IPA Bellwether: Industry reaction

As spend encouragingly rises again but confidence is suppressed, the themes of measurability, predictive analytics and capitalising on big data remain true to drive value from marketing activity. The continued growth in digital and search can be fuelled through better use of data and greater sophistication in how we connect online and offline data from multiple sources to show consumers we get what they want and need. From our point of view, this is becoming increasingly evident amongst our clients.

However, there is still room for improvement. For example, a study by The Internet Advertising Bureau found that marketers in the UK waste £485m on unseen online ads each year. This may be driven by poor media choices, but also poor creative choices as consumers have more power than ever to ‘switch off’.

The more creative aspects of marketing are where data science and scientific methodology is considerably underused, and this may go some way to explaining the dip in research. With adspend and main media also up, the challenge now is to provide the same level of confidence in creative marketing decisions as we are increasingly seeing in more sophisticated media decisions.

Understanding attitudes and emotions as well as hard facts from browsing and purchasing behaviour is the marketing holy grail; emotion tracking is high on the agenda for agencies right now, but it is crucial that clients are confident it is objective, scientific and meaningful.

That’s why our own work here is conducted with one of the world’s leading universities, Imperial College London. If we can crack all of this holistically, we truly are on a path to a richer and more exciting time for all.

It’s difficult to say at this point whether budgets will end up higher or lower in 2016/17 amongst our clients. However, it is clear that our clients are looking for greater efficiencies – which would allow them to improve returns or achieve the same return from lower budgets.

They are doing this by utilising techniques such as econometrics or attribution modelling more and more with an increased focus on understanding how they can impact owned and earned media. We are seeing most interest in analytical approaches than bring together econometric and attribution techniques to understand how to optimise all touchpoints in the media ecosystem.

There is also an increased focus on moving budgets between geographies – our optimisation approach is showing significant opportunities to improve payback from media by doing this.

Certainly we will be recommending to our clients not to reduce budgets. There is lots of evidence from previous economic downturns that brands which cut their media budgets not only suffer during the downturn but also take 2-3 years to catch up once the economic outlook improves.

Put another way, it could be a significant opportunity for our clients to make gains by maintaining budgets should their competitors decide to reduce media spend.

The latest Bellwether report certainly reflects the way many are feeling about the EU – unsure. However, from some recent reports, the individuals view may lead to a Brexit ‘out’ but many brands want to stay ‘in’.

The promotional marketing industry is positive and upbeat. Business is tough and competitive but that hasn’t changed – it’s brilliant ideas and execution that bring consumer experience to life past the point of broadcast.

Bellwether sets out that ‘sales promotion’ is down by 8.4% and its astonishing that this measurement is taken to mean a downward turn in spend in the broad promotional arena – the pitches being fought and won point to this figure being woefully inaccurate and not representative of the current state of play.

Experiential is growing and whilst some brands are nervous about investment especially around HFSS products, there is no cessation of promotionally led campaigns hitting the headlines. There are many factors influencing marketers’ minds at present but the positive outlook on new product development points to continued innovation in the sector.

The IPM will be releasing further insights and white papers over the coming months examining how the market is promotionally planning for success and how these mediums will be used by brands for positive behavioural change.

The decline in spend on direct marketing comes as little surprise given the turbulent year the industry faced in 2015, namely around data regulations and commotion in the charity sector. I would however say that leaving out social media and DRTV from ‘Direct Marketing’ seems a little antiquated to me.

I’m also somewhat surprised to see marketers hedging their bets so heavily in favour of internet marketing, given the current threats looming over the online advertising industry. The last few years have seen consumers grow increasingly intolerant of nuisance ads popping up on their web browsers left, right and centre. And who could blame them? Whether its banner ads, pop ups or sponsored social media posts, the average person is bombarded with hundreds of virtual brand messages per day.

With this in mind, it’s no wonder that there are an estimated 15 million adblock users in the UK; a figure set to grow to 21 million by the end of 2016. Unless marketers address the issue of relevancy, the digital ad industry is at serious risk of becoming a false economy.

All of that said, it would be interesting to see Bellwether try to measure the contribution of data to the marketing industry. Channel specificity is incredibly outdated. After all, it doesn’t matter which channel is used, it only matters that consumers receive communication in the way that they prefer. Data is not subject to limitations around channel or vehicle, it is the oil of the marketing engine.

It is disappointing to see that, yet again, investment into market research is decreasing, whilst investment into digital channels continues to rise. There is no doubt that a brand’s digital presence is of the utmost importance in terms of raising awareness and driving loyalty, but marketers must not forget real-life, more tangible interactions with consumers.

In fact, the overcrowded digital space makes a strong case for proven offline methods, which have long been effective in building strong brand-consumer relationships. Experiential marketing, such as sampling, offers a real-life experience that provokes a stronger degree of emotional engagement with a product as consumers can experience the item first-hand.

This kind of activity also enables brands to draw insightful feedback on what will influence purchasing decisions; something which brands can ultimately use to develop more impactful and profitable marketing strategies going forward.

It is fundamental that brands do not forget traditional methods such as market research, and specifically sampling, that provide frank and honest feedback directly from the target consumer.

With the IPA Bellwhether predicting a ‘modest’ marketing budget growth of 3% in the next quarter, in today’s climate, brands need to focus on the quality of the content they produce to get more bang for their buck.

While a high value media spend can drive brand engagement, powerful content can reach millions organically. Social platforms like Twitter and Instagram offer the opportunity for brands to build and push out potent pieces of content that can create a real buzz and go viral in a matter of minutes, but only if people feel compelled to share.

Plus even when a campaign has millions in media spend behind it, the rise of ad blockers – with Samsung and Apple recently adding the ability to run the software on their devices – means that consumers can simply ignore ads that just aren’t good enough. We’ve all done it.

Brands need to start thinking of brilliant content first, and adspend second, if they want to make the most of their budget this year.

The most significant statistic in the IPA’s report is that internet marketing saw the strongest increase yet again, as it has for the previous 27 quarters. This can be explained by consumers’ ever-growing dependency on their mobiles and the pressure this creates for search engines and advertisers to deliver a better experience on all devices.

Advertisers have taken this to heart as they acknowledge the importance of effective search strategies and delivering engaging content on mobile-friendly sites. Internet budgets will only continue to grow as prudent marketing departments focus more of their efforts on channels that provide customer insight and measurable return on investment. This trend is complemented by the current growth in purchasing opportunities being facilitated through social channels – all promising news for teams investing in internet activity.

The changing sentiment reflected in the report suggests departments want to spend smarter. Too often in the digital space, marketing departments and brands invest in campaigns that are slow to deliver ROI, resulting in swathes of wasted budget. With only slight budget increases suggested by the IPA, brands with small spend available need to plan campaigns around individual customer profiles from the start.

It’s by doing this that they can see early results from a digital campaign and deliver the best ROI possible.

The move of adspend towards digital and programmatic is indicative of consumers spending more time online, and on mobile in particular. In light of these figures, it’s clear that advertisers across the board are reaping the rewards of one-to-one relationships with consumers, as opposed to purely relying on mass messaging through more traditional channels.

Further opportunity for growth lies in continuing to move digital away from being a direct response channel and enabling it to deliver at the branding level, which will happen once we’ve bridged the gap between creative and programmatic. Innovative marketers are maximising real-time programmatic insights to better understand their audience and leveraging it for media planning.

However, programmatic will only be the ‘dominant force’ once creatives use it extensively to engage with consumers, delivering highly engaging ads in the right context and at the right time.

Digital advertising must be viewed in the context of the whole media plan and data must be used to unveil its impact on various channels. A combination of this integrated media planning and buying and increased creative input is crucial to enabling us to deliver on brand and direct response goals, across all digital channels.

This quarter’s IPA Bellwether once again shows that marketers are planning to invest more budget in online advertising. An increase that while not entirely surprising, emerges following the backdrop of a continual rise in adblocking and concerns around fraud and data usage.

For online advertising to continue to prosper and move beyond these concerns, the value exchange between advertiser and consumer needs to change.

Through adblockers consumers are sending a clear message that they no longer want traditional advertising, and as a result brands are sourcing new means to get their products in front of consumers online. This leads to publishers increasingly leveraging commercial editorial content about products and brands (aka ‘comtent’) as a form of monetisation.

The engagement ‘comtent’ generates also lends itself to a better understanding of the shopping intent the publisher is creating. With these insights, advertisers can have a more prosperous relationship with publishers and reach their customers more effectively.