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2022/2023 will see larger marketing budgets as companies continue to recover
If the Q3 2021 IPA Bellwether report optimistically predicted an impressive bounce back for marketers, the latest report is a tempering of those expectations going forward into 2022.
With the Omnicron variant sweeping through the UK late last year and decimating workforces, inflation rising and supply chain problems still affecting commerce, it’s unsurprising that marketers are proceeding with more caution, but there are still green shoots.
Ad spend growth is set to continue, albeit at a lesser pace than previously expected, while the report also predicts that 2022/2023 will see larger marketing budgets as companies continue to recover.
But with the loss of third-party identifiers still looming over publishers and recent data leaks causing a loss of trust in tech giants, how can publishers take advantage of the continued increase in ad budgets? We asked a dozen industry executives to give us their views on the latest IPA Bellwether to answer this question, and more.
- Nick Flood, Global Ad Product & Revenue Operations Director, Future plc comments: “Marketers striving to deliver tailored and effective campaigns this year – and beyond – should be taking note of publishers’ ability to collect rich first-party data. Their sophisticated offerings go beyond broad vertical-based targeting to segment audiences in line with complex interests and behavioural signals, alongside actual purchase intent. This means ads and affiliate links can be targeted to audiences with not only the best match rates for each brand and its unique products, but also give the highest chance of delivering strong returns.
As uncertainty remains, utilising first-party data to reach high-intent audiences where they are already engaged will be pivotal for marketers looking to make their budgets work harder in 2022.
Nick Flood, Global Ad Product & Revenue Operations Director, Future Plc
- Jo Allan, CEO, Newsworks, comments: “It’s encouraging to see another quarter of market growth despite the obvious challenges over the last two years. We’re optimistic about the year ahead and our focus will be on reminding advertisers of the strength of trusted news brands and the growing, engaged audiences that quality journalism delivers.”
- Teiffyon Parry, EVP Global Demand, Smart AdServer comments: “As budgets continue their positive trajectory, industry players are beginning to assess how and where they buy inventory. With antitrust investigations rife among GAFA, the industry is becoming increasingly disillusioned with the tech giants – questioning the value they ultimately bring to the programmatic ecosystem, and reconsidering their options when it comes to choosing an adtech partner. This is particularly true for publishers, who are starting to shift towards independent players; making use of curation platforms to realise the value in their audience, exert control over their data assets, and take back ownership of their inventory.”
- Alexander Azarov, CEO and Founder, Clickio says: “With overall growth still expected for ad spend, publishers need to ensure they are using the correct monetisation solutions to capitalise on this. However, it’s important to ensure that maximising ad revenues doesn’t come at the expense of a positive user experience. Finding a balance between these two areas will be crucial moving forward, with all-inclusive monetisation solutions offering a holistic approach that benefits all areas of a publisher’s business. For example, by adjusting site architecture to ensure compliance with Google’s Core Web Vitals, publishers inherently create a more engaging experience for consumers; driving traffic and, ultimately, revenues.”
Other industry reaction
First-party data at the forefront
- Wulfric Light-Wilkinson, General Manager, EMEA at Wunderkind, says: “2022 marks the final year that marketers will rely on the third-party cookie, causing the industry to rethink strategies in terms of how data is collected and how this impacts brands’ direct communications with consumers, who will still expect campaigns to be personalised and relevant.
There’s a revolution underway in personalised marketing, and this will be driven by first-party data to curate accurate, direct messaging. While budgets are expected to grow in the next year, it’s essential brands invest in a smart way, and that means prioritising solutions with a long-term focus. By harnessing first-party data, marketers can gain a deeper understanding of their customers and, as a result, provide them with offers, deals, recommendations and messaging they’ll really value.
Wulfric Light-Wilkinson, General Manager, EMEA, Wunderkind
- Isabella Jenkins, Agency Partner at Permutive says: “It’s fantastic to see marketing budgets are increasing as the advertising and tech industries strive to recover following the pandemic…..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.”
- Ryan Afshar, Head of Publishers UK at LiveRamp comments: “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 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.
Ryan Afshar, Head of Publishers UK, LiveRamp
- Alison Harding, VP of Data Solutions, EMEA, Lotame says: “The continued growth in spending demonstrates that marketers remain optimistic. However, they are still facing the retirement of cookies, which will impact revenue. As an industry we need to be more bullish on proactive testing of privacy-first identity solutions to support the value exchange of the open web and the livelihood of independent publishers. Many are overloaded with identity choices and still unsure how to determine which ones work best for them. Scale remains a persistent elephant in the room for the industry, and one we cannot hide from.”
- Matt White, VP EMEA at Quantcast, comments: “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.”
- Phil Acton, Country Manager UK & BeNeFrance at Adform says: “Lower optimism around this year’s financial outlook tells a tale of ongoing uncertainty. Marketers continue to struggle with lingering issues that are capping their confidence — the biggest of which being persistent identity problems. While 2021 did see attention positively shift towards first-party IDs, the rising number of alternative solutions is leaving industry players unsure which direction they should take and concerned about the need for immediate action; especially with third-party cookies already axed in major environments such as Safari and Firefox. Breaking through this critical point in 2022 will call for greater flexibility. Marketers need more open and versatile tools that will allow them to do so in an adjustable, ID agnostic, and privacy-friendly way.”
- Nial Ferguson, Managing Director, UK & Ireland, Sourcepoint adds: “The IPA Bellwether report shows positive signs for the industry as a whole – 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.”
Video expanding rapidly
- Sivan Tafla, Co-founder and CEO, Total Media Solutions, says: “Budget pressures are set to increase for publishers as we climb down from the pandemic peak in page views, in addition to the seasonal downturn in eCPMs at the beginning of the year. This means they need to do more with less, all while appealing to advertiser expectations.
Publishers should take note of the strong performance of video ad spend in Q4 2021 and expand their ad offerings accordingly. When it comes to video impressions, the CPM ranges from $3 to $10 in the UK, which is much more lucrative than display ads that typically have a CPM between $1 and $2. All this should indicate to publishers the importance of a strong video strategy – both in terms of in house and syndicated content.”
Sivan Tafla, Co-founder, Total Media Solutions
- Łukasz Abgarowicz, VP of Agencies at RTB House comments: “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.
Lukasz Abgarowicz, VP of Agencies, RTB House
- Nick Reid, SVP Managing Director EMEA, DoubleVerify, says: “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.
Nick Reid, SVP Managing Director EMEA, DoubleVerify
- Teodora Gavrilut, COO at Creatopy, says: “The IPA’s latest Bellwether sheds a more optimistic light on adland than it appears. Despite projected ad spend for 2022 slowing down, the budget is solidly and undeniably present, as businesses try to keep close to consumers throughout trying times.”
As we have seen on our own ad design platform, video creation is on the up as marketers are increasingly drawn to connected TV. The ad measurement capabilities for these solutions are slowly and steadily improving, and it is clear marketers are thinking forwards as they adopt new tech and look for the channels that have the potential for the most value.
Teodora Gavrilut, COO, Creatopy
