This week’s IPA Bellwether Report reveals total UK marketing budgets have been revised upwards by the strongest rate in over a decade, and to the second highest level in almost a quarter of a century, with the green shoots that first emerged in the spring starting to flower.
Naturally, 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.
First up is Epsilon managing director Elliott Clayton, who comments: “‘Change’ is the word of the month and it’s heartening to see investment creeping beyond shorter term activations.
“Marketers must martial their spend across online and offline environments that allow them to maintain a strong brand while also reaching in-market individuals at the right moment. Direct marketing has always been a fantastic example and increasingly we’re seeing those opportunities across newer environments like retail media.
“As budget growth begins to settle into a longer term trend, the other area marketers must pay close attention to is their tech stack. Increasing budgets offer opportunity for new investments, but hastily pouring funds into disparate platforms that don’t integrate well leads to wasted spend. Stick to a coherent strategy – the whole should be more than the sum of its parts.”
For Analytic Partners senior director Justine O’Neill, the fact that sales promotions are experiencing their longest spell of growth since 2018 and a concurrent uptick in main media marketing spending, will mean brands should benefit from growth that is both sustainable and impactful.
However, she does warn brands to be aware of promotions losing their punch. O’Neill says: “According to our ROI Genome data, higher levels of relative promotional investment generally lead to lower levels of ROI and can degrade price elasticity and brand health. On average, media ROIs are 30% higher for brands with low levels of promotional investment.
“Finding the appropriate balance will stand brands in good stead by providing value to consumers who are still struggling with the cost-of-living crisis and cementing trust which will pay it forward when it comes to long term brand loyalty.
“This astute and nuanced balancing act between targeted price promotions and long-term brand health should help CMOs drive impact as they gear up for the golden quarter where there is everything to play for at the busiest consumer spending time of the year.”
Acxiom EMEA chief commercial officer Alex Pym is in little doubt that it is intelligence-led marketing strategies that give brands the competitive edge they need to maintain customer trust and ultimately feed a business’ bottom-line, but it takes both smart investment and strategy.
He adds: “In today’s hyper-connected world, people interact in real-time with brands through multiple offline and online channels, expecting highly personalised and connected experiences with brands that are aligned to their interests and values. In fact, nearly half (47%) of the people surveyed by Acxiom said they are more likely to click on an advert or email if it contains personalised content.
“These interactions form a priceless cache of data which, with the right investment in tools and talent, can be leveraged to gain valuable insights, create a meaningful customer journey and improve speed to revenue. So for the majority of brands that are yet to truly realise the full value of their customer data, this uptick in marketing budgets should be the trigger to evaluate their customer intelligence strategy to fully maximise marketing ROI.”
Meanwhile, Joan London managing director Tom Ghiden reckons: “After stagnation and crisis politically, the country is now embracing change and it feels like UK business is mirroring the nation’s mindset. With budgets for TV on the rise, we see brands investing in longer term brand building to boost their profiles, attract a wider customer base and ensure business stability going forward.
“Brands are also looking to better connect with their customers be that by interacting with them through in-person activations or expanding their customer knowledge with better insight.
“As the industry grows and becomes increasingly adaptive to the changing economic conditions, brands must capitalise on their whole marketing toolkit old and new – to connect with people in ways that matter most to them, creating memorable moments for lasting brand impact.”
Perhaps unsurprisingly, given his area of expertise, Imagination chief executive Patrick Reid flags up the fact that the events industry continues to outperform all other areas of the marketing mix.
He continues: “It’s clear brands continue to recognise the power of experiences as a way to drive loyalty and forge deep connections with target audiences.
“With the Summer of Sport in full swing the opportunity for brands is significant. Brands that tap into experiences along with authentic content will be the brands that drive growth through long-lasting consumer relationships and loyalty.
“Building your brand with experiences should be a priority for those wanting to navigate the ups and downs of the changing marketing landscape.”
Yahoo UK managing director Steve McHenry agrees. He adds: “There’s a lot to be celebrated in this quarter’s Bellwether report. It’s no surprise to see events once again seeing a big increase in advertising spend. The lead-up to large-scale events – from Glastonbury to the Euros and the rest of the Summer of Sport – would have no doubt have seen marketing budgets increase as advertisers look to make the most of captivated audiences both inside and outside of the home.
“It’s the same for TV and radio spend too, as the millions of people following such events from the comforts of their homes was another big opportunity to engage with them – either through traditional media or streaming platforms.
“Overall, better economic conditions and growing consumer confidence, as well as the UK general election and the prospect of a new Government, have helped spending levels bounce back to much more positive levels.
“It might be too soon to say that we’ve turned the corner just yet, but it certainly seems that confidence is back to a much better place than it has been over the past few years. We still need to be cautious, but any positive sign of growth should certainly be celebrated.”
Joint founder Richard Exon is also a big believer in the general election “bounce”, insisting that the advertising industry stands to benefit from a renewed sense of stability.
He explains: “As one German newspaper put it about the departure of the recent Conservative government: ‘The clown show is over’. It could be said that whatever one’s politics, the Johnson, Truss, Sunak triumvirate undeniably failed to create an environment where businesses felt confident in making long-term investment decisions.
“Today, with inflation at or around the 2% mark and the Bank of England trailing an imminent interest rate cut, advertisers may well soon stand to benefit from an uptick in consumer confidence. Furthermore, when we saw Starmer on stage at the recent Nato summit, sandwiched between Biden and Macron, there was a strong sense that the UK economy may have less disruption ahead of it than either the US or the Eurozone.
“Goodness knows it won’t be plain sailing, but UK marketing and advertising can be both driver and beneficiary of the new Government’s growth agenda.”
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