The advertising and marketing industry appears to have fought off the prophets of doom for another quarter, with the latest IPA Bellwether report showing the sector is still growing, albeit at a snail’s pace.
The report draws its own conclusions, but what about the wider industry? Decision Marketing dives into its contacts book to gauge opinion.
What’s Possible Group managing director Patrick Mazzotta reckons the theme of the report is mixed; lots more optimism than some might expect, including a large portion of businesses increasing marketing spend for the coming year.
However, he adds: “When you see a single factor for an agency tagged as a threat and opportunity (i.e. interest rates for the financial services sector) you start to get a sense of what we’re up against for 2023. That duality will be formative for marketers this year.
“I think responsible agencies will self-identify by being able to bring effective opportunities to the clients looking to increase marketing spending while simultaneously digging those moats for the clients looking to reduce budgets.
“The cost of living crises rears its head again and will very likely be a recurring theme throughout the year. We can expect this will have a varying effect across the population, and I expect to see companies who are more experienced in targeting segments within their customer-base will weather this year best.
“With a slight downward revision on market research spending, there’s an interesting opportunity for those who hold out on intelligence spending and direct that energy into boosting effectiveness across the board. The law of averages applies here, and those who buck the trend are likely best positioned to see and seize opportunities to outperform competitors.”
Meanwhile, Matt Andrew, UK managing director and partner of global data science consultancy Ekimetrics believes that in the face of pessimistic expectations for the economic outlook, it is refreshing to see so many marketers planning to increase spend.
He adds that while some of this may be driven by rising costs rather than more marketing, it is essential that marketers are equipped to optimise their spend and impact. Consumers will need strong reasons to part with money on discretionary spending and brands will need to go further to stand out, Andrew maintains.
He continues: “Making the organisational transition from attribution to unified, triangulated MMO can help businesses make confident decisions at every level, from strategic budget direction to creative briefs and campaign optimisations. For example, with media inflation and weakening adspend, it’s important to ensure tighter targeting does not jeopardise long term activity or seeking new audiences, as this ultimately results in decreasing efficiency and saturated markets.
“Further, continuing to innovate, such as through new approaches to customer centricity or creative optimisation, could provide significant gains and help sustain commercial success.”
VaynerMedia head of strategy EMEA Allan Blair comments: “It’s great to see organisations finally understanding the value of robust marketing investment as well as mixing both brand and performance marketing. A smart balance of the two can help to insulate you and/or supercharge your performance in an unpredictable economy. That is what businesses are looking for and we wholeheartedly believe it’s achievable.
“A consumer-centric, social-first approach to advertising can give brands an advantage. It allows them to deeply understand what consumers want and respond to it in real time. You can then continue to learn and optimise the content, or as we call it, “find right” and make more powerful, cost-effective work.
“Hopefully, we see a growth in ‘brandformance’ as a concept in 2023, as people start to learn the importance of merging the two.”
For Anastasia Leng, CEO of data platform CreativeX, the latest quarter of overall growth signals the value marketing delivers, even during uncertain times.
Even so, she reckons that with a recession looming, the real question is whether marketers are maximising the impact of their budgets. adding that research suggests not: high pockets of wastage continue to lie dormant in the creative, the majority of which (70%) isn’t set up for success and has a low “creative quality score”.
Leng explains: “To stretch their budgets to their full capacity, marketers must revisit age-old processes, and creative production and measurement are at the top of the list. Brands are sitting on reams of creative data, thousands of data points derived from their historical campaigns.
“It’s a powerful yet largely untapped asset class, and first-movers like Nestle, Heineken, and Mondelez have started publicly talking about the impact it’s making on everything from brand lift to sales. Creative data has many applications that give marketers an objective and scalable yardstick to measure everything from the creative quality of each ad produced (which is statistically tied to lower CPMs) all the way to the overall frequency of asset activation and reuse, which can unlock budget being spent on duplicative content creation.
“Whether we like it or not, change is gradually being forced upon us. We can wait for it to arrive in its full glory to begin the creative transformation work we know we need to do, or we can start early and get ahead.”
The Trade Desk UK vice-president Phil Duffield is another who sees the opportunity for a data-driven approach to make its mark. He explains: “Data will be critical for any savvy marketer trying to prove the continued ROI of marketing to their CEO and CFO. That means tapping into an omnichannel strategy and unleashing the potential of channels such as CTV, audio and retail media, while measuring the impact of every pound.
“With today’s report adding to speculation that recession is on the horizon, marketers should remember that those who maintain connections with consumers during a downturn reap the long-term benefits.
“Leaving the tech to crunch through millions of data points allows marketers to do what they do best – creating meaningful messages that build and retain customer loyalty. Smart use of such tools will put marketers in a strong position to capture the opportunities that lie in the year ahead.”
Treasure Data director of marketing EMEA & India Andrew Stephenson concurs: “As we look ahead to core consumer milestones like Valentine’s Day and Easter, first-party data – and knowing how to get the most out of it – will prove key to marketers’ ability to accurately and sensitively land key messages, as well as deliver a quality customer experience and continue to prove the value of marketing to business growth.
“As the next quarter likely provides marketers with another sink or swim moment, it’s vital that brands ensure that they have a reliable first party data strategy in place, not only to make efficient use of their budget now but also to make strategic marketing decisions to insulate themselves against whatever is to come next.”
It is a theme that Delineate chief executive Ben Leet is also keen to push, saying as consumers become increasingly discerning amid tightening incomes, marketers must rely on data-driven insights to make quick and informed business decisions now more than ever. He adds: “This will help them optimise their resources so they can navigate an increasingly unpredictable environment and act impactfully.”
However, Leet does reckon this robust outlook for UK marketers should be taken with a pinch of salt. He concludes: “Financial prospects remain bleak at both the industry and company levels, though they are improving. Marketers need to utilise their consumer data to enhance their ability to react and make smart decisions.
“Brands that can effectively track their audiences’ wants and needs will be better positioned to maintain a competitive advantage and avoid long-term reputational damage.”
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