Interviews, insight & analysis on digital media & marketing

IPA Bellwether Report Q1 2024: Industry Reaction

The Q1 2024 IPA Bellwether Report revealed that main media is suffering, despite overall marketing budgets continuing to grow. Just shy of a quarter of companies revised their marketing budgets upward in the first quarter of 2024, versus 15% that saw a contraction.

Here’s what a group of industry experts have to say about the results:

Hugh Stevens, Managing Director UK at 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.”

Phil Duffield, VP UK at The Trade Desk

“This quarter’s decline in main media, highlighted in today’s IPA Bellwether report, coupled with the continued deprecation of third-party cookies is forcing marketers to rethink where and how they invest their ad budgets. Regardless of a change in spend, advertisers must not lose sight of the opportunities to target audiences on the right channel and at the right moment as we approach the next era of the open internet. 

“Without ads, consumers would have to pay approximately £25 per month to access the content they love. Targeted, relevant advertising is therefore vital to ensuring the open internet remains free and accessible for all. 

“To ensure long-term growth, brands must prepare accordingly by unleashing the power of their first-party data. Using these insights along with the right identity tools to reach the 57% of Brits* who spend quality time on the open internet, will be invaluable for brands in the coming months.”

Caroline Tredget, Commercial Director at 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.”

Rachel Macey, Director, TGI at Kantar Media

“The latest IPA Bellwether findings show a cautious optimism among marketers and we are seeing echoes of that in our consumer data too, with some groups more willing to spend on the things that really matter to them.  There are pockets of potential growth if you know where to look, and whether it’s events or direct marketing, the key to teams making their budgets go further this year will be identifying those people who are loosening their purse strings, understanding what drives them and building campaigns around them.

“Our TGI data reveals for example that engagement with events is certainly on the rise, especially among the young. Just in the past two years, the proportion of Gen Z who say they prefer to buy products from companies who sponsor exhibitions or music events has grown from 14% to 19%. Diving into the subtleties of data in this way is absolutely key to helping brands and their agency partners develop more sophisticated targeting and maximising return on investment, so it’s good to see the small uplift in insight budgets during this quarter at least.”

Justin Reid, Senior Media Director, International Markets (EMEA & APAC) at 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.”

Matt White, VP EMEA at Quantcast

“Q4 is traditionally the busiest time of year for consumer spending, with Black Friday closely followed by Christmas, so it’s quite surprising that ad spend increased in Q1 2024. While many will say the captive audience the holiday season brings has diminished, marketing teams have clearly been looking ahead to a year filled with key advertising moments, wanting to plan early rather than compete last minute.

“The summer brings with it Euro 2024, closely followed by the Paris Olympics, both of which are happening in time zones that are conducive to strong consumer engagement in the UK. The continued growth of CTV will no doubt have played a role in increased ad spend as well, with the latest figures highlighting a strong uptake of Netflix’s advertising tier – 1.45 million homes in the UK, and 23 million active users globally. As this grows, so will the volume of brands investing in the platform.

“Q1 also saw Google begin its deprecation of third-party cookies on Chrome. Whether marketers have started investing in cookieless advertising or are waiting for more clarity, spend will increase throughout the year. The rest of 2024 will see more brands begin taking advantage of finally being able to reach 100% of the open internet, rather than accepting the diminishing returns of outdated targeting approaches.” 

Ned Jones, Head of Advertiser Customer Success at 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.”

Laura Lane, Head of Marketing UK&I at HubSpot 

“Whilst consumer confidence levels may not yet fully echo this sentiment, there are reasons to retain optimism, as evidenced by the recent uplift in marketing expenditure. The thriving expansion in the events sector underlines a growing appetite for face-to-face interaction, accentuating the value of forming connections. As advertising budgets are continuously revised, it’s vital for marketers to closely observe these shifts in consumer behaviour to maximise the efficacy of their strategies within restrained budgets. Future success will depend on the ability to seamlessly coordinate all marketing activities, ensuring both value for money and sincere customer engagement.”

Phil Acton, Country Manager UK at 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.”

Maor Sadra, CEO at INCRMNTAL 

“It’s not at all surprising that digital advertising budgets were down in the first quarter of 2024. The industry is currently undergoing what is probably its biggest transformation to date, with multiple privacy changes, most notably, the deprecation of third-party cookies and Apple’s enforcement of ATT.

“Far too many marketers have gone into this year unprepared for the impact of losing user-level data. And as such, we’re seeing marketers make uneducated and ultimately financially terrible decisions on where to allocate their budgets. The fluctuation we’re seeing between budgets assigned to different advertising channels indicates that many marketers aren’t able to accurately measure the true value of their advertising tactics. Hence, they’re throwing money at different mediums to see what sticks.

“But marketing measurement didn’t die with the loss of the cookie. Quite the contrary. Solutions exist that provide highly accurate, privacy-safe insights, which are even more precise than user-level tracking. Advertisers simply need to work with the right partners that can tell them exactly which channels and tactics are driving revenue and which are redundant.”

Julia Bielecka-Dąbrowska, Head of Sales Development & Efficiency at 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.”

Mateusz Rumiński, VP of Product at 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.”

Anthony Pey, Head of Marketing Effectiveness at Medialab

“It’s positive to see budgets have continued to have a net upward revision of +9.4% this quarter, suggesting once again that market conditions are stabilising, as per consumer confidence scores.

“Marketing budgets are often seen as a good temperature check on the direction of travel for the overall UK economy so seeing this continued trend is indicating a potential road to recovery and increases optimism for 2024/2025.

“Individual channel movements provide further evidence, with the growth in events, online and video formats suggesting advertisers are opting for and seeing the value in brand-led consumer experiences and high-impact, engaging channels to aid cut-through and ensure they have stronger brand metrics and recall vs their peers.”

Guillermo Martin, Chief Growth Officer at 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.”

David Shaw, Co-Founder and CEO at 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”

Fadi Khater, Co-founder of OSSA

“SMEs represent 95% of businesses and half of our GDP, yet their voices are often not heard. While it’s positive to see marketing budgets steadily climbing at big firms, weak consumer confidence means it’s still difficult for smaller businesses to commit precious time and resources to advertising.

“Digital budgets may only be growing slightly for bigger businesses but for SMEs, it’s their best route to awareness and brand building. These smaller brands must contend with fierce competition and the challenge of growing their name so it’s about time we recognise their needs and successes – the UK’s long-term economic health relies on them remaining robust as the nation exits the recession.”

Nick Reid, SVP and Managing Director, EMEA at 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.”

*This article features views from Bluestripe Communications (owned by Bluestripe Group, publisher of NDA) clients as well as external contributions