IPA Bellwether: Industry reaction

First, let’s acknowledge that marketing budgets are still increasing and that we continue to see growth forecast. Against the backdrop of the wider UK and international economy over the last quarter, this is good news.

What we are seeing is a fairly typical trend when budget growth slows overall, with switches in spend into channels that seem to afford greater measurability and immediacy.

However, there is always a risk that measuring activity in isolation and/or short-termism doesn’t deliver as hoped. Which is why it’s important that brands really are able to track and measure what they get from their activity in a granular fashion across channels.

What’s more, this type of sophisticated approach to measurement demands a similarly sophisticated approach in how activity is conducted.

The barriers to this remain high, with a multitude of channels, each requiring significant technical expertise; varying data quality and availability; and a shortage of data and analytical experts with the necessary skills to frame and execute such tasks.

Nonetheless, we are seeing that the most forward-thinking clients are increasingly keen to take on this challenge, turning to organisations that are able to offer both the breadth and depth of specialist expertise, ensuring they’re able to take the necessary holistic approach to meeting their commercial challenges.

Listen to the marketing pundits and you’d think the latest Bellwether report was all doom and gloom, but what does it actually say?

Marketing budgets are not declining, they’re increasing – just less quickly. And more clients feel positive about their financial prospects than negative, albeit not by such a wide margin.

Two thoughts occur to me: Firstly, when you use percentages to measure changes on a quarterly basis, if the score stayed level then you’d have ever-accelerating growth: a hockey-stick curve. Not a realistic prospect.

And secondly, inflation is currently negative. So smaller increases in marketing budgets aren’t actually so small in real terms. If you’re looking for bad news, look elsewhere. This Bellwether says ‘steady as she goes’.

It’s promising to see that overall, marketing budgets continue to increase. Given the lowered growth, however, marketers, now more than ever, need to make sure they are maximising their technology budget, as well as delivering more timely, relevant – and ultimately profitable – promotions to consumers.

The time is now to move away from the traditional “one size fits all” approach and instead focus on delivering more personalized and engaging experiences across touch points.

It all starts with data, and being able to create a single view of the customer that can be shared across systems.

If anything, the report shows that marketers are still very much in the game, but need to be smarter than ever about their execution and approach.

Wider economic worries will always play a role in marketing confidence, but the one thing we should be looking at from these figures is the channel break down.

Solid growth in Internet marketing spend is not a surprise. In fact, as time goes on this will only increase. If we take TV as an example, increasing numbers of people watch TV online, and marketing spend is going to accompany these new viewers.

To segregate the Internet, and by extension digital into its own channel, rather than considering it a transmission method, is starting to look increasingly outdated. Digital dominance is going to continue, its affects will spread out even further, displacing other channels. Soon, all marketing will be digital.

Despite the general trend downwards, due to external economic factors, it is heartening to continue to see growth in the internet sector. We have seen an increasing demand for high quality video content across internet and traditional channels and all of the signs point to continued strong growth in the sector.

Our view is that there is currently a significant underspending on internet video as the traditional model is too slow and expensive to meet demand.

As we see greater adoption of innovative models by agencies and brands we expect to see an even more significant migration to internet video, so the future continues to look bright.

The latest IPA Bellwether report certainly doesn’t throw up any great surprises regarding softening growth forecasts.

However, given the very poor forecasts for China and the BRIC countries, in comparison the UK’s stats look strong.

While growth may be slowing slightly, it’s growth nonetheless – and coupled with the latest employment figures in the UK hitting a record high, it bodes well for confidence levels overall.