Interviews, insight & analysis on digital media & marketing

IPA Bellwether Report: the industry reacts

NDA spoke to some of our industry contacts to gauge reaction to today’s IPA Bellwether report in which we saw the good news that total UK marketing budgets remain in positive territory.

Russell Pedrick, Director of Digital at News Broadcasting comments:

“The increase in video spend cited in the latest IPA Bellwether should be of little surprise. Younger audiences are continually shifting away from linear TV consumption, and opting for new platforms such as TikTok and YouTube Shorts, as well as the likes of Netflix and Disney+. In fact, across News Broadcasting brands, we now generate over 100m video views a month with 25-34 age demo driving the highest share of these views.

“Video remains the most powerful way for brands to tell an immersive story, but the shorter attention spans of younger audiences present a huge challenge. Understanding younger consumer behaviour will be key to success on this front, empowering brands to use digital platforms to enable targeted opportunities at scale. There is something to appease every advertiser’s KPIs within video, in both response and brand campaigns, so it’s time they use this opportunity to build their brand and reach their audience in a personal and impactful way.” 

Elizabeth Brennan, GM for advertisers at Permutive, comments:

“While marketing budgets have grown in the last quarter overall, main media advertising expenditure is still low. This is unsurprising given the challenging economic conditions still affecting the UK and elsewhere. Marketers must focus on making the most out of these stretched budgets, particularly given reachability has tanked to just 30%. 

“Advertisers that follow ‘the path of least resistance’ by accessing the open marketplace are no longer accessing the vast majority of online audiences. For advertisers to protect their brand equity, it’s fundamental that they start to reach audiences outside of just 30% that have an identifier.  This becomes even more important in the current economic climate – brands need to efficiently reach as many customers as possible rather than spending the majority of programmatic budgets reaching the minority of available audiences. 

Julia Bielecka-Dąbrowska, Head of Sales Development & Efficiency at RTB House comments:

“It is encouraging to hear that marketing budgets grew solidly in Q2, particularly given the ongoing economic downturn. But with interest rates set to impact marketing going into 2024, brands need to investigate the technologies that will maximise ROI, to ensure budgets work as hard as possible. There are still untapped opportunities within artificial intelligence that can support this, including Deep Learning. This best-in-class technology provides hyper-targeted advertising that can enhance results of campaigns in ways far beyond human capabilities. Capitalising on these opportunities and working with the right partners can ensure success in the coming months.”

Duncan Chater, Managing Director, Europe at Bloomberg Media

“Whilst the headline results of this report were largely expected, we are seeing a mixed picture across our business. Corporate responsibility and brand strength continues to be a consistent focus – these ambitions typically require a longer term vision and commitment. Driving impact and capturing progress with Key Audiences beyond standard metrics helps to showcase the future returns.”

Kathryn Roberts, Senior Sales Manager at AMA comments:

“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.” 

Matt Nash, UK MD, Scibids comments:

“Even in the face of deflated consumer spending, the fact that online marketing budgets have continued to grow reflects the confidence of digital teams to maintain and drive business outcomes. This cautious optimism can be partly explained by the uptake of AI, which the report highlights as a key focus for marketers. Indeed, this is analogous with that of our own survey, which found 87% of UK brand marketers consider AI as an important part of their media plans in 2023. 

“With a plethora of use cases, from SEO optimisation to creative design, teams who are focusing investment on customisable AI will unlock particular value and scale. With the need to drive transparent ROI and maximise efficiency across programmatically-bought media at an all-time high, customisable AI offers a powerful tool. Media buying teams who explore AI now will find it serves them well through this downturn and into the future”

Nicola Webb, UK Sales Director at Azerion comments:

“The report shows that inflation and the cost-of-living crisis has inevitably made its impact on the industry, with main media marketing budgets falling across the industry. Whilst this is not surprising, it does present an opportunity for marketers to highlight the importance of value and focus on strengthening brand awareness.

“Our own research found that over half of consumers plan to focus on essential spending over the next six months by cutting back on day-to-day spending. Advertising luxury items to consumers on a budget may appear tone-deaf and out of touch. So, brands should make the most of insights into consumer behaviour and leverage this data to help understand their audience on a deeper level. This will allow them to be more innovative in their production of targeted creative that is relevant and timely for their audiences’ current financial situation.”

Tim Geenen, co-founder and CEO at Rayn, comments: 

“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.” 

Thomas Ives, Co-Founder and Director at 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.” 

Hugh Stevens, UK MD at LiveRamp

“The results of the latest IPA Bellwether mirror those of our recent research into the priorities of senior UK marketers in Q2 2023. Both indicate clearly that the lessons of the last few years of crises are being considered. For one, brands are currently choosing to strengthen marketing budgets in the face of economic pressure rather than making cuts. Whilst it’s clear that brands are sensitive to the pressure on consumers’ price-driven decisions right now by increasing their focus on sales promotions, there is also the acknowledgement that brand value needs to be protected for long term health. As such, brand intention to invest in technologies is firmly on panellists’ radar. 

“What will spell success for marketers in the second half of the year is a continued investment in understanding the evolving customer journey – the biggest indication of this was a notable increase in spending on more accountable digital media such as online and video, whilst other media was reduced. However, in order to build a complete, 360-view of their customers and understand the impact of every media touchpoint, brands need to have a strong, first-party data foundation in place. Data collaboration, that is bringing together data from internal and external sources to unlock valuable insights and democratise the careful and legal use of this insight, is crucial. Indeed, one need only look at the meteoric rise of retail media networks, which are fuelled by collaboration, to understand the power of data partnerships. Marketers who have not yet taken steps to evangelise and align their organisations, in collaborating with other data partners and internal stakeholders, must act now or they will never catch-up.”

Lina Adelt, Global Marketing Director at Onetag comments: 

“Overall UK marketing budget growth sustained in Q2 but with the current challenging economic environment, marketers are demanding more transparency, efficiency and overall performance from their campaigns.

“With technological advancements being cited as a key opportunity, marketers must choose their partners wisely and be more accountable for how data and AI can optimise programmatic spend both in Open Auctions and via deals. By delivering programmatic ads in a much smarter way, it makes the whole programmatic process more effective and efficient and therefore more sustainable for everyone involved. Buyers get better performance, publishers get more revenue and premium, direct demand, and consumers have a better experience overall. A win-win-win for all.”

Mike Khouri, Founder & CEO, tactical comments: 

“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.”

*The above companies are clients of Bluestripe Communications, owned by Bluestripe Group, the owner of NDA.