Interviews, insight & analysis on digital media & marketing

The IPA Bellwether Report: Industry Reaction

By Lydia Oakes, Managing Director of Bluestripe Communications.

At first glance, the report does not make for pleasant reading. The ongoing effects of Covid-19 mean cuts in spending across all categories and the much hoped for green-shoots aren’t visible just yet. Also with the chances of a No Deal Brexit seemingly increasing, it’s hard to find much in the way of good news in the economic outlook. We can only hope the Government sees sense and strives to come to an agreement with the European Union.

That being said, there does seem to be more positive sentiment around 2021. If we can get an increase in consumer spending then we’ll see advertising spend increase. Indeed the IPA is forecasting an increase of 11% and that would be hugely welcome. It will be interesting to see if our Bluestripe Sentiment Tracker echos this when the results come out in December.

Also welcome were the comments from Paul Bainsfair, Director of the IPA who pointed out that evidence proves that those who can invest in marketing during the downturn will reap rewards in both the short and longer-term. This is something that not only applies to consumer advertising but it’s something we impress on our B2B clients.

I’ve gathered some industry comment from both Bluestripe clients and industry friends.

Emily Brewer, Head of Publishing, Teads, comments:

“Despite the negative sentiment of the report, we are remaining positive on prospects for Q4 2020 and growth leading into 2021. As we have seen, brand priorities have changed from Q2 to Q3 with a significant increase in uptake for performance over brand advertising.

“As consumers rely more heavily on online for news, brands are looking to take advantage of increased readership and have moved to premium publishers, where they can guarantee a responsible advertising approach. Furthermore, the move for publishers to embrace or accept lower funnel offerings has allowed them to maintain revenues with top brands, which in turn has helped them to navigate Q3, and look to compete at a greater level with social platforms.”

Max Flajsner, Director of Innovation, Incubeta comments:  

“This report comes as no surprise, as advertisers were hit hard by the effects of localised lockdowns, as well as ongoing Covid-19 restrictions and the prospect of dwindling job protection schemes. Although it can be difficult to see the light at the end of the tunnel, it is incredibly positive to see the IPA Bellwether forecast of a robust recovery in 2021 as the market improves.

“Brands that will succeed will be those who can adapt quickly. Those who can find a way to stay in the public eye, respond to changing consumer behaviour and remain relevant and positive throughout harder times will be at a distinct advantage.

“However, brands will need further support from tech platforms, agencies and media owners in order to adapt to new and flexible ways of working. Minimum terms, minimum spends and inflexible retainer models will need reviewing. Performance-based models in which partners are willing to take shared ownership of risk will be required to help advertisers stay active in the market.”

Ben Barokas, Sourcepoint co-founder and CEO comments:

“The findings accurately reflect the difficult and turbulent time that the entire world is experiencing in the midst of Covid-19, and we’re not out of the woods yet. As the industry battles against not only the pandemic, but major ecosystem challenges as a result of the loss of third-party cookies and privacy, consent and digital citizenship will continue to rise in importance for both advertisers, publishers and other ecosystem participants..

“Advertisers should be investing their existing budget into high-quality compliant inventory, where there is explicit consent from consumers. With consumer ad spend declining, negating any reputational or legal risk will become vital to brands to remain in favour.  At the same time, publishers need to diversify how they generate revenue streams beyond advertising. Although website traffic is skyrocketing due to restricted movements and isolation, publisher revenue has continued to contract. So, it is likely we will see a trend for publishers to begin experimenting with ‘consent or subscribe’ experiences to help them survive, as ad budgets continue to shrink. 

“ The digital ad industry is one of the most resilient and adaptable ecosystems to exist today and I know we will see a robust return in 2021 as the latest IPA Bellwether report predicts.”

Sanjay Nazerali, Global Managing Director & Chief Strategist at Dentsu X comments:

“There will be no “recovery” as such, instead we will see a metamorphosis within the industry. The changes in consumer behaviour we are witnessing are movements, not trends, which have emerged and become cemented during the pandemic.  Many people have discovered a “return to self”, with an inward focus on their families and communities.  As further restrictions are put in place it will be businesses which have bucked the trend and reinvented themselves, both online and off, that will succeed during these adverse times. This new attitude won’t be easily reversed, even when advertising levels grow and stabilise. Instead, there will have to be new ways of operating to reach and interact with consumers.  

“So, while we will certainly see a return to growth in marketing spend come 2021, I believe the nature of how marketing is conducted will have to drastically change.” 

Justine O’Neill, Director at Analytic Partners comments

Brands need to remember that they’ve always had to reinvent themselves and their marketing strategies; it’s just much faster this year. Q3’s Bellwether report may be showing continued decline in adspend, but the brands who have maintained marketing support have actually been able to further benefit from reduced presence of competitors in market and have also been able to avail better rates for more premium spots.

Brands must constantly re-balance their media mix to include more product, performance or promotional marketing in tune with emerging demands and trends. Keeping your strategy omnichannel is very important. Just because your customers are buying online does not mean that is where they are consuming their media.

Brands who relied heavily on Christmas campaigns and expenditure previously may need to adapt even quicker this year as many consumers bring forward their Christmas spending, esp. with new lockdowns taking place and increased time to research and shop.

 Vihan Sharma, Managing Director Europe, LiveRamp Comments

These are challenging times for brands and publishers; not just in relation to Covid, but also the impending demise of third-party cookies and increasing restrictions being handed down from device makers and regulators. These headwinds have made measurability, accountability and addressability increasingly difficult, at a time when it has never been so paramount that every advertising penny counts. 

Although the outlook appears gloomy, it’s actually opened up a major opportunity for brands and publishers to overhaul their strategies. And providing they take action now, it’s very possible to ensure business sustainability in spite of the obstacles. More than ever, consumers need to be wowed by brands and publishers by receiving a tailored experience that speaks to their needs. Third-party cookies, for example, might be good for targeting at scale, but they don’t inspire trust, which is precisely why they are being deprecated. 

Innovation is imperative for brands and publishers alike; new engagement models need to be underpinned by a transparent infrastructure based on authentications. Brands can reach high-value audiences at scale when using a solution that connects authentications to people-based identifiers without relying on cookies. Consumer fitness company, Fitbit, for example, saw increased media efficiency and return on ad spend double when transacting on a people-based ID instead of third-party cookies. 

Covid may have pushed the marketing industry into uncertain territory, but it’s also provided an accelerant to meaningful change by creating an urgent opportunity for marketers to explore fresh engagement strategies that offer improved targeting and a greater value exchange – all while protecting consumer privacy. 

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