With this comes opportunities for companies to incorporate more digital marketing methods into their own budgets to support growth over the coming year.

“Coming out strong off the back of economic challenges suggests marketers have developed innovative ways to drive efficiencies in insights and measurement.

“Approaching the future with cautious optimism, it’s important for brands to continue to invest in brand building to further cement customer loyalty.”

Matt Nash, Scibids (1)Matt Nash, UK MD, Scibids

“We know the last few years have been challenging for digital marketers, so it’s encouraging to see the latest IPA Bellwether report showing cautious optimism.

“Further, the UK digital ad market continues to be the biggest in Europe, and we can expect UK programmatic ad spend to comfortably exceed £26 billion this year.

“For us, however, a key takeout from the report is that companies are making positive investment intentions in relation to technology, and in particular AI and its numerous capabilities.

“In fact, our latest research revealed that 87% of UK brand-side marketers see AI as being an important part of marketing in 2023.

“This includes both Generative AI, such as ChatGPT, which generates new content or data based on information learned from previous data, and Predictive AI, which predicts future outcomes using past data.

“AI is a transformative force for the future as it can enable brands to see growth in sales and brand equity, driving ROI across programmatically-bought media. And at a time when budgets are constantly being scrutinised, this has never been more important.”

Clara-De-RosaClara De Rosa, Head of Customer Success, Adform

“After a period of widespread uncertainty across the industry, the latest IPA Bellwether report is a sign that things are now moving in a positive direction for marketers.

“Both online advertising activity and big-ticket campaigns on TV are on an upward trajectory for the first time in a year, which is encouraging to see.

“However, with the cost-of-living crisis still ongoing, both advertisers and consumers are more meticulous about where, and how, their money is spent.

“So for marketers to truly see a return on their ad spend in the current economic climate, it’s increasingly important to work with a partner with the ability to run coordinated omni-channel campaigns and target their audience in cookieless browsers when third-party cookies are phased out.”

Niki_Stoker-SVP-Global-Demand-OnetagNiki Stoker, SVP Global Demand, Onetag

“It is positive to see that despite a challenging economic environment, main media marketing, which includes digital marketing, has recorded its strongest expansion in spend since Q1 2022, signalling an optimistic outlook.

“However, to continue this growth trajectory, marketers should be demanding more transparency, efficiency and performance from their partners to drive toward a more effective and efficient programmatic ecosystem.

“Fortunately, new players are emerging in the market to do just that. By being agile, innovative and smart, they are able to create tailored packages that deliver higher KPIs for the same money and results with less ad waste.

“And at a time when reduced wastage and efficiency has never been more important, this will be a win-win for all.”

Naomi-Gould-LiveRampNaomi Gould, Data Science Consultant Manager, LiveRamp

“The latest IPA Bellwether report is a much needed optimistic outlook. Unlike during previous times of crisis where businesses paused marketing spend, there is now a realisation that marketers must still invest in their brand activity to ensure value perception isn’t compromised, especially as we move into recovery.

“What will be important however, is that marketers have the right measurement tools in place to truly understand how their campaigns are performing and ultimately providing the best performance and incremental impact.

“Measurements like econometrics are important to understand and track media spend on each channel, but with consumer behaviour in more flux than ever, marketers need to rebalance these models to take into account inflation effects we’ve not seen in 40 years.

“Now, marketers also need granular data to really understand why they are behaving that way. This high level view should be coupled with data on a campaign level to create a hybrid model of econometrics and data insights for better strategy, optimisation and ultimately performance.

“By collaborating with the right data partners in a privacy-centric way, marketers will be able to see a 360-view of their audiences to ensure their budgets are being spent most effectively.”

Harry-Williams-Senior-Marketing-Manager-AMAHarry Williams, Senior Marketing Manager, AMA

“It is encouraging to see that main media marketing budgets have had their strongest increase since Q1 2022. Even more so, marketing spend for audio, has seen an increase of +1.7%, which is the first growth since Q3 2021.

“After the economic uncertainty that dominated conversations in Q4 ’22 there has been a renewed excitement for adtech in the first few months of this year, notably in the audio space.

“Advertisers are looking at ways to target individual listeners more effectively, whether that’s via creative that addresses individual listeners or technology that allows them to respond in real time.

“Technologies like dynamic audio are giving advertisers a simple way to create and serve thousands of iterations of an audio ad at a minimal cost.

“Despite the continued economic climate, we are optimistic about the future of audio and remain confident that addressable audio will be a huge growth area.

“Why? Because it allows advertisers to flexibly plan, buy and execute content across long periods whilst keeping production costs low and without compromising on effectiveness.”

Natasha-BanjoNatasha Banjo, Director of Operations, News Live (News UK‘s Events Team)

“While some budgets have decreased, it is excellent to see that event spending has increased for the fifth consecutive quarter, as marketing executives look to re-engage with new and prospective clients face-to-face.

“From our own experience, we’ve seen this is pertinent for B2B events as advertisers are wanting to deliver more innovative and relevant events that are closely aligned with what’s going on in the world today.

“With 14.5% of companies expecting events marketing spend to rise in 2023/4, the opportunities for advertisers are ripe. However, to succeed, they need to ensure their events are aligned with their brand messaging and audience interest to be able to deliver authentic and creative experiences.

“Even more so, with budgets being constantly scrutinised, it will be imperative to collect as much data as possible to get that all important insight into how successful an event was.”

Raphaelle-TripetRaphaelle Tripet, Managing Director, Demand International, TripleLift

“It’s no surprise to see investment in video increase as brands realise its ability to drive performance during times of uncertainty, while offering a quality, brand-safe channel to reach consumers.

“This growth can also be linked to advancements in video advertising technology; providing innovative ways to drive campaign performance through creative.

“It’s positive to see that the report highlights sustainability as an opportunity for growth.

“For brands investing in video there are already ad packages that allow them to run campaigns across different formats – from native to streaming – as a way to ensure ad spend goes to support publisher sites that focus on sustainable products and initiatives.”

Bridget ArikBridget Arik, Chief Operations Officer, Redmill Solutions

“During the last quarter, we found global advertisers were increasingly bullish on their spending, but the rising budget allocated to sales promotions betrays an underlying understanding of the continuing impact of economic uncertainty on consumers.

“Successful campaigns rely on marketers being agile and course correcting budget allocation when required, and to do this effectively, analysis and control of the full marketing mix in a single, unified view needs to be prioritised.

“This will be vital for continuing to build close customer relationships until growth takes a firmer hold.”

Emma lacey zefrEmma Lacey, SVP EMEA, Zefr

“With video advertising budgets rising once again – up by +7.9% – this reinforces the value the format offers to brands looking to enhance their campaigns.

“While the cost of living crisis is ongoing, the persistent growth and expansion of video over the last quarter is encouraging to see and shows that marketers are seeing the value in investing in this engaging medium.

“It’s key that brands are maximising this video spend by ensuring suitable ad placements. More and more, we’re seeing agencies and brands looking for solutions to help balance cost and performance with the need for safe and suitable video inventory.

“The digital platforms are also developing tools to help navigate this, and are partnering with third-party verification solutions to provide greater trust and transparency for advertisers.

“With the increase of generative AI tools, and the challenge of deep fakes and misinformation, brand suitability will be under even more scrutiny moving forward.”

Hitesh-BhattHitesh Bhatt, Senior Director, CTV/OTT – EMEA, PubMatic

“The continued growth in video budgets reflects the shift towards ad-based streaming services that we have noticed in our audiences, especially among younger generations, who are more likely to favour alternative streaming options.

“This is just a taste of the growth we’ll see once the AVOD arms of SVOD giants, such as Netflix, Disney+ and Warner Bros.Discovery, gain full momentum and expand the volume of available inventory in the UK market, which is currently constrained by the relatively low number of AVOD viewers.

“As volume grows, the ongoing development of measurement tools and targeting capabilities will help CTV achieve the digital-like efficiency and cross-platform scale that buyers expect.”

Harriet Durnford-Smith - AdverityHarriet Durnford-Smith, CMO, Adverity

“Even as budgets keep rising, most CMOs are facing searching questions about return ratios on every outgoing — including not just ad spend, but also ever-climbing technology investment.

“CMOs will be scrutinised more heavily now than ever, meaning they’ll need crystal-clear results to justify spend.

“Those able to give CFOs and CEOs the most detailed, and accurate, breakdowns will have the best chance of both proving their value and unlocking greater resources by using granular insights to their advantage.

“Also as tempting as it might be to stick with what feels like safe bets for steady results, there is a high risk that favoured approaches and channels are eventually going to plateau.”

Alex-Khan-amplified-intellAlex Khan, EVP Global Partnerships, Amplified Intelligence

“While constantly rising digital media spend is now a quarterly expectation, the rate of flow is slowing.

“Part of this shift is due to inevitable deflation: extreme spikes driven by pandemic-amplified online interaction were always unsustainable. But an equally important factor is unreliable measurement.

“As diminishing cookie viability combines with continued reliance on limited time-in-view insights, marketers are struggling to accurately evidence their impact and make the case for budget increases.

“To optimise and enhance advertising investments, gaining a precise view of the true human attention campaigns yield across online environments and how that affects short term outcomes and long term objectives will be critical.”

pierce cook anderson equativPierce Cook-Anderson, MD, UK and Northern Europe, Equativ

“Given the continued inflationary pressures affecting marketer and consumer budgets alike, it’s no surprise growth in ad spend has slowed.

“But slowing growth is not the same as no growth, and there are still hotspots of activity for marketers to take advantage of. CTV and retail media opportunities, in particular, are providing new avenues to access consumers and though their somewhat nascent nature may require more effort to get to grips with than long established channels.

“Both provide savvy marketers with an opportunity to secure a first-mover advantage at a time when competitors might prefer to play it safe.”

Pierre-Naggar-mintPierre Naggar, Director of Sales, UK, MINT

“The current economic climate calls for a need to balance immediate pressures with longer-term brand building goals, without burdening customers with additional costs.

“With strong investment signals, it’s encouraging to see businesses still believe in marketing to get them through the turbulence. To cope with these demands however, brands need to ensure that their campaigns are as effective as can be.

“To this end, implementing technological changes that provide greater governance, transparency and efficiency, especially those leveraging AI and automation, is critical for marketing strategies.”

ben-cicchetti (1)Ben Cicchetti, VP, Corporate Marketing, InfoSum

“While it’s encouraging to see optimism among UK companies growing, it’s important to consider the bigger picture. High inflation and borrowing costs are likely to be with us for some time, so brands can’t be complacent.

“Consumers are becoming increasingly selective about who they spend their money with, so maintaining strong relationships with customers is key.

“Insufficient data security and privacy practices could cost businesses dearly; both through regulatory sanctions and loss of reputation.

“As the report notes, the surge in main media advertising budgets for the 2023/24 period suggests that brands will be investing in and utilising marketing tools that allow them to reach their audience with relevant and timely advertising.

“Technology investments need to pay off over the long term, so organisations must assess which platforms and providers can best help them future-proof their targeting, activation and measurement activities.

“Brands must make the most of their first-party data, while ensuring collaborations with media and data partners are both fruitful and secure.”

toby-mcara-making-scienceToby McAra, CRO, Making Science

“Feedback from our own clients and prospects mirrors the findings of the report, and indicates that the period of bouncing along the bottom appears to be over.

“We know traditional TV advertising can be expensive and to see the continuation of increased video advertising budgets shows us that confidence is returning.

“That said, mathematical rigour should still apply. Digital is incredibly powerful and programmatic display, for example, can be effectively activated to drive branding or campaign performance.

“Brands that combine this approach with a strategic use of their first-party data and a correct attribution model will be amongst those delivering the best return on their increased advertising spend.

Csaba-szabo-iasCsaba Szabo, Managing Director, Integral Ad Science (IAS)

“It’s no surprise to see video budgets once again increasing, despite the economic headwinds still buffeting consumers and brands alike.

“The increasing reach and scale of this format, thanks to the rapid growth of connected TV (CTV) and popularity of video-based social platforms, makes it a no-brainer for marketers as they look to reach UK consumers.

“In order to stand out from the pack in these video environments, marketers must ensure every penny of their ad budgets is being spent effectively.

“By harnessing the power of contextual targeting they can grab audience attention across social media platforms, CTV channels, and web sites.

“Embracing AI-driven multimedia classification tools on these platforms will be vital to ensure both effective campaigns and an enjoyable consumer experience away from any harmful content.

“Taking this a step further, marketers should also utilise attention metrics to enable a truer insight into the impact of ads on consumers.”

Zuzanna Gierlinska xaxisZuzanna Gierlinska, Chief Growth Officer UK, GroupM Nexus

“Marketer optimism is on the rise in 2023 as demonstrated by the significant uplifts to online video and audio budgets, however there continues to be a laser focus on the need to prioritise efficiency and expect every penny invested to boost performance.

“Effective cross channel strategies are paramount for maximising value across all advertising mediums and ensuring that each channel works in tandem to deliver against brand-specific KPIs.

“To fully harness the opportunity of cross channel media buying requires intelligent and innovative automation to streamline the complexities of fragmented environments and enable marketers to optimise spend for the channels that drive the best business outcomes.”

Edward-Wale-VP-Europe-LG-Ad-solutions
Edward Wale, LG Ad Solutions

Edward Wale, VP Europe, LG Ad Solutions

“The continuing growth of video advertising budgets reflects the increasing popularity of CTV, and the success of ad-supported CTV channels.

“As forecast by the report, consumer purchasing power will likely remain squeezed until 2024, prompting  viewers to reduce their subscriptions and instead utilise ad-supported offerings from the likes of Netflix and Disney+.

“This increased consumer interest in free, ad-supported television (FAST) will further fuel its attractiveness to marketers.

“To ensure a successful impact across CTV channels however, marketers should make sure every advertising decision is driven by audience preferences and habits – and for that, granular data is vital.

“The ability to monitor audience data across channels and devices, through technology such as automatic content recognition (ACR), allows marketers to accurately target their audience effectively for a streamlined TV campaign.”

Alison HardingAlison Harding, VP of Data Solutions, Lotame

“We’ve seen a good lift in data sales in Q1 2023 over last year and nearly on par with the highs of 2021, which tells us that marketers aren’t only spending more, they’re spending smarter.

“Cost pressures have disrupted brand consumer loyalties, so marketers must remain proactive in securing insights beyond their first-party data that can reveal which channels provide an opportunity to make an impression on price-conscious customers keen to jump ship.

“This might explain the surprise surge in investment on events, which offer a rare chance to get face time with customers and prospects, as well as the expected boost in sales promotions.”

evgeny_popov_verveEvgeny Popov, EVP, GM International, Verve Group

“The continued shift to digital comes as no surprise in the current environment where being able to measure ROI is more important than ever.

“However, the upcoming loss of cookies and identifiers means the biggest growth opportunities will come to those who invest in privacy-centric solutions that can leverage non-personal data to enable accurate targeting and performance measurement.

“With more positive financial prospects ahead, smart marketers will allocate budgets to new technologies and marketing partners that can deliver on this.

“I expect we will see these allocations grow as brands and merchants plan ahead to later in 2024. These initial signs could bode well for stronger fourth-quarter/holiday campaigns to capture even more revenues than initially planned.”

dan-pike-covaticDan Pike, Chief Product Officer, Covatic

“The results from Q1 2023 show that long-term brand-building goals have not been forsaken despite tough conditions, and the investment in main media marketing alongside sales promotions bodes well for future resilience.

“One exciting development is the uptick in audio advertising, demonstrating renewed (and well-deserved) confidence in a medium known for its popularity with consumers – with podcasts hailed to be one of the biggest growth opportunities in 2023.

“Nevertheless, ongoing economic uncertainty and closer scrutiny of environmental efforts highlight the need to advance on both of these fronts.

“Companies can build trust with key audiences and strengthen their business credentials by integrating a sustainable and flexible approach to planning and strategy to meet market and consumer demands.”

Lucia_MastromauroLucia Mastromauro, Managing Director, Acceleration UK

“Businesses must prioritise innovation to get the most from main media budgets.”

“Despite economic uncertainty, the upwards trajectory of spend on main media advertising from the last quarter, set to continue over the year, provides cause for optimism.

“With budgets set to increase, It’s vital that marketers are in a position to accurately target and measure their campaigns in a complex privacy and regulatory landscape.

“Bringing together fragmented data from multiple platforms and technology solutions will be key for businesses that want to reach customers across multiple channels.

“Organisations must prioritise innovation, adopting the latest privacy centric solutions, while experimenting with maturing technologies such as generative AI in order to drive automation and boost efficiency.

“But only by ignoring the buzz and taking an objective-led approach to testing out technology can they determine which solutions bring genuine business value.”

Paul-Thompson-seedtagPaul Thompson, Country Manager, Seedtag

“Despite the growth of sales promotions during the last quarter, according to the report, it’s no surprise to see marketers continuing to invest on the essentials of brand building.

“Driving loyalty and maintaining a presence is vital to retaining and taking market share, but these promotions provide essential cut through and reward consumers with lower prices .

“As economic and political instability recedes further into the rearview mirror, advertisers who are bold and hold their nerve will find themselves coming out ahead of the competition in the near future.”