The full year 2021 Advertising Association/WARC Expenditure Report, which shows the UK ad market soared by 34.3% last year to reach a record £31.9bn has been welcomed by all, but the sector now faces the cost of living crisis and the fall out from the war in Ukraine.
But it seems that brands have finally learned that maintaining their advertising investment through a crisis will pay dividends later on and several economic downturns have proven this to be the case.
Precis Digital London managing director Rhys Cater reckons the report shows that as spend grows, so does complexity. While growth in search as the leading channel is strong, mobile formats and visual channels such as display, social, and video are accelerating rapidly, but data privacy issues have not gone away overnight.
Cater explained: “To succeed in an increasingly competitive market, and as budgets grow, advertisers will more than ever need to make sure that they have the capabilities and strategy to make their investments count. Digital-first creative is a must-have to maximise the effects of the visual channels.
“A modern approach to data, analytics, and attribution will be critical to understand the value of investments across an increasing number of channels. All of this must be done with data privacy and customer experience firmly in mind.
“Advertisers’ expectations for digital growth might be high, but so too are the expectations of consumers when it comes to the ads they’re served and the ways in which their data is used.”
For Mindshare UK chief revenue officer Richard Kelly 2021 was a step in the right direction after the turbulence of the previous year and the agency is seeing investment in online formats continue to flourish and further establish its influence in reaching once untapped audiences.
He continued: “The idea of the metaverse has sparked many interesting conversations surrounding the future of advertising and we expect to see digital formats continue to dominate as brands move away from more traditional advertising and begin to dip their toes into new uncharted territory.
“We’re also seeing TV stand the test of time and out-perform expectations, proving the naysayers wrong. Excitement surrounding the future of TV has been reignited as opportunities continue to develop and diversify, as exemplified by Netflix announcing the integration of ads onto the platform, means it’s certainly going to be an exciting year for the space, as the arms race between live and on-demand TV rages on without an end in sight.”
When it comes to the out of home market, which was hit hard by the pandemic, Kinetic UK chief executive Ali MacCallum maintains that brands recognise audiences are back in full force, and it is no surprise they are turning to a combination of classic and digital OOH inventory to target existing and future customers.
MacCallum added: “In our recent Mobile Pound research, we found UK adults spend £179bn a year via mobile devices while out of home, and therefore there is ever greater evidence of the power of OOH to drive online and physical sales.
“OOH consistently provides tangible value to brands and with the continued regulation and decline of previously effective online advertising strategies, we are feeling ever-more optimistic about the future of OOH. We expect this upward trend to continue as brands build familiarity to get through the potentially hard times ahead as cost-of-living rises. We are glad to see this optimism reflected in the report this quarter.”
Meanwhile, Kepler EMEA business development director Louis Connor insists fortune favours the brave. “It’s fantastic to see this immense growth in adspend as investment continues to flow into digital channels and the rise of retail media continues to prove itself as a huge opportunity. However, with consumer spending anticipated to reduce, advertisers and marketers will benefit from re-aligning budgets towards brand-building from sales activation.
“Beyond the economic picture there remains persistent industry challenges – adapting to a post-cookie world, staying on-top of data-privacy obligations, and unlocking opportunities in commerce media to name only a few.”
Wavemaker UK chief strategy officer Verra Budimlija believes that in spite of economic uncertainty and conflict in Europe, there are positive signs, including the Qatar World Cup at the end of the year, will boost the market.
Even so, Budimlija stresses that a resurgent industry deserves – and needs – robust analysis.
She concluded: “When £3 out of every £4 is spent on ‘digital’, can we finally put that word out to retirement? Everything is digital. The idea of digital specialists is absurd. A ‘digital planner’ is just a planner. Try replacing ‘digital’ with ‘press’, and if it sounds absurd, it probably is.”
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