Interviews, insight & analysis on digital media & marketing

IPA Bellwether Report Q4 2022: Industry Reaction

UK marketing budgets grew for the seventh consecutive quarter in the face of a technical recession, according to the latest IAB Bellwether Report.

We’ve gathered reactions to the report from marketing experts* from across the industry. Here’s what they have to say about the research.

Nick Reid, SVP & Managing Director EMEA, DoubleVerify

“As we close out 2022 with another quarter of growth, we look toward 2023 cognisant of both the economic uncertainty and the challenges around the cost of living for many in the UK. Brands who are focused on riding through this uncertainty, will do so conscious not only of wanting to ensure return of investment and limiting media wastage, but also making sure their ads are delivered in the right contextual environments, with comms that reflect the day-to-day experience of their audiences. This focus on suitability from an ad environment perspective, is equally as important as the way these campaigns are measured and optimised and with the increase of digital video spend, attention will be at the forefront of this in 2023.”

Matt Nash, UK Managing Director, Scibids

“It is clear from the resilient growth of marketing budgets, as indicated by the IPA’s latest Bellwether report, that brands have regained confidence in the strategic value of increasing their ad spend during times of economic uncertainty. Alongside this, there will be increased scrutiny from brands to ensure that budgets are delivering on the outcomes that matter to them, especially in digital channels, so they need to look for partners who can help maximise performance and efficiency.

“We can expect digital marketers to pay close attention to the ad stack, leveraging solutions which analyse media and sales performance, and optimise media plans toward business-specific objectives. This includes the reduction of ad waste.

“Indeed, as the Bellwether report also highlighted, incorporating sustainable practices is high on the agenda for marketers. To this end, brands should choose partners whose technology can help make first-party and measurement data actionable in the buying process and allocate ad spend in real time, selecting fewer but higher quality ad impressions. This will go a long way in reducing the carbon footprint of these campaigns while maintaining performance.”

Matt White, VP EMEA, Quantcast

“It’s promising that once again advertising spend has increased over the quarter, despite the current economic landscape of the UK. A driving force behind this will no doubt have been the travel industry. With pandemic restrictions here completely removed, people have been close to desperate to get away following two years without being able to enjoy the sun. Businesses in the sector have therefore continued to invest heavily in ad spend to ensure they’re enjoying a sizable slice of the pie.

“Businesses have also built up a level of robustness following 2.5 years of permacrisis and very few companies will now be going into this year assuming there won’t be obstacles to overcome. The past two years has no doubt made organisations more resilient and understand that they can’t afford to completely switch off advertising spend, as it’s increasingly difficult to return to peak levels from a standing start if competitors have been active throughout testing times.

“It’s difficult to say with any certainty what the future of the industry will hold, especially in the current economic landscape, but as the recession takes hold, it’s likely ad budgets will be impacted. However, one area that will continue to grow throughout the UK is the CTV market. This year will see increased monetisation of inventory and ad space as CTV leaders such as Netflix and Disney+ continue to expand and new players enter the market. This will increase the availability of direct-to-consumer advertising, which in turn opens up a whole new marketplace which advertisers can engage with while there’s a low barrier to entry.

“With younger generations tuning out of linear TV in droves, CTV will become a must have for marketers. Those who play the waiting game will miss the opportunity to connect with audiences before their competitors do.”

Luke Fenney, VP Addressability, Europe, LiveRamp

“In the face of worsening economic conditions in the UK, the buoyant growth of marketing budgets amongst one in five of those surveyed for IPA’s Bellwether report is a reason to be cheerful. It’s clear that many brands have learnt the lesson of the past few years that investing in marketing is essential for navigating a crisis. The challenge now is to ensure that these media plans are running as efficiently as possible.

“As the report highlights, online channels are taking up a large and growing proportion of marketing budget allocation (a 6.3% increase on Q3). Even in this era of decreasing cookies and mobile identifiers, for which our own research indicates 73% of UK marketers don’t feel prepared, we expect digital marketing spend to continue to rise in a climate of increased demand for fully accountable media. Privacy-first people-based marketing solutions, data clean rooms and the expected growth of connected commerce media options, give brands more scope to marry their ad spend with addressable targeting, accountable and measurable results.

“Brands that leverage ‘people-based’ activation and measurement solutions, which utilise privacy-compliant, first-party data to provide insight across all omnichannel marketing activities, will be those who can stay connected to their high value audiences and will see their market share increase.”

Camille Flores-Kilfoyle, Head of Marketing EMEA, Reputation 

“The end of last year’s results are, somewhat surprisingly, promising and there is a positive outlook for this quarter in 2023. 

“The current financial pressures felt by all businesses due to the recession have added to the already existing, post covid, marketing pressures. This, coupled with a decline in consumer confidence, means that from a customer experience point of view, it is vital that marketers not only ensure they are spending budgets wisely, but also understand their consumers’ priorities and changing needs. 

“This is where optimisation is key. Businesses should tighten up best practices, ensure the right target consumer is at the core of all marketing campaigns, and optimise the efficiency of the campaign process.”

Anna Forbes, UK Country Manager, Azerion

“It’s a story as old as time. In a period of economic decline, advertisers must stay firm and continue investing in their marketing strategies. The latest IPA Bellwether shows this in true effect with firms expanding their marketing budgets to support brands through the H1 downturn.

“In advertising, value may have previously meant choosing a cheaper alternative. However, in the current economic landscape it’s about going above and beyond the transactional media investment. Therefore, advertisers must think about value, not in terms of financial savings, but in terms of delivering the best possible advertising to consumers, with minimal wastage. To maximise marketing budgets in 2023, the industry must harness innovative approaches to audience targeting, including eye-catching creative which is all independently verified and measured.”

Jacque Chadwick, Commercial Trading Director, Ozone

“Given the double impact of the ‘Golden Quarter’ and the FIFA World Cup in the last three months of 2022, perhaps a 2.1% net growth in overall marketing budgets was to be expected? However, in the context of it being the seventh consecutive period of total marketing growth, there are definitely reasons to be optimistic. With recession, inflation, cost of living and the conflict in Ukraine never far from the headlines, it’s quite easy to focus on the negatives. From an Ozone perspective, the strong growth in video (+13.7%) and other online (+9.3%) is reflective of what we have seen across the quarter.

“Looking forward, we feel a definite sense of ‘cautious optimism’ – the phrase that summed up coming out of the pandemic, feels even more appropriate now. We see brands retaining their focus on not losing ground to competitors, particularly after the past few years of turmoil. At times of budgetary scrutiny, we see greater marketer emphasis placed on delivering real business results, and increasingly that is through a lens of doing it better – be it from diversity of audience reach through to easier to activate campaigns – and doing it more sustainably.”

Mateusz Jędrocha, Head of Upper Funnel Solutions Development, RTB House

“It is encouraging to hear that companies are making efforts to adapt to the upcoming economic downturn, expanding marketing budgets to support growth. Higher budgets, particularly for video, which increased 13.7%, are a great sign that brands are aware that they must spend smarter, rather than cutting the power off of their business engine.

“Ultimately, however, these findings demonstrate the importance of implementing effective and efficient marketing strategies, especially in the current climate. And by establishing flexible partnerships, using the right tools, and state-of-the-art technology, businesses will be able to make a real impact. To succeed in the months ahead, it’s never been more important to take a proactive approach and invest in the right tools and resources.”

Julie Lock, Regional Leader, UK Marketing, HubSpot

“As economic pressure increases, so does the opportunity for impactful marketing strategies. Marketers should first identify where their target businesses see the greatest potential for growth and then focus on strengthening their brand presence in those areas. According to our annual Top Marketing Trends report, 90% of marketers who use short-form video will continue to invest in it next year, and one in five marketers plan to use it for the first time in 2023.

“Additionally, it’s crucial to align marketing and sales efforts to ensure potential leads are not missed. While marketing generates interest and attracts customers, it’s the customer experience that ultimately determines a sale. Without proper alignment between sales and marketing teams, efforts can be ineffective. By ensuring both teams are working towards the same goals and using the same insights, businesses can convert leads into revenue.”

Paul Coggins, CEO and Co-Founder, Adludio

“Following a difficult quarter, it is encouraging to see in the latest Bellwether report that marketing budgets have increased. This is crucial if marketers are to maintain their branding activity through a period of reduced consumer spending.

“If these budgets are to be spent effectively however, they need to be directed at maximising the attention that ad campaigns receive. This is particularly important on digital channels, where the battle of the brands for user attention is raging, and where smart brands are leveraging available technologies to gain a strategic edge. Indeed, the report highlighted this in the noted interest amongst advertisers in integrating data-driven analytics.

“Technological advancements, in Artificial Intelligence (AI) and computing horsepower especially, present massive advantages for marketers looking to optimise their ads for user attention. Brands that direct their budgets at these techniques, maximising the attention their ads receive now, will be those that will stand out once the economic outlook becomes more optimistic.

Further reaction can be found here.

*Includes Bluestripe Communications (owned by Bluestripe Group, owner of NDA) clients.