IPA Bellwether: Industry reaction
The recent “underwhelming performance” of marketing budgets continued during the third quarter, with UK businesses recording a slim reduction in spending availability according to the Q3 IPA Bellwether report.
Here, experts dissect the findings.
Given the economic and political backdrop, the optimist in me says this report might not be quite as negative as expected. Marketers continue to hold their breath in the midst of Brexit uncertainty, with two-thirds holding their marketing budgets – and their nerves – steady. And while 18.2% of firms have reduced their budgets, almost as high a percentage have increased them. So signs look better for 2020, perhaps a little sliver of sun in a cloudy sky.
We continue to see a shift towards online and data driven marketing, no doubt because of its measurability. Though just because we can measure digital marketing in a myriad of ways doesn’t mean it’s more effective. Keeping focused on the end-game, on longer term healthy businesses and brands, is becoming more important (and more challenging) than ever. The major TV networks must act faster and work together to address their measurement shortfalls, or it will be increasingly difficult to justify spend on this medium against digital.
Of greater concern though is the significant cut in market research budgets. Our industry depends on all of us striving to understand what people want, how they feel, and how to create experiences that will connect with them. Once we take our eye off that ball it will be very difficult to find our way back.
Unsurprisingly, the latest IPA Bellwether report has highlighted that the hesitancy and shorter term decisioning created primarily by Brexit uncertainty has led to a tactical shift in deployment of marketing budgets. A move to shorter term sales orientated campaigns being activated in digital channels is predictable in such conditions, particularly as the data, tools and systems are well established in those channels. However, marketers are increasingly understanding that this behaviour is potentially at the expense of the overall short-and longer-term brand health.
We need an end to this binary thinking, particularly between short vs longer term thinking and therefore pitching mainstream media against online. For instance, the digital capabilities of OOH and the interplay between OOH, mobile and commerce means that the channel delivers a credible last window of influence before making a purchase, in environments that are also contextually advantageous and entirely brand safe. Through digital OOH brands and marketeers can now deploy budget in near real time though data driven trading platforms with true scale and impact.
Christian Gladwell, global CEO, M&C Saatchi Performance
Whilst total marketing budgets reduced slightly in Q3, almost two-thirds (64.1%) of marketers reported no change in overall advertising investment and budgets continued to shift from traditional to digital. Couple these findings with the IAB UK’s half year adspend update, which reports that total UK digital ad spend was up 13% year on year in the first six months of 2019 driven by display (video) and search, and you have a more positive outlook for digital advertising.
While the current economic and political climate may impact ad spend, brands understanding that mobile is now more than simply a device will be key to continued digital advertising growth. With increasing touchpoints, joining the dots between all digital platforms to engage the connected consumer will become ever more relevant for brands. Addressing the connected attribution issue will be key to sustaining consumer growth and the associated digital ad spend.
John Wittesaele, CEO EMEA, Xaxis
The results reinforce much of what we saw in Q2 2019, with total marketing budgets undergoing a period of stasis in response to political and economic uncertainties. But, the gloomy top line figures obscure an impressive, and consistent, increase in online spend. As digital retains its pole position for the third quarter in a row, the pivot to programmatic advertising looks set to continue unabated.
When trying to identify the driving factors behind bigger digital advertising budgets, we can see the wide range of newly available tools designed to help meet marketing objectives more effectively and efficiently. These encompass AI techniques to streamline the media buying process and optimisation solutions that enable ad campaigns to be measured against custom marketing metrics specially designed according to desired business outcomes.