While many in the industry – including trade body the DMA – have been desperate to shake off the negative connotations of the term “direct marketing”, it seems clients are increasingly turning to the discipline, no matter what it is called, as the rise of technology is starting to deliver the goods in terms of personalisation.
This week’s Bellwether is a case in point. Not only have budgets been revised up once again, but clients have pinpointed direct marketing as the strongest area of growth in the year ahead, with a net balance of +15.6% of panellists provisionally estimating higher spending here.
And, as IPA director general Paul Bainsfair states, the rise in investment towards direct marketing is being driven by technological advancements and AI’s ability to enable hyper-personalisation, putting the discipline at the forefront of the new era of marketing – and a long way from its “shit that folds” image.
The report draws its own conclusions but Decision Marketing quizzes industry chiefs for their take on what it all means for the sector and beyond.
For StackAdapt chief marketing officer Ryan Nelsen (top left) budgets are adjusting “cautiously but decisively”, with the shift towards direct marketing highlighting a pivotal trend that brands are betting on AI.
He adds: “Looking ahead, the forecasted +15.6% growth for 2025/26 speaks volumes about how marketers are doubling down on data-driven strategies to connect with audiences on a deeper level. This isn’t just about spending more – it’s about spending smarter.
“Take hyper-personalised email campaigns, for example. AI-powered tools can create dynamic, real-time messages that hit the mark every time. Combine this with the precision of programmatic advertising, and marketers have a recipe for maximising ROI while driving sustained growth.
“In today’s landscape, hyper-personalisation isn’t a nice to have – it’s the key to standing out. As AI continues to unlock new possibilities, the brands that embrace it will lead the way into a new era of marketing innovation.”
RTB House head of sales development and efficiency Aleksandra Drozda (top middle), meanwhile, reckons that the report is further evidence of the shifting priorities within the marketing industry.
She explains: “Increased budgets for direct marketing reflect an increased emphasis on personalised and measurable campaigns, which aligns with marketers implementing programmatic and AI-driven advertising solutions.
“Leveraging technologies such as advanced ‘deep learning’, brands can create highly targeted campaigns while maximising their engagement and ROI.
“The decline in main media budgets signals a move away from traditional channels towards digital-first. This will present an opportunity for marketers to utilise scalable, performance-focused strategies to achieve measurable results in a cost-efficient manner.
“With challenges such as rising costs, solutions that make marketing investments work harder are key. By integrating AI and especially deep learning into their strategies, marketers can ensure that campaigns remain both effective and efficient, positioning brands for success as budgets rebound in the coming year.”
However, Medialab chief data officer Will Davis (top right) strikes a note of caution about the increasing adoption of new tech.
He adds: “The report identifies the surge in technological advancements, particularly in AI – an area identified in the report as being a driver of investment in direct marketing and a way to offer new services and pricing models to clients.
“But AI also creates a double-edged sword for business owners: the tech offers unprecedented opportunities, but those who don’t adapt risk falling behind. The key to staying relevant and thriving over the long term is to cultivate a culture of continuous learning.
“AI is not a one-off skill; it evolves, so training should too. Investing in a base level of AI literacy now will allow businesses and employees to more quickly embrace future AI initiatives as they come to market.
“As budgets increase and priorities shift, businesses must ensure their workers are equipped with the tools needed to use AI constructively, enabling you to leverage the tech effectively and ensure every pound spent drives measurable results.”
The talent challenge is a theme that chimes Kantar Media CEO for UK and Western Europe Lucy Bristowe (bottom left) who reckons that, through a period of political and economic change, it is encouraging to see the advertising world double down on what really matters: connecting with people.
She continues: “With bigger budgets for events and direct marketing, brands are showing that they are serious about meeting customers where they are, face-to-face and on their own terms, while also using AI and technology to drive personalisation across digital channels.
“Creating real connections with consumers takes more than just smart tactics and technology. It requires a deep talent pool to help gather and analyse the right data, translate it into actionable insight, and then execute impactful campaigns.
“The focus must be on nurturing this talent to successfully find and track new audiences while keeping close to existing ones. As hyper-personalisation becomes the new normal, we expect to see brands leading the pack in 2025 when they have the tactics, tech, and talent to truly connect with their audiences.”
LoopMe chief data scientist Leonard Newnham (bottom middle) is also concerned about the talent pool.
He explains: “The timing of the UK’s AI Action Plan and the latest IPA Bellwether Report highlights the critical role that AI will play across the UK economy in 2025. While the Action Plan commits £14bn and establishes new growth zones, the latest IPA report reveals that AI has already become a vital tool for UK marketers, particularly in driving hyper-personalisation across campaign execution and direct marketing, which has seen a rise in investment because of this.
“For this momentum to continue, it is vital that the Government follows through on its pledge to attract and retain top AI talent. As businesses face rising labour costs, simplifying the processes for student and work visas is essential to achieving this goal.
“The Government must also ensure it delivers on its promise to balance regulatory oversight with a supportive environment for innovation, providing genuine support for startups and research-led spinouts.”
In light of Meta’s plan to scale-back fact-checking, Outbrain head of enterprise UK Alex Cheeseman said advertisers concerned about brand safety on these platforms should shift their budgets.
“While Q4’s Bellwether Report recorded a decline in marketing spend for published brands and video, with brand safety and DEI now in the spotlight, publishers providing fact-checked, high-quality environments stand to gain as advertisers grow wary of murky or regressive platforms.
“In a market where efficiency still rules, marketers must explore safer, more principled alternatives. By investing in premium publishers, brands effectively ‘vote’ for factual reporting and social responsibility without sacrificing performance.
“Meanwhile, video demand keeps growing: in 2024, 89% of consumers wanted more videos. Publishers are rising to this challenge, offering ‘social-style’ vertical formats on the open web, reaching wider audiences who trust credible journalism. With brand safety, immersive creative, and performance all aligned, premium publishers have become a compelling choice, and a necessary refuge for modern marketers.”
But the final word goes to Joint founder Richard Exon (bottom right), who also wants the Government to step up to the plate.
He concludes: “Come on Labour, we’ve got high hopes for you still but my goodness you need to put some wind in the sails quickly. The Bellwether report perfectly reflects an understandable sense of immediate business caution married with a dose of optimism for the future.
“Given the rock solid historical data demonstrating how companies that maintain adspend in tough times benefit disproportionately, what better time for confident advertisers to demonstrate leadership.
“To do anything else is to risk talking ourselves into recession.”
Related stories
Direct marketing booms as tech drives personalisation
Bellwether reaction: Learn how to protect against frost
Direct marketing glows as adspend is hit by big freeze
Bellwether Q2: Can election bounce bring blue skies?
Direct marketing up again in ‘vim and vigour’ Bellwether
Market grows 60 times faster than GDP to hit £36.6bn
IAB/PwC Digital Adspend reaction: Channels to watch
Be the first to comment on "Bellwether: AI is delivering but has Britain got talent?"