Interviews, insight & analysis on digital media & marketing

IPA Bellwether Report Q4 2021: Industry Reaction

UK marketing budgets were revised upward for the third successive quarter in Q4 2021, according to the latest IPA Bellwether Report. However, growth was slower than the previous quarter amid Omicron COVID-19, supply chain, and inflation concerns.

We’ve collected comments from marketing experts across the industry, including Bluestripe Communications (owned by Bluestripe Group, owner of NDA) clients and other industry executives.

Nial Ferguson, Managing Director, UK & Ireland, Sourcepoint

“The IPA Bellwether report shows positive signs for the industry as a whole – marketing budgets are continuing to increase and the economy looks as though it will endure the negative effects of the Omicron wave still felt across the world this winter. But with increasing advertising spend, data privacy must be the number one priority for publishers as scrutiny surrounding data privacy laws look sure to increase in tandem. From non-existent consent messages to non-essential third-party tracking cookies deposited on users’ computers without consent, there are countless examples of malicious cookie practices that will continue to be the target of regulatory enforcement in 2022.

“As a result of this, it’s vital that publishers use this stabilised ad spend to invest in resources that monitor their properties for illegal behaviours to protect them from regulatory and reputational damage. In the shared ecosystem of the open web, publishers need to understand that they are responsible for more than their own behaviour, and must take responsibility for the actions of their partners and third-party vendors on their channels too. 

“Regulation continues to evolve across the globe, and publishers and advertisers alike must understand their digital and ethical responsibilities when it comes to consumer privacy.”

Nick Reid, SVP Managing Director EMEA, DoubleVerify

“Video advertising is evolving rapidly, and the +7.3% growth the Q4 2021 IPA Bellwether Report reveals, reflects video’s ability to engage, inspire and deliver a great consumer experience. With the continued growth of short-form social video platforms and the CTV marketplace continuing to evolve, we are likely to see investment continue as brands expand beyond the more traditional digital video formats. 

“It’s not just the scale of usage which will drive continued growth, but also the developments we are seeing in the market when it comes to measurement and understanding the interaction and engagement video is able to deliver. As a result, we can expect an even greater focus on the likes of attention. Understanding exposure and engagement by looking at metrics from audibility to user interaction can help advertisers identify and then optimise across environments or creative. This will be crucial for advertisers looking to scale their growing investment in video in the year ahead.”

Ben Walmsley, Commercial Director Publishing, News UK

“It is heartening to see that main media marketing is expected to receive strong budgetary support with 2022/23 marketing budgets set for a big boost as businesses plan to step up recovery efforts.

“The growth in measurable, lower-funnel channels in Q4 of 2021 should be no surprise in the face of Omicron-induced uncertainty which may well turn out to have been disproportionate; those that held their nerve with brand campaigns in Q4 will be rewarded. Indeed, the return to bigger ticket brand campaigns in the year ahead is reflective of pent-up demand and brands re-establishing themselves in a post-pandemic world that has left permanent change to consumer habits and consequently the business model of numerous industries. 

“To succeed in the year ahead as advertising adapts to fundamental changes to behaviour, technology and regulatory frameworks, we need to be more consumer-centric than ever before.”

Louise Ainsworth, CEO EMEA, Kantar’s Media division

“It’s heartening to see firms pushing forward with marketing budgets still on track for strong growth.  Brands clearly see opportunities, but they also know there is a real battle to capture spend as they navigate a potent mix of changing consumer behaviour and rising inflation putting pressure on household budgets.  People’s routines will adapt again as the nation heads back to the office from next week.  What old habits will consumers embrace?  What pre-pandemic luxuries have they learnt do without or can’t justify the cost of anymore?  It’s absolutely crucial to understand people’s new essentials and what they’re willing to carve out disposable income for in this time of flux.  The jump in market research spend reflects that.  Timely, relevant data and insight remain vital to planning and executing effective campaigns as we emerge from the grips of Covid.”

Isabella Jenkins, Agency Partner, Permutive

“It’s fantastic to see marketing budgets are increasing as the advertising and tech industries strive to recover following the pandemic. To solidify this industry-wide growth, brands need to ensure they are reaching the right audiences with a privacy-first strategy; developing strategic relationships with premium publishers that hold consented first-party data. This will enable brands to understand their audience’s interests, behaviours and trends, and what they engage with online, all without identifying individuals and compromising consumer privacy. 

“2022 is all about consented first-party data, with brands moving into a testing phase and exploring publisher partners and solutions to find the best performing strategy ahead of the demise of third-party cookies. By partnering with publishers, advertisers can widen their targeting pool via unique audience insights and achieve scale in a privacy-safe way. With this approach, advertisers will get the most out of their campaigns, regardless of the climate.”

Inken Kuhlmann, Marketing Director EMEA, HubSpot

“News of record levels of advertising spend in 2021, and forecasts for considerable growth in 2022, should be cause for celebration amongst marketeers. Understandably this will be met with cautious optimism in light of the continued fluctuations in the UK economy, but the figures are a sign that the industry is bouncing back.

“Much of the additional spend we’re seeing from brands is being channelled into content creation; and we’re seeing more companies, in particular in the SaaS space, transforming into powerhouse media companies in their own right by investing massively in content creation to better serve and grow their audience and communities. Essentially, scale-ups and enterprises are feeling the fierce competition for attention to stay relevant and top of mind with their audiences. They’re clearly willing to spend big on their own marketing to supercharge growth and win the battle – whether through blogs, certifications, newsletter subscriptions or podcasts.

“As restrictions are fully lifted in the UK for the first time in two years, it will be interesting to watch this investment in content creation grow and how it transforms customer experience and engagement for the brands that get it right.”

Matt Nash, Managing Director, Scibids

“Entering 2022, we’ve seen huge growth as a business globally. Our partners have expressed confidence in the market bouncing back from the negative effects of the pandemic and the 6.1% increase in marketing budget seen in the latest IPA Bellwether report aligned with experiences on the ground.

“The last two years have been particularly interesting for paid digital marketing. The pandemic created a rapid change in consumer behaviour, leaving marketers to rely on accountable and addressable marketing channels. Online advertising businesses want assurances that their investments are truly measurable with an understandable impact and accountable spend. Subsequently, many are moving away from using clicks or visits as a measure of success, shifting towards optimised, deduplicated conversions that are measurable in external ad servers, as well as focusing on maximal return on ad spend (ROAS).

“In 2022, marketing spend must measure effectiveness over efficiency. By strategizing customised campaigns with a strong focus on consumer privacy, businesses will see a market resurgence and increased consumer confidence. There’s good reason to be positive moving forward and customised, results-focused marketing strategies that leverage sophisticated AI to automate and lower the cost burden against deploying significant advertising investments will push this upwards industry trend.

Richard Robinson, Managing Director, Econsultancy

“The optimism and confidence in marketing continues to grow for another quarter, with UK PLC showing a continued determination to press ahead with customer-plans that fuel growth. The need to define excellence in digital, marketing and creativity has never been more pressing – and the need to train, hire and retain the best talent is fast becoming the pivotal battleground in terms of commercially viable ROI as we look into 2022. Brands and agencies alike must get ahead of staff and skills shortages by learning their way out of the crisis & matching their intent with the optimum partnerships for profitable growth.”

Dominic Woolfe, CEO, Azerion UK

“The latest IPA Bellwether report shows marketing budgets are on an upward trajectory, bringing increased positivity to the industry after what has been a turbulent few years. With preliminary data suggesting businesses are going to step up their recovery efforts following the Covid-19 pandemic, it’s going to create a cluttered market with brands all competing for attention. Successful brands will be those that adapt to the changing consumer behaviours of the time and prioritise creativity and campaign effectiveness to drive brand performance.

“As the report suggests, whilst new variants alongside supply chain issues and heightened inflation may still continue to cause some uncertainty, brands will need to ensure they maintain a consistent level of communication, which is creative and engaging to cut through the clutter.”

Sarah Baumann, MD, VaynerMedia London

“We’ve all had to embrace a new level of volatility in the market since the pandemic – and this Bellwether confirms that 2022 will continue to throw new challenges at brands and agencies – from new Covid variants, supply chain disruption and now inflation creeping into many markets.

“So, it’s great in spite of that, to see another quarter of growth and a net balance of respondents expecting main media advertising to increase over the next year. It’s also no surprise that digital growth and share of budget continues to outpace other channels as the best way to create relevance and navigate the ever-changing consumer landscape.  Yet we would be unwise to assume this growth in main media advertising is guaranteed – the key is to stay focused on consumer-centric, culturally relevant work where we can get the most underpriced attention – and to be relentlessly focused on business outcomes.”

Ryan Afshar, Head of Publishers UK, LiveRamp

“This sustained expansion in marketing budgets, despite Covid roadblocks towards the end of Q4, shows that the industry is continuing to recover from the shockwaves of 2020.

“As online advertising enjoys a 4.5% uplift compared with Q3, publishers are realising that the value of their first-party data is strengthening which is now putting them on a level playing field with the walled gardens. As such, publishers will prioritise people-based marketing strategies that simultaneously help drive authentications with consumers. 

“Publishers should therefore continue to test, and refine strategies that generate new authentications, such as email subscriptions, newsletters, content walls and/or premium services. This will then allow publishers and marketers to build omnichannel views of consumers across online and offline channels, unlocking better ways to reach and engage these consumers.

“In turn, this year, we expect to see more consumers authenticating, in order to control their preferences and their data, in a win-win that helps publishers maintain direct relationships with them.” 

Phil Duffield, VP UK, The Trade Desk

“It’s extremely encouraging to see marketing budgets continue to increase as the industry impressively rises and evolves with the world around them. I have the utmost faith this will continue throughout 2022 and beyond.

“Never has it been more paramount for brands to understand and react to constantly evolving consumer behaviour. This is the beauty of programmatic – it enables brands to optimise campaigns in real-time and stay on their toes, in a way traditional marketing wasn’t built for. 

“CTV has been one of The Trade Desk’s growth engines in recent years, as more major advertisers look to apply data to their massive TV campaigns for the first time, so I’m not surprised to see video as the top performer of Q4. However, it’s vital that marketers continue to insure against unexpected fluctuations in consumer behaviour. And that is through a fully optimised and flexible omnichannel strategy, that will enable brands to reach their customers with a consistent, unified message across all channels.

“It’s clear that marketers who utilise the right methods and continue to diversely invest their ad spend will be best placed to thrive and reap the subsequent rewards.”

Łukasz Abgarowicz, VP of Agencies, RTB House

“Despite ad spend growth forecast to lower slightly in 2022, the latest IPA Bellwether Report shows that the advertising industry is making an excellent overall recovery after the pandemic. It’s fantastic to see that video spend has increased by 7.3% which presents a myriad of opportunities for brands and advertisers in the new year. This means that competitive pressure in trying to reach consumers will increase. Effective targeting and unique creatives will become crucial.  

“Looking ahead, we can expect to see marketers utilising new partners and platforms which can leverage Deep Learning technology effectively, improving the cost per completed view while reaching the right audience at the right time, in the right context. With the deprecation of third-party cookies getting closer, marketers will be looking for solutions that can achieve better visibility within the same budget while being built to last in the new digital landscape.”

Matt White, VP EMEA, Quantcast

“Omicron and the introduction of ‘Plan B’ wasn’t enough to slow marketing spend in Q4. The upcoming relaxation of restrictions should ensure that the strong upward trajectory continues well into 2022, with firms seizing the opportunity to drive sales by increasing ad spend. 

“One thing we learned last year was to expect the unexpected; we also, however, learned that you can never be too prepared. For digital companies that have accrued customers and first-party data during the pandemic, now is the time to be thinking about how to best activate this and continue the growth momentum.

“Don’t forget that the countdown to Google’s deprecation of the third-party cookie is on. This impending shift has been greeted with apprehension by many. But, with change comes an opportunity to invest in multiple approaches so as to better understand audiences, value advertising and measure results. Now is the time to steal a march on competitors and test, test and test. While the pandemic remains a huge factor shaping the industry, the beginning of a new year marks an opportunity to look forward, not back. Brands that do this will be the ones who reap the benefits”

Justin Taylor, UK MD, Teads

“It’s been a frantic start to 2022, with news cycles and business plans alike continuing to ramp up. What is encouraging to see is that, despite this pandemic absolutely not being over, the start of 2022 feels significantly different to this time last year and even to Q4 2021. And whilst COVID impacts, such as supply chain issues, also are by no means behind us, there does seem to be light at the end of the tunnel. There is a buoyancy and optimism for 2022 that we have seen across our client, agency and publisher partners as the UK sets out to chart a new path out of the economic troubles of the past 2 years.

“As leaders in digital media, it’s imperative that we enter our new world differently to how we entered it. Our relationship with consumers has irreversibly changed, but not necessarily for the worse. Platforms and publishers that deliver respectful user experiences and sustainable data practices will create high-attention environments and a loyal customer base. All of which creates a responsible, long term, media ecosystem.

“Looking ahead, it’s encouraging to see the IPA Bellwether report show that marketing budgets are set to increase and that businesses remain optimistic about the opportunities for growth in 2022.”

Josie Klafkowska, Global Marketing Director, Wunderman Thompson Technology

“It’s no surprise to see online advertising grow by 4.5% as the year closed with renewed Covid-19 restrictions and shaky consumer confidence. And while more customers are turning to digital, channel proliferation is continually creating new opportunities for brands to show up exactly where consumers want to find them with contextually relevant and personalised messaging. This is what customers are demanding.

“It’s more important than ever to prove effectiveness across each and every channel and to act on that data. Understanding what consumers are really responding to will ultimately define success. To stay ahead of the competition in 2022, brands need to stay agile. Responding quickly to changing circumstances and customer data can ensure that you stay ahead of the competition.”

Fergus Dyer-Smith, Founder & CEO, Wooshii

“With main media advertising increasing by 3.1% in Q4, it should come as no surprise that video has been the main driver growing by 7.3%

“Whilst digital-first drove us through the late part of the last decade, a number of factors, including the pandemic, rising channels such as TikTok and the dominance of YouTube has seen businesses now view video as a primary, not a secondly tactic. And I believe that we will see ‘video first’ becoming the buzzword of 2022. 

“However, to maximise this medium’s full potential businesses will need to develop visibility and connectivity across the full video lifecycle. Production teams will need to find more scalable and flexible production solutions, alongside finding more informed ways to develop creative.

“Until now, video has always been somewhat under-measured, made complicated by channels having different definitions for key performance indicators. Therefore, to fully reap the rewards of this medium in 2022, it will be key to work with partners that can manage and measure the entire lifecycle of their video operations.” 

Claire Burgess, Director of Paid Media, Incubeta

“The supply chain crisis, and the Omicron variant means that the tentative optimism of marketers is reassuring as 45.7% of IPA Bellwether respondents expect their budgets to grow in 2022.

“2022 will be the year of ecommerce as consumers have become accustomed to its convenience over the last two years. Marketers must keep in mind how tricky it is to achieve the cross-channel attribution and omnichannel optimisation that online shopping demands. In the new ecommerce era, online and offline shoppers can no longer be considered a separate entity, as the user journey needs to be understood across the board. To take this further, over the next year, we’re likely to see more “phygital” ad experiences which harness augmented reality, helping consumers to visualise a product in their daily lives.”

“The future of retail is an incredibly exciting place to be, and it’s great to see these budgets stabilising and increasing. The influx of investment will allow advertisers and brands to reach their full potential for both their online and offline customers.” 

Richard Williams, Commercial Director, A Million Ads

“While it’s unfortunate to see that the forecast for ad spend growth has slowed down since Q3, it’s brilliant to see that total marketing budgets are continuing to expand, with radio expected to see strong budgetary support in 2022.”

“Already we have seen that audio is growing in 2022 and we expect this to continue with changing consumer behaviour. We have seen audio content rise in popularity with many consumers, but particularly Generation Z. And as audio is such an intimate channel, brands need to find creative ways to connect with their audiences on a personal level.” 

“Dynamic audio, for example, allows brands to tap into contextual data points such as time of day, weather or the listener’s personal preferences. For instance, during holidays such as Valentine’s Day a brand might want to drive people to their stores by suggesting gift ideas, whereas at Easter a supermarket might want to promote chocolate for an Easter Egg hunt. This helps to increase relevancy, thus avoiding ad fatigue.

“Advertisers now have a plethora of opportunities to take advantage of audio advertising. In the year ahead, it’s vital that advertisers focus on bridging the gap between data and creativity to put the consumer at the heart of their campaigns.”

Gill Huber, Managing Partner, Oystercatchers

“This latest Bellwether Report represents what most of us working in the business have sensed. Marketing budgets are growing but the broader business landscape is still volatile as the pandemic and other economic factors – such as inflation – make themselves felt. But there is much room for optimism as brands look to meet customers’ needs and respond to changed behaviours with creative solutions across multiple platforms. This calls for strong partnerships with their marketing services agencies – so that brands are working with the best creative talent to help build business performance, make their advertising exciting and effective, reach new audiences and ensure they have robust strategies in place to meet future challenges.”

Justine O’Neill, Senior Director, Analytic Partners

The latest report gives the industry real reason for continued optimism, with an increase in marketing budgets in the coming year, as everyone has adapted to the changed business conditions. Omicron has been a slight setback for quicker recovery so it makes sense that only a few budgets such as direct marketing, video and online advertising have seen budget increases in Q4 and across the year.

But there are still challenges; as well as the impact of supply chain disruption on business costs, marketers need to consider media inflation too, especially now in early 2022. TV will see the largest increase in costs, with inflation of 6.0% according to WARC’s forecast, followed by Online Video at 4.1%.  Leveraging the evergreen marketing truths of using synergies, layering channels for effectiveness and an omnichannel strategy will help brands mitigate inflation while still driving reach. Those companies with a larger brand or product portfolio can also use the halo effect, when 45% of their flagship advertising’s impact will halo onto the rest of the portfolio.”

Patrick Reid, Group CEO, Imagination

“The emergence of the Omicron variant introduced a further element of uncertainty in this quarter, which along with supply-chain disruption unsurprisingly impacted on activity.  However, the future looks positive with 38% of Bellwether respondents expecting to increase their budgets in events and experiences with marketing executives anticipating a much stronger 2022/23 – something we’ve witnessed across our global client portfolio. We strongly believe as economies recover there will be increasing opportunities to create meaningful experiences that provide ROI and increase the lifetime value of customers – be that virtual, hybrid or in person.”

Catherine Aithal, Strategy Partner, The Specialist Works

“As a business focusing on dynamic growth clients, this report bears out much of what we are seeing among our clients. Healthy marketing budgets are returning, and marketing departments are growing. There appears to be a cautious optimism though, with the fear of inflation starting to bite, especially among hard working families and we are seeing some clients affected by rising costs of goods. We are also seeing the beginnings of post traumatic growth with lots of new businesses optimistically entering the UK market. These new and innovative products and services will have an impact on some of the more traditional categories. And the trend towards direct to consumer and local over global will continue, as brands and innovation develop to respond to the increasing consumer desires for authenticity, sustainability and independence.”

Rik Moore, Head of Insight Strategy and Planning, The Kite Factory

“The Q4 2021 IPA Bellwether gives continued reason for optimism, which is incredibly welcome, but it also serves a stark reminder of the impact of both the ongoing pandemic and the impact of the uncertainty and problems it creates.

“As an industry, we need to consider how best to embrace and utilise the former, whilst remaining agile and adaptable in how we navigate the latter.

“On the plus side, it fuels optimism of a buoyant 2022 as we learn to co-exist with Covid without severe restrictions and return to a semblance of normality. This is reflected in 45.7% of Bellwether panellists being optimistic of budget growth, with only 11.2% expecting spending cuts. The opportunities panellists highlight point to the post-pandemic bounce back, further development of the digital behaviours that have been embraced through the pandemic, and the increasing acceleration of interest in the green economy. These are all areas for CMOs and planners to reflect on how they can embrace these topics and bring them into their marketing.

“Amongst the threats, the ongoing disruption caused by Covid looms large. Q4 showed the danger of the threat of uncertainty, in terms of the spread Omicron variant and consumer fear of how it could impact Christmas. Nowhere was this clearer than the Hospitality sector. Whilst in the run-up to December, Hospitality industry sales had returned to 98% of pre-pandemic levels, the rapid spread of the Omicron variant and government guidance to work from home are said to have lost the sector up to £3 billion.

“In the face of this, the versatility and adaptability shown in lockdown needs to become part of the way businesses plan their strategies, creating contingencies to help mitigate further disruption.”

Richard Exon, Founder, Joint

“In October last year the message from the Bellwether report was ‘Marketing budgets up, although nerves remain’ and so today’s news feels horribly familiar. The 2022 headline for agencies could be ‘There’s lots to play for, but take nothing for granted’. And in one respect things are substantially different this year.

“Because most big companies, our clients, have learnt a huge amount over the last two years about how to ride covid disruption in ways that allow them to grow. Nobody is saying the pandemic is over, but it’s pressures and challenges are increasingly familiar. cClients and agencies alike have developed a higher degree of flexibility and responsiveness as each new variant has come and, by and large, gone.

“So too have our audiences, the consumers who have shown amazing resilience and whose spending may have switched categories and channels in some cases but has stayed constant overall. What we don’t yet know is the impact of the ‘cost of living’ crisis as higher taxes and inflation take hold. But it’s a fair bet it will make 2022 a ferociously competitive year for brands of all sizes, putting an absolute premium on smart marketing and advertising.”

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