This week’s Advertising Association/WARC Expenditure Report shows the UK’s ad market recorded a 6.1% increase in spend to £36.6bn in 2023, the thirteenth annual expansion in the past 14 years, driven by online formats.
Yet while the report draws its own conclusions, Decision Marketing quizzes industry chiefs for their take on what last year’s figures – and next year’s forecasts – mean for the industry as a whole.
For Rapp executive chairman UK and APAC Chris Freeland the fact that three-quarters of all UK adspend is accounted for by online for the first time is a significant milestone in the ongoing digital evolution of the advertising industry.
He explains: “Online offers increased targeting capabilities, measurability and analytics, flexibility and adaptability, global reach, and improved customer interaction. So any business that chooses to overlook online does so at their own peril. But the online space is a crowded market. And advertisers mustn’t overlook the risk of digital fatigue – there is no room for a one-size-fits-all approach.
“Instead, advertisers and businesses must deploy AI capabilities and increased automation to help leverage data that will lead to a truly personalised customer experience. These technologies are still in their infancy, but those who choose to turn a blind eye and don’t begin investing in this tech will fall behind.
“To cut through, advertisers and brands must leverage data to show up authentically through their digital activations and campaigns in the places that make the most sense.”
Meanwhile, Joan London managing director Tom Ghiden reckons the figures reflect a strong position for the advertising industry as we head further in 2024. And, he predicts this growth will undoubtedly be bolstered by the upcoming summer of sports and the General Election, in which winning customers’ attention will become extremely competitive.
Ghiden continues: “While online advertising will continue to dominate, particularly around the summer of sports, as 43% of Gen Z fans will use social media platforms while watching live events, there is still huge amounts of value in more traditional forms of advertising, including TV, cinema, OOH and broadcaster video-on-demand. All of which are showing strong growth this year.
“As brands begin to make noise around some of the world’s biggest cultural and political events, it’ll pay for brands to explore all forms of advertising formats, rather than hanging their hats on one area. Those who authentically advertise, while pushing the boundaries of creativity and experimentation will stand out from the crowd.”
It is a theme which is taken up by Analytic Partners senior director Justine O’Neill, who warns that the dominance of online is going to make the channel an increasingly saturated space.
She continues: “More and more brands need to be targeted about where they are funnelling this spend online and making sure it actually reaches their specific audience. It will be vital for businesses to re-test, measure and check where their audience is most attentive online balanced with monitoring CPMS.
“However, as online ads offer the highest immediate payback for brands, while TV campaigns have a longer-lasting effect, there is a balance to be found. As the report suggests, the economic headwinds have died down, at least in part, leading to an increased consumer confidence.
“Brands should likewise take comfort in this and, through an omnichannel approach, build on their brand marketing with performance focused spikes across the rest of 2024. Key events including the UEFA Euros and the Paris Olympics are prime opportunities to make the most of increased audience awareness.”
Finally, Kepler managing partner of consultancy James Coulson points out that the ongoing digitisation of customer behaviour, media consumption and the data it generates is the fuel that is driving continued digital media investment – and it’s no small thing for digital to be accounting for three-quarters of all UK advertising spend now.
He adds: “Brand marketing has become a data creation, management and utilisation game and advertisers are gearing their in-house resources, agency relationships and tech platform investment strategies to maximise the potential of first party data and data from partners.
“Measurement and cookie depreciation have been key priorities, but there’s no sign here that these issues and the ongoing cost of living crisis are denting brand’s confidence in digital marketing.
Coulson concludes: “An interesting driver to digital investment growth now and in the future is the rise of retail media with the integration of online commerce and advertising through to physical retail environments, ultimately, this will enable brands to build a more comprehensive picture of the customer journey.”
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