IPA Bellwether: Industry reaction

While it is encouraging that overall marketing spend is on the increase, I am disappointed to see that investment in market research is on the wane, and I would question why this crucial part of the marketing mix is falling by the wayside.

Each component within a marketer’s toolkit is clearly essential and plays its role, but what can be more imperative than researching your target audience to ensure you understand who they really are and what they really want so you can provide just that?

As marketers we learn more about our brand from customers, both old and new, than any other resource so we must push for change in this area.

The tenth successive quarter of upward revisions to marketing budgets reported by the IPA Bellwether Report reflects the ongoing buoyancy and consumer confidence within the UK. Zero inflation in March and ongoing low interest rates are all good news stories for boosting consumer spending.

This has been specifically seen in the positive noises from the automotive industry where expectations of year-on-year sales growth has been reflected in the growth of their marketing spend.

FMCG clients are also increasing their spends within online and performance channels whilst retail brands are investing more into their ecommerce propositions as the convergent media landscape becomes more and more lucrative.

There has also been a pre-election surge of investment and it will be interesting to see if this confidence remains, whatever the election result.

These results confirm our opinion that the UK ad market is well-positioned for very healthy growth this year. ZenithOptimedia expects adspend to grow 8.4 per cent in the UK in 2015, faster than any other market in Europe and North America. This is due partly to the strength of the economy, and partly to UK marketers’ rapid embrace of the opportunities offered by digital media.

An impressive 51 per cent of UK adspend will be digital this year, more than in any other country in the world. We predict that digital will grow 17 per cent year-on-year as marketers rapidly increase their investment in online video, social media and all forms of mobile which reflects the IPA’s findings that marketers have increased their spend in the internet by 8.4 per cent in the last quarter alone.

Meanwhile the spread of programmatic buying is making digital display more efficient and more effective. We expect continued innovation in marketing technology to drive sustained adspend growth over the next few years.

As digital increasingly permeates every aspect of people’s lives and becomes the space where meaningful interactions take place, it is unsurprising that internet ad spend continues to grow.

Marketers are evermore reliant on the internet and the technology that powers it to find the most efficient and effective ways to engage with the always on, multi-screen, mobile consumer.

Increasing investment in the internet is continuing to fuel the growth of programmatic advertising while supporting the future of publishers looking to monetise their digital platforms.

It’s great to see from the IPA Bellwether that the risk and uncertainty around the election that was evident towards the end of 2014 hasn’t affected confidence. Quite the contrary in fact.

While spend on big budget campaigns suggests a healthy view of the power of brand, the accompanying digital and online spend increases reflect the need to invest in managing the complexities that brands face in today’s world. Bringing all of this together is where the greatest opportunities lie. And not doing so brings the greatest risks.

Consumers expect things on their terms today more than ever, and by investing in the right areas, brands can exploit evolving technologies and data proliferation. It’s not always easy for marketers to achieve; however, this is where we see brands enjoying the best returns.

It’s encouraging to see that marketing spend is up for the tenth consecutive quarter, which bodes well for the continuing health of the industry. What interests me the most, however, is the upturn in direct marketing.

With a 5.5 per cent increase, spend is the highest since 2010 and the latest Bellwether seems to suggest that marketers are beginning to understand or re-engage with the benefits that direct marketing can have on a campaign.

For example, Royal Mail MarketReach’s latest research entitled “Private Life of Mail” shows that the ROI of campaigns is boosted with the inclusion of direct mail. It seems that the industry is getting wise to the fact that consumers don’t live in silo existences and that a campaign should not only be digital, or social or experiential, but should include a mixture of elements for maximum effect.