The IPA’s Q1 2018 Bellwether Report released yesterday has found that 5% of UK companies are raising their budgets in the first quarter, down from 8.6% in the previous quarter. According to the report, marketing execs are pursuing cost and efficiency savings to bolster spending in other areas.
Main media advertising, which includes TV, radio and cinema, fell from 1.7% at the end of 2017 to a net balance of -2.1%. Surprisingly, mobile advertising has stagnated with an equal proportion of marketers revising their budgets up to those indicating a fall, resulting in a net balance of +0.0%, from +6.0% in Q4 2017.
Despite the overall market slowdown and the recent scandal surrounding Facebook, IPA Bellwether panellists have continued to step up their adoption of internet advertising during the latest quarter. The Q1 survey results indicated that internet marketing spend was raised for a thirty-fifth successive quarter at the start of 2018, albeit at a slower rate.
Christophe Joyau, Chief Operating Officer, Widespace says, “Slowing growth is evidence that we are now starting to see the impact of the recent scandals from the duopoly that have dominated the headlines for the last year or so. Market conditions are challenging and the industry faces a lot of work to turn it around and give brands the confidence to spend on advertising. Despite this turmoil, online advertising is still performing best which is testament to its effectiveness if done properly.
“The stagnation of mobile advertising is surprising and shows that the industry still isn’t using mobile to its full potential. We need to grow the industry’s confidence to be creative with mobile. 15 second unskippable mid-roll video ads are never going to get the engagement that brands want but well put together outstream ads that encourage user engagement do work, and this is where advertisers should be focusing spend.”
Eric Visser, CEO, JustPremium, adds, “It’s a challenging time to be in advertising and this week’s IPA Bellwether report reflects the wider economic outlook for the UK. Despite the outlook and the tricky macroeconomic market conditions, it’s positive to see that this is still a story of growth for the online media sector. Achieving thirty five quarters of successive growth is testament to the ever-increasing quality of what we are able to produce in online media.
“This continuing trend is reflective of the fact that, in the face of tightening budgets, marketers turn to the mediums that can provide the clearest success metrics – such as In-View Time – in a bid to prove the ROI back to the business.
“We’re just at the beginning of understanding what needs to happen in the online sector to make sure we’re providing the best experience for consumers, advertisers and publishers alike. As a member of the Coalition for Better Ads, we are striving to champion industry initiatives that improve ad experience for the users so that we continue to grow as an industry and provide more creative, better targeted, fraud free and brand safe ads into the next quarter and far beyond.”
Graeme Howe, Director, ad:tech London says, “For publishers and adtech firms, it’s not all doom and gloom. In fact, it’s relatively positive. Internet marketing spend has risen for the 35th successive quarter, with companies encouraged by the strength of it’s performance, supported by the measurement capabilities that form the bedrock of digital campaigns. It’s also great to see that events budgets have continued to grow as marketers continue to see the value in being given a platform to promote the business and establish senior executives as thought leaders in their field.
“With GDPR right around the corner, it makes sense that brands and media agencies may be reticent to ramp up campaigns as their focus shifts to resolve compliance concerns for the new regulation. As technology continues to change the way the industry operated, GDPR is one of the key topics that will remain topical and will no doubt be a key theme at ad:tech this September. By then the industry will have had a chance to come to innovate in a post-regulation environment, and brand, agency and media leaders will have a chance to share their learnings.”