Positive news has been few and far between over the last 18 months. But according to the latest IPA Bellwether Report, marketers (and publishers) have a lot to look forward to.
The Q3 report, released yesterday, found that UK marketing budgets have grown at the strongest rate in four years, chiefly because of looser lockdown restrictions, pent-up consumer demand, and a stronger economic outlook.
According to the report, UK GDP is expected to have recouped on pandemic-related losses by mid-2022, and marketers are poised to take advantage, with ad spend set to grow sharply next year.
At a glance findings:
- Total marketing budgets increase at strongest rate since Q2 2017
- Company-level financial prospects at their most optimistic since Q1 2015
- Adspend set to grow sharply in 2021 and 2022
Growing and learning
The positivity of the report has been celebrated by many as proof of how versatile and resilient the marketing industry is. Filippo Gramigna, CEO of Audiencerate, said:
“For marketing budget growth to be at its highest since 2017 is a great win, and concrete proof that ours is an industry that will continue to innovate in response to challenges thrown our way. Looking ahead though, what works now may not work this time next year, as the digital landscape and global situations continue to evolve.”
Learn from the lessons of the past 18 months, and take stock of what is happening in the industry; for digital companies that have accrued customers and data during the pandemic months, now is the time to be thinking about how to best activate this and continue on a growth trajectory.Filippo Gramigna, CEO of Audiencerate
Dark clouds ahead?
It’s worth noting there are some dark clouds still on the horizon. Possible additional lockdowns, supply chain problems and ongoing Brexit complexities could all knock progress off course. Jacopo Gerini, Chief Commercial Officer at Clickio, suggests that publishers should be looking to maximise current positivity: “Now is the time for publishers to look towards monetisation solutions to capitalise on the increase in advertising investment we’ve seen throughout Q3. By using technology to manage ad placements dynamically, they can ensure they make the most of their advertising inventory to maximise revenue while reducing their workload.”
Moving forward it will also be important for publishers to look beyond monetisation, to technologies that can improve site performance and the user experience.Jacopo Gerini, Chief Commercial Officer at Clickio
Sivan Tafla, Co-founder and CEO of Total Media Solutions also believes marketers should not be resting on their laurels, and that proactive action is needed now more than ever: “The report should be positive reading for the industry, with digital advertising up 10.6% in Q3 2021, and a +11% increase between Q1 and Q2 2021. However, this continued investment in digital does not guarantee high returns for advertisers.”
It is up to publishers to invest in areas like brand safety and compliance with Google policies, such as its recent page experience update Core Web Vitals, to ensure a smooth and secure media buying process.Sivan Tafla, Co-founder and CEO of Total Media Solutions
Other reaction from across the industry:
- Nick Reid, Regional VP of Northern Europe, DoubleVerify: “With video being the main driver in main media, up +12.6% from +4.2%, its crucial advertisers take this moment to ensure they put themselves in the best position to measure video’s attention by gaining timely, impression-level insights to optimise their campaign performance – from looking at the impact of an ad’s presentation to key dimensions of consumer engagement. With our recent Global Insights Report revealing just 15% of video ads are both audible and in-view on completion, advertisers are just scratching the surface.”
- Justin Taylor, UK MD, Teads: “There was uncertainty at the start of 2021 as to whether new consumer habits would stick, but with Covid restrictions lifting, new research from Teads shows more than 2 in 5 consumers are intending to or will be increasing their online shopping levels….(however) there are clear headwinds going into Q4 with supply issues potentially impacting Christmas. But we’re seeing brands are responding proactively to these challenges and we’re bullish that 2021 will finish on a high.”
- Karin Seymour, Client Strategy Director, News UK: “The latest IPA Bellwether report shows the impressive strides our industry is making as we move through Q4. Furthermore, it’s heartening to see that brands are investing more in main media ‘big ticket’ campaigns and with ad spend set to increase sharply in 2022, this will no doubt increase.”
“The past 18 months has shown us how consumers respond positively to human interest stories. So in a post pandemic era, brands should be looking at authentic and exciting ways to emotionally engage with their audiences, on a human level.”Karin Seymour, Client Strategy Director, News UK
- Nial Ferguson, Managing Director, UK & Ireland, Sourcepoint: “Despite this economic rebound, ongoing changes to global privacy regulations are having an increasingly significant impact on brands’ marketing investment. It’s clear that brands and advertisers who overlook their privacy standards and those of the partners they work with and invest in, risk reputational damage and precarious customer loyalty. Advertisers who seek competitive advantage must use this period of growth to embrace a meaningful pivot to privacy, where digital responsibility and data ethics deliver both performance and compliance benefits.”
- Teodora Gavrilut, COO at Creatopy: “Ever the realist, I do urge the industry to err on side of caution. We’re walking into a context that’s continually changing- and it’s not just the knock on effect of Brexit on supply chains or the threat of winter. Adland must also navigate a world where shoppers’ behavior continues to be in flux…If the pandemic has taught us anything, it’s how easy consumer habits can shift. That’s why understanding consumer emotions to know how, when and where to execute campaigns is going to be essential to long-term brand success.”
- Elizabeth Brennan, Head of Advertiser Strategy, Permutive: “As a priority, advertisers need to test publishers’ first-party data this year as part of an established strategy to shift away from a reliance on third-party data, which is deprecating. By doing this, advertisers will have a sustainable and privacy-safe base to carry out business and plan marketing activity on. What’s more, with publishers’ first-party data, advertisers can understand their audiences’ shopping habits, interests, and trends without directly identifying the individual, which protects user privacy. These unique audience insights enable brands to plan and create effective and personalised campaigns at scale.”
- Matt White, VP EMEA, Quantcast: “Despite this growth providing much-needed rejuvenation to the industry, it failed to reach the +17.4% initially forecasted for the 2021/22 financial year. The risk of collapsing consumer confidence, triggered by inflation and rising interest rates, and the potential reintroduction of Covid restrictions could mean that the end of the year looks very different to what we had imagined three months ago. The hope is that the advertising industry can play its part in maintaining consumer confidence and spending. If restrictions do kick in, digital advertising will once again take centre stage.”