WARC/AA report reaction: Don’t play it safe, be brave

firefighters-gf61ff7a34_1920New figures from the latest Advertising Association/WARC Expenditure Report are a mixed bag, with the ninth consecutive quarter of growth demonstrating a resilient recovery from Covid-19 tempered with a looming slowdown.

While the report draws its own conclusions Decision Marketing quizzes industry chiefs to gauge the mood of the marketing nation.

Cream co-owner and CEO Neil Cunningham reckons that years of unprecedented market conditions mean that battle-hardened marketers, buffeted by experiences from the 2008 crash onwards, can rise above the noise.

He continues: “There is more smart research, more data, more holistic measurement through the likes of marketing mix modelling, to allow marketers to reap the rewards of spending in a more rational and evidence based-way rather than relying too heavily on intuition and habit.

“In these ongoing ‘unprecedented’ times, marketing departments can approach future investment decisions with a clear-eyed confidence in their brand and audience targeting. There is a silver lining of a promise of better times to come in 2024, which at the moment feels quite ‘unprecedented’ in itself.”

Meanwhile, Econsultancy director Richard Robinson, says that, despite the struggles of the socio-economic climate, he is encouraged to see the continued annual increase in UK adspend. But as ever, he points out, the devil is in the detail, and the outlook looks less rosy when considering the ongoing impact of inflation on the wider economy.

Robinson adds: “Advertisers will be looking to temper budget cuts in the coming year, becoming ever more mindful of their online media spend. But this is no easy task – especially considering the updated data protection laws in an increasingly cookieless environment. This dance will conclude in a moment of reckoning for owned data efforts – with ATT continuing to disrupt the digital advertising landscape throughout 2023.

“As we emerge from the media highs of the World Cup and Christmas, advertisers need to carefully consider where, when and how they are placing their messaging to avoid digital fatigue among their consumers.

“With our research revealing 89% of customers are resetting their expectations to match their best omnichannel experiences, advertisers need to ensure they are aligning their budgets with the ever-evolving customer needs.”

Kepler EMEA managing partner of consultancy James Coulson believes that the growth we have seen in 2022 has simply been in an effort to keep up with inflation. And while it is likely the World Cup and Christmas period will show that Q4 is relatively strong, it is only keeping the inevitable at bay with 2023 being the year when the recession finally hits.

Coulson comments: “The positive part of the story is that the recessionary thump is looking to be mercifully short. This means now is the time for advertisers to invest in their brand, speculating now to accumulate later, and to prepare so that they emerge from this downturn faster, stronger and more profitable than before.

“The winners over the next few years will be the brands who have adopted an agile mindset, able to react quickly and move their program to coincide with external pressures. With measurement and first party data technology likely to be the current priority areas of focus, it’s likely that we will see continued investment in the talent, technology and vendors that can facilitate this.”

For Mindshare UK chief revenue officer Richard Kelly the question is what happens next.

He explains: “While 2023 may not be as turbulent as the recent past, the emphasis will be on working in partnership with clients to navigate sluggish economic recovery and low consumer confidence.

“With the cost-of-living crisis naturally front-of-mind for advertisers and the public, we can’t ignore wider challenges such as rapid evolution of technology, the impact of regulation, and changing consumer behaviour. At the same time, even as belts continue to be tightened, brands need to retain their commitment to issues such as sustainability and inclusion.

“The year ahead will be complex and the focus for agencies must be on supporting brands meet these challenges and continue to drive positive growth.”

Ozone commercial trading director Jacque Chadwick maintains that while inflation, recession, cost of living and the conflict in Ukraine have never been far from the headlines, there is a definite sense of brands being focused on not losing ground to competitors – as evidenced in the 8.8% growth forecast for the year – rather than cutting back on advertising spend.

She continues: “The ongoing growth expected for the ‘Golden Quarter’ is reflective of our experience at Ozone – a period that saw huge demand for premium online display and video solutions.

“Looking at the year ahead, we are excited to see the Advertising Association put trusted, inclusive and sustainable advertising at the heart of their mission – a move that should really benefit trusted, inclusive and sustainable media channels.

“While we’d definitely include Ozone in that, we’re hopeful that this advertiser desire will drive a broader shift in online budgets to the highly attentive media channels built with the reader or viewer in mind, and away from those ‘made for advertising’ sites created purely to extract spend from the market.”

Finally, Alan Agency managing director Michael Richards reckons the seemingly inevitable downturn in 2023 means it has never been truer to say that every penny counts. This is as true for B2B as it is for our B2C colleagues.

He adds: “Our own research shows that 82% of business leaders find B2B marketing boring and repetitive – so now is the time to be bold. Staying safe and doing what you’ve always done just isn’t going to cut the recessionary mustard.

“The WARC/AA figures galvanise our argument that marketers need to invest in work that is electrifying and deeply moving. Injecting emotion and humanity into their clients’ work will sort the wheat from the chaff of 2023.”

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