Industry analysis: Carat adspend forecast

It’s not at all surprising that adspend expectations are being curtailed in many territories, in particular North America and the UK – new targeting tools are being rolled out by the major advertising platforms – advertisers are experimenting with these new audience selection methods.

However, the bigger underlying trend we are currently seeing is that advertisers are seeing the opportunity to use CRM data and insight to deliver advertising more precisely to their intended audiences – driving down the spend required to reach target audiences.

Media agencies are being challenged by advertisers to engage with their CRM agency to get customer data and insights working to inform online targeting strategies.

And it’s not just about positive targeting – the ability to exclude existing customers (or indeed any segment of known consumers) from any one ad campaign reduces unnecessary spend without having an impact on the number and quality of leads generated – the net effect is lower cost per conversion.

While yesterday’s Carat Ad Spend Report revealed a sizeable decline in the predicted UK adspend for 2016, citing the EU referendum vote as a major factor in the downgrade, there is in fact a far greater industry trend which could be contributing to the predicted drop.

Unsurprisingly digital adspend is still driving the lion’s share of the growth, but it is the wider trends in digital which I believe are impacting adspend in the UK, far more than legislation.

As an industry, we’re increasingly seeing brands beginning to move away from traditional, money-driven search and display marketing campaigns, and instead focusing on utilising the budgets available to them on creating stronger customer experience and engagement through their own digital platforms/channels.

I know it’s been the buzzword for some time now, but content and user-experience marketing – such as creating personalised user platforms – are becoming a strong selling point, where brands are increasingly looking to place their marketing cash, as bigger user-centric activations become increasingly common for brands looking to drive greater engagement both online and off.

Despite the obvious impact which the uncertainty landmark legislation like the referendum will leave in its wake, there are a number of other factors – such as the changing focus of modern marketing departments – which are influencing digital marketing spend, both in the UK and globally, and will continue to shape how the marketing industry operates in the coming years.

As digital adspend overall continues to drive growth across the UK market, paid search and social media advertising are being singled out as being particular driving forces in this booming sector.

As an industry, digital and creative are becoming increasingly data-centric and the insights derived from these pools of customer information are helping to bolster effectiveness of media spend across these channels and platforms.

Whilst, in numbers at least, growth in spend has been revised down, it’s important to remember that data and the measurability afforded by digital are helping marketing budgets work harder and more effectively, to drive better ROI through enhanced targeting and reducing wasted spend.

As marketing teams strive to deliver more for less, relevant and integrated data will continue to be a crucial engine driving decision making for brands and marketers.

Similarly, there will also be a requirement for brands to marry the hard analytical practices of data-driven marketing with innovative approaches to creativity and content in order to succeed in increasing performance, despite the reducing budgets.