Following yesterday’s release of the latest Bellwether Report from the Institute of Practitioners in Advertising (IPA), the industry has been quick to share its views on what this means in the greater advertising picture. We’ve pulled together some thoughts below from industry experts.
Key highlights from the report include:
- Marketing budgets were revised up by 0.1% in Q1 2013
- Business confidence rose to the highest level in a year
- Internet budgets grew by 8.9%
“The Bellwether report highlights the requirements for agencies to develop diverse product and services bases for their clients, traditional recessionary stalwarts such as DM experienced decline (3.6%) in favour of softer PR (up 1.8%) and market research tactics (up 1.3%). As agencies we need to be able to move with the service trends to maximise the return for our clients.
“The increase in these softer measures reinforce the report’s more optimistic forecasts for 2014; we are seeing more clients testing more varied communication mixes than ever before. It is unsurprising we are seeing the internet category delivering 8.9% increase. Our clients’ tests are often in the broader digital space, focusing on brand, mobile and connected devices. I am surprised that we are seeing a decline in Search and SEO as it’s an area of focus for many clients as they are becoming increasingly sophisticated in their content, owned and earned strategies.
I believe that we will see further budget increases in SEO, PR and social media as marketers develop a deeper understanding of Generation C* and how they will help businesses connect their content with the consumers. This change will further diversify the communication mix.” (*referenced from Brian Solis: Changing the Way Businesses Create Experiences).
Justin Taylor, managing director, digital, MEC
“The report confirms that internet advertising is one of the most attractive options for marketers’ incremental spend. This is down to three key factors: it’s more targeted, more measurable and more actionable than any other channel. The driving force behind the internet’s appeal is big data. Marketers can use this to define their target audience and ‘protect’ their budget from those less likely to respond positively to their campaign.
“The evolution of internet advertising is driving this further still, with developments such as the launch of Facebook Exchange in 2012 making it even easier for marketers to reach the right people in the right context. This is a phenomenally compelling proposition, particularly in the current economic climate when marketers need more reassurance about the effectiveness of their campaign spend. Other channels will continue to lag behind as marketers become even more sophisticated in their use of big data and analytics.”
Dominic Trigg, managing director Europe, Rocket Fuel
“This quarter’s Bellwether report is far more positive than a lot of brands and agencies would expect given the current economy climate. Such a small predicted drop in ad spend of 0.3% against a 2.7% inflation rate in a time of ongoing economic pressure is actually something the industry should look upon as encouraging.
“Clearly clients are still investing, and investment in many areas is growing: a trend that looks to persist. The key to continued success in the media landscape is measurement: being able to track results and prove the ROI you are delivering. This is especially vital with growing or challenger brands, where this it is vital that the board can see the benefits if they are to reinvest.
“The fact that ‘the internet’ is still growing rapidly at +8.9% is testament to this. Through measurement tools and the correct insight, applied intelligently, marketing results can be directly attributed to campaigns that spread across mobile, video and social media. The overall market seems buoyant at the moment, with marketing budgets not just coming from the CMOs but also the CFOs and FDs as we move to a more programmatic purchasing approach.”
Catherine Becker, chief executive, Adconnection
“Optimism is the order of the day. As precedent shows time and time again, those that invest in a downturn are those that come out the other side in the best of health. The onus is on us marketers to work more collaboratively alongside clients, demonstrating a rich, rigorous and robust understanding of consumers in order to create the most effective campaigns, regardless of channel.
“Naturally, it is more difficult to persuade anyone to invest in brand equity and communications when feeling so financially vulnerable, but the real danger is sacrifice brand investment in favour of a short term promotional boost. It only further pushes consumers towards purchase decisions that rely solely on price.
“The challenge for 2013 is delivering the right creativity and the right content in the right context; taking into consideration the constantly shifting consumer mindset. Value is no longer solely rooted in price, instead it’s in convenience, service and the experience, reflected by our constantly evolving media consumption habits and shopping behaviours.
“Using data analytics, strategic planning and predictive modelling to map out the various motivators and influencers along the purchase decision journey, it’s through this sophisticated level of insight we can deliver focused creativity, higher engagement and true cut-through at a time where consumers are crying out for relevant engagement.
“The shifts in spend continues to reflect the ever-present client concern of measurability. But ultimately, clients are under enough pressure of their own to protect their own budgets in an economic downturn and it’s our role to work with them to identify the value proposition within the market, and drive that forward together.”
Sarah Todd, chief executive, G2 Joshua
“In the current environment of economic uncertainty, marketers are, unsurprisingly, continuing to invest in marketing channels which generate trackable returns, and the latest IPA Bellwether report reflects the growing understanding within the advertising industry that it’s not just search that delivers on ROI. Increasingly advertisers are seeing the impact that a cleverly executed, targeted and engaging display campaign can have on their brands, and we can see this reflected in the relative lack of growth in search and SEO spend. Coupled with this is the growing sophistication of tracking and measurement tools for display advertising which allow advertisers to prove the value of dynamic online campaigns over direct response campaigns.
“If marketers are going to gain cut through with consumers in yet another challenging and uncertain year it’s crucial that they understand the mood of their consumer. As purse strings tighten the perception of what is valuable shifts from ‘things’ to ‘human connections’ and it will be those brands that use flexible online channels, that offer them the ability to talk to their audience in a personal way and build a valuable relationship, that will succeed.”
Minal Saigal, managing director EMEA, Essence