Bellwether reaction: ‘Green shoots will need nurturing’

disciplinesJan2024-2New figures from this week’s IPA Bellwether Report reveal total UK marketing budgets have been revised up again, stretching a run of growth that dates back to Q2 2021, with the green shoots of recovery seemingly emerging in the spring sunshine.

Yet while the report draws its own conclusions, Decision Marketing quizzes industry chiefs for their take on what it all means for the sector and beyond.

First up is Outbrain head of enterprise northern Europe Alex Cheeseman, who reckons media effectiveness has emerged as the pivotal focus for advertisers today. While competitive pricing and click-through rates provide a baseline, the real challenge, and necessity, lies in deepening the understanding of ad placement quality and its influence on brand and performance.

He adds: “As the advertising industry pivots back to its foundational principles of forging meaningful, trusted connections and crafting impactful messages, the role of attention metrics will become crucial for any effective media-buying strategy.

“In an era dominated by generative AI, heightened polarisation, and a deluge of social content, the strategic reallocation of media budgets towards reputable publishers is more than a tactical shift; it’s a long-term investment in brand integrity and trust.

“Despite current reports showing a dip in budgets for publishers, the enduring value of sticking with reputable publishers and supporting the future of journalism cannot be overstated. Coupled with precise attention measurement, we are likely to witness a more sophisticated blend of brand building and performance advertising, each enhancing the other as essential tools in the modern marketer’s arsenal.”

Over at TGI at Kantar Media, director Rachel Macey says the Bellwether findings showing a cautious optimism among marketers are mirrored in its consumer data, with some groups more willing to spend on the things that really matter to them.

She explains: “There are pockets of potential growth if you know where to look, and whether it’s events or direct marketing, the key to teams making their budgets go further this year will be identifying those people who are loosening their purse strings, understanding what drives them and building campaigns around them.

“Our TGI data reveals, for example, that engagement with events is certainly on the rise, especially among the young. Just in the past two years, the proportion of Gen Z who say they prefer to buy products from companies who sponsor exhibitions or music events has grown from 14% to 19%.

“Diving into the subtleties of data in this way is absolutely key to helping brands and their agency partners develop more sophisticated targeting and maximising return on investment, so it’s good to see the small uplift in insight budgets during this quarter at least.”

Medialab head of marketing effectiveness Anthony Pey concurs. He comments: “It’s positive to see budgets have continued to have a net upward revision of +9.4% this quarter, suggesting once again that market conditions are stabilising, as per consumer confidence scores.

“Marketing budgets are often seen as a good temperature check on the direction of travel for the overall UK economy so seeing this continued trend is indicating a potential road to recovery and increases optimism for 2024/2025.

“Individual channel movements provide further evidence, with the growth in events, online and video formats suggesting advertisers are opting for and seeing the value in brand-led consumer experiences and high-impact, engaging channels to aid cut-through and ensure they have stronger brand metrics and recall compared to their peers.”

However, Zappi CMO Nataly Kelly highlights the fact that there is still a focus on trimming budgets, with a net balance of -4.4% predicting cuts to market research.

She continues: “While it’s irrefutable that brands want to stay close to their customers, the focus on lean operating costs is forcing CMOs and brand insights teams to do more with their data – beyond just project-based testing.

“Companies are adapting by shifting away from expensive traditional methods to more streamlined, cost-effective ways of gathering insights, including AI-powered tools. This shift allows them to integrate insights from research right from the start and keep the consumer at the table when making business decisions.

“These tools not only save money but also improve the speed and relevance of the data collected, ensuring market research remains a dynamic, strategic asset for brands aiming to make informed decisions and achieve long-term success. This focus on efficiency and agility will help market research remain an integral part of any marketing campaign, even in the face of budget constraints.”

Meanwhile, for Analytic Partners director Justine O’Neill this week’s Bellwether highlights an interesting shift in which companies are focusing more on short-term sales promotions while cutting back on longer-term brand advertising.

She adds: “While the overall growth in marketing spend is encouraging, this trend towards promotions over main media advertising could be a red flag. Our data shows that overusing promotions can cause consumers to buy primarily based on price rather than brand loyalty, which can erode profit margins in the long term and make it harder for brands to maintain pricing power.

“Avoiding a short-term mindset is key. While promotions have an important role to play, businesses need to ensure they don’t come at the expense of building long-term brand equity.

“With the UK appearing to be on its way out of a recession, brands should instead take this opportunity to invest in main media advertising and reconnect with their audience. By taking a balanced approach – investing in both brand-building and targeted promotions – brands can drive growth that is both impactful and sustainable.”

Even so, Joan London managing director Tom Ghiden believes it not surprising to see sales promotions gather more momentum as we continue through economic uncertainty, although the decrease in main media spend is more concerning, given brand building is still often spoken about as a key to long-term success, even during turbulent times.

He continues: “We could now be entering the end of a trade-off era – where advertisers need to carefully balance the two tactics, to avoid damaging the effectiveness of them both. This means we could see more performance marketers and brand-building creative teams collaborate to pursue the same growth priorities for the same target audience.”

Ghiden concludes: “As we enter a busy summer of events (and sport), the advancement of AI and other technologies will likely contribute to more ad spend being thrown into this category. But as technology continues to enhance the viewing experience and make it more immersive and inclusive, 77% of Gen Z and 75% of Millennials still prefer to watch sport outside of its physical venue.

“So while budgets remain positive for events, main media advertising should start edging up – and will be largely driven by spend on digital platforms closely followed by TV and OOH.”

Related stories
Direct marketing shines again as spring brings recovery
Spooner on…a love letter to the humble direct mailshot
Direct marketing hits 20-year high in upbeat Bellwether
Deluge of emails sees Brits long for return of direct mail
Print revival set to accelerate as digital fatigue spreads
What’s in store for 2024…for multichannel marketing?
Bellwether reaction: The rise of real-world connections

Print Friendly