The Bellwether report, released this week, shows that for the first time since Q4 2019, marketing budgets are expanding. Budgets are actually seeing the strongest upwards revisions since Q1 2019. It seems businesses are preparing for economic recovery.
At both industry and company level, financial prospects are remaining positive, proved by the fact that adspend forecasts are revised as being higher for 2021.
What do the experts have to say about the findings?
Commenting on the latest survey results, Paul Bainsfair, IPA Director General, says: “These positive results mark the end of five quarters of continuous cuts. For revisions to UK marketing budgets to bounce back so quickly and strongly, following their nadir at the height of COVID-19 restrictions in Q2 2020, is very welcome news and corroborates our Bellwether prediction for a V-shaped recovery. As the vaccination rollout continues at pace and UK plc gears itself up for growth, we encourage companies to ramp up their advertising to make the most of post-lockdown, pent-up consumer demand.”
Commenting on the latest survey results, Joe Hayes, Senior Economist at IHS Markit, says:
“The economic data that has emerged in recent weeks tell us that UK businesses have embarked on what we hope will be a short road to recovery. The Q2 2021 Bellwether Report was no different, and the strongest upward revision to total marketing spend since the beginning of 2019 is a great indication that firms have grown confident towards economic prospects. We hope that this is just the beginning and that the end of lockdown restrictions, further improvements in vaccination rates and buoyant consumer spending will support even stronger growth in marketing spend in the second half of the year.”
How has the industry reacted?
Alison Harding, Vice President Data Solutions EMEA, Lotame said: “It is encouraging to see signs of growth in the UK forecast for adspend in 2021. At the same time it is important that marketers and media owners future proof their businesses against the death of third-party cookies in 2023.
“Although Google has delayed the deprecation of the third-party cookie until 2023, around 40% of the global market has already done away with them (Safari and Firefox). Now is the perfect time to start or continue testing identity solutions, as you’re able to compare cookie vs. non-cookie environments. Despite Google’s delay in cookie removal, identity testing should be on top of everyone’s priorities, and it would be naive for the industry to slow down any time soon. A wait-and-see approach is a recipe for disaster. Marketers and media owners should use the additional time and spend to learn, test, and determine the best solutions for their business.”
Nick Morley, Managing Director, EMEA, Integral Ad Science (IAS) commented: “It’s exciting to see that UK marketing budgets and confidence levels across the industry have increased in the latest IPA Bellwether report, following vaccination roll-outs and the easing of lockdown restrictions. Looking ahead, more advertisers and publishers have an opportunity to deploy strategies that optimise their digital media quality.
“With the rising importance of contextual targeting in marketing strategies, this is one major trend to watch. The pandemic has left a lasting impact on consumer habits, with the shift to a digital-first lifestyle, and brands should adopt the latest technology to control the context of their ad campaigns. In a post-pandemic landscape, advertisers are looking to engage with reinvigorated consumers via safe, suitable, and relevant ads. This will be key for brands to capture long-term consumer interest and spending.”
Simon Stone, GM EMEA, LoopMe said: “With strong signs of recovery for the UK ad industry, it’s important for marketers to maintain their ability to be agile and prepared for changing environments, and consumer behaviour. While a positive outlook is welcomed, we’re still tackling a post-IDFA world, with other challenges on the horizon that can decrease targeting capabilities.
“To help increase long-term campaign success in an increasingly busy environment, brands should be looking at building their insight and predictive capabilities with real-time infrastructure, in a privacy compliant way. Now is the time for marketers to be adopting a performance-focused approach where measurement is tied to outcome-centric KPIs from the outset.”
Harriet Durnford-Smith, Chief Marketing Officer, Adverity said: “The findings echo the positive sentiment we’re hearing from partners every day as the country prepares to open up following a successful vaccination campaign. However, that’s not to say marketers are abundant with cash all of a sudden – the same industry challenges remain and budgets are under intense scrutiny, with growing pressure to find new ways to measure performance and ROI that’s not reliant on third-party cookies.
“Marketers will need to ensure their spend remains accountable and understand how much each of their channels contribute to overall revenue. So while this remains a positive story – and a welcome one – we must keep working to find sustainable long-term solutions so that ad spend forecasts can continue to increase well into the future.”
So, with all this in mind, agility is clearly key at the moment, when everything truly does seem to be going back to ‘normal’. Brands must focus on being reactive and strategic when navigating the current marketing climate which, for the first time in five quarters, seems to finally be becoming stronger.