{"id":5287,"date":"2023-07-23T14:17:03","date_gmt":"2023-07-23T18:17:03","guid":{"rendered":"https:\/\/advertisingweek.com\/aw360\/2023\/07\/23\/ipas-q2-outlook-better-than-expected-again-but-what-does-the-data-mean\/"},"modified":"2023-07-23T14:17:03","modified_gmt":"2023-07-23T18:17:03","slug":"ipas-q2-outlook-better-than-expected-again-but-what-does-the-data-mean","status":"publish","type":"post","link":"https:\/\/advertisingweek.com\/aw360\/news\/ipas-q2-outlook-better-than-expected-again-but-what-does-the-data-mean\/5287\/","title":{"rendered":"IPA\u2019s Q2 Outlook: Better Than Expected (Again), but What Does the Data Mean?"},"content":{"rendered":"

After another apprehensive quarter for the advertising industry, IPA Bellwether findings show resilient growth, including modest net Q2 budget uplift of 6.4% and revised forecasts that ad spend will only fall by 0.6% this year.<\/em><\/h2>\n

Amid economic uncertainty and the threat of rising interest rates, gaining accurate insight into how the sector is faring is vital to decision makers as they plan for the rest of the year. Growth in video ad spend highlights the industry\u2019s ambition to capture audiences through engaging and creative formats, while the growth of smart tech \u2013 such as generative AI \u2013 offers unique opportunities for businesses to increase efficiencies.<\/p>\n\n\n\n\n\n

We spoke with industry leaders across the technology and media space who offered insights into the recent spending shifts.<\/p>\n\n\n\n\n

Video is on the rise – but how can marketers make the most of the creative format?<\/strong><\/h2>\n

\u201cIt\u2019s no surprise that video budgets have continued to see growth for marketers, with nearly every UK household reachable via Connected TV (CTV) streaming platforms,\u201d comments Edward Wale<\/strong><\/a>, Vice President, Europe at <\/strong>LG Ad Solutions<\/strong><\/a>. <\/strong><\/a>\u201cBut with increasing financial pressure causing audiences to cut subscriptions \u2013 and the ongoing writers and actors strike putting a question mark over new content \u2013 marketers will need to get creative to keep up with shifting audience habits.<\/p>\n\n\n\n\n\n

\u201cBy embracing the granular measurement that CTV provides, marketers can think outside the box with their CTV strategy and reach their audience no matter what or where they\u2019re watching.\u201d<\/p>\n\n\n\n\n\n

Raphaelle Tripet<\/strong><\/a>, Managing Director, Demand International at <\/strong>TripleLift<\/strong><\/a> sees the uplift in video spend as a great opportunity for businesses to increase ROI and engagement. \u201cWhile the economic climate has encouraged the majority of brands to focus on sales promotions for the second consecutive quarter, it is promising to see investment in video growing. Despite a slower rate of growth in media spend overall, continued investment in video indicates that brands are prioritizing high quality and engaging formats to target their audiences.<\/p>\n\n\n\n\n\n

\u201cThat being said, with ad spend set to be hit by continued economic pressures for the rest of this year and into 2024, marketers will be expected to drive not just engagement, but performance and ROI. As such, native video formats are seeing a resurgence as formats that can deliver on brand KPIs across the funnel.\u201d<\/p>\n\n\n\n\n\n\n\n

Creativity is also on the rise. Nick Morgan<\/strong><\/a>, Founder & CEO at <\/strong>Vudoo<\/strong><\/a> highlights the importance of engaging with consumers in a personalized and memorable way: \u201cCreating personalized experiences delivered through these channels can enable marketers to achieve increased brand awareness, purchase intent and ROAS.<\/p>\n\n\n\n\n\n\n\n

\u201cBy introducing interactive elements to video, brands can tell tailor-made stories that resonate with audiences and streamline the route to conversion, even empowering them to purchase in the moment. “<\/p>\n\n\n\n\n\n\n\n

Looking ahead, Nick Pinks<\/strong><\/a>, CEO at <\/strong>Covatic<\/strong><\/a>, comments: \u201cBetter audience targeting will be a key focus, with brands looking to reach consumers through contextual ad placements and by having access to more addressable audiences.<\/p>\n\n\n\n\n\n\n\n

“The continuing growth of video spend reflects a shift towards higher quality, engaging inventory, as marketers seek to make an impact with the budgets they have. Emergent platforms such as CTV will benefit from this, as they provide access to a growing number of FAST channels, and can fulfill the need for high-quality audiences. Looking to the future and beyond paywalls or sign-ins, which can inhibit user numbers, we predict that new solutions will open up addressable audiences for brands and further accelerate growth and new revenue in the CTV space.\u201d<\/p>\n\n\n\n\n

Future growth is tied to smart tech, especially AI <\/strong><\/h2>\n

The findings report a rise in revised budgets for sales promotions from 8.8% to 13.4% in the last quarter, the highest ever recorded by IPA. However, Pierre Naggar<\/strong><\/a>, Director at <\/strong>MINT<\/strong><\/a>, reminds businesses of the importance of planning for long-term gain, not short-term results. \u201cGiven the record-breaking success of Prime Day this year, the largest in Amazon\u2019s history, it\u2019s understandable that sales promotions remained an attractive strategy for brands for the second consecutive quarter. But while promotions may yield short-term results, research shows that ROI is 45%<\/a> lower when prioritizing promotions over media.<\/p>\n\n\n\n\n\n

\u201cBrands need to weigh the benefits of immediate goals with long-term growth. Investing in technologies that provide an understanding of which channels perform best will allow them to reallocate budgets towards those that can provide better metrics and ROI.\u201d<\/p>\n\n\n\n\n\n\n\n

Armed with its unique consumer data, Sarah Rew<\/strong><\/a>, AVP Marketing from <\/strong>LoopMe<\/strong><\/a>, highlights how AI could offer a leg up to businesses striving to deliver optimized content to consumers, while under budget pressure. \u201cWith 58%<\/a> of UK consumers valuing low prices the most when visiting a supermarket, it\u2019s no wonder sales promotions budgets are currently so high, as businesses turn to attract and support consumers during the cost of living crisis.<\/p>\n\n\n\n\n\n\n\n

\u201cUnsurprisingly, AI is considered an opportunity to enhance efficiency and effectiveness in media and marketing efforts. AI predictive modeling will only become more prominent in delivering optimized content while taking tightened ad budgets into account, and is equally essential in ensuring ad content and delivery matches consumer sentiment.\u201d<\/p>\n\n\n\n\n\n\n\n

Talking to the wider challenges resulting from a declining economy, Toby McAra<\/strong><\/a>, Chief Revenue Officer at <\/strong>Making Science<\/strong><\/a>, also acknowledges the advantages that AI has to offer to businesses that find digital transformation intimidating. \u201cIt\u2019s encouraging to see an upward revision to overall marketing budgets despite marketers facing increased ad spend scrutiny and additional challenges such as skills shortages and higher wage bills. Technological innovation should therefore still be a top priority for brands as they strive to stay competitive and operate effectively in a turbulent economy, and it\u2019s great that respondents highlighted tech advancements as an area of opportunity in the report.<\/p>\n\n\n\n\n\n\n\n

\u201cBut, while businesses and marketers can now access rapidly advancing technology, adapting their models for transformation can often seem daunting. While advanced tools such as AI offer marketers better operational efficiency and increased market understanding, they must be supported by large amounts of data and rigorous handling procedures to underpin the tools\u2019 success.\u201d<\/p>\n\n\n\n\n\n

Emma Lacey<\/strong><\/a>, Senior Vice President EMEA, <\/strong>Zefr<\/strong><\/a> says: <\/a>\u201cThe fact that video budgets have not only remained resilient during recent economic instability, but consistently grown, is a testament to the value that marketers are finding in this format. Both in walled gardens and on the open web, the highly engaging nature of video is enabling brands to cut through and reach their target audiences in highly creative and effective ways.\u201d<\/p>\n\n\n\n\n\n

However Lacey also offers a word of caution on the risk of wasted spend from misplaced ads through AI: \u201cIncreased spend can lead to increased chances of wastage. The explosion of generative AI, for example, has increased the possibility of brands appearing next to unsuitable content and misinformation. Not only could this wasted spend be used more effectively elsewhere, but misplaced ads can damage consumer perception of a brand. To truly maximize video budgets, marketers need to embrace tools from either the platforms or third-party providers that ensure more suitable ad placements.\u201d<\/p>\n\n\n\n\n

Contextual placement and reliable measurement remain crucial <\/strong><\/h2>\n

As ever, businesses are on the lookout to gain competitive advantage. <\/strong>Evgeny (Ev) Popov<\/strong><\/a>, Executive Vice President & General Manager, International at <\/strong>Verve Group<\/strong><\/a>, <\/strong>reminds decision makers that pulling budgets back too far allows other businesses to garner more visibility with consumers. Not only that, but Popov prompts marketers to ensure they are accurately targeting audiences with contextually relevant campaigns, and not wasting budget with mis-aligned messaging.<\/p>\n\n\n\n\n\n

\u201cCompanies pulling the reins back afford opportunities for other companies to expand their presence. Within this broader context, Google\u2019s coming deprecation of third-party cookies demands action now to maintain addressable capabilities and ensure budgets continue to drive return on investment after the transition. Marketers that take the chance to adopt contextual solutions can benefit from advancements in AI and machine learning that enable precise content placement and maximum consumer engagement.\u201d<\/p>\n\n\n\n\n\n\n\n

With no \u2018one-size-fits-all\u2019 marketing strategy, Alex Khan<\/strong><\/a>, Executive Vice President, Global Partnerships at <\/strong>Amplified Intelligence<\/strong><\/a>, notes how investment appears staggered across the industry. \u201cAs the impact of inflation continues, we\u2019re seeing an ongoing pattern of mixed investment. There\u2019s been larger (but still relatively moderate) increases for key channels, such as video, and smaller boosts across other environments, such as online advertising. While marketers\u2019 approach to hedging their budgeting bets makes certain sense, it\u2019s also fuelled by the assumption that current thriving environments will always drive the best outcomes. Growing understanding of how human attention works, however, shows that this isn\u2019t necessarily true.<\/p>\n\n\n\n\n\n\n\n

\u201cBrands looking to generate the greatest ROI need to ensure media planning is guided by accurate predictions of how much active attention each campaign is likely to drive for their particular target audience, across any given environment. In other words: future spending strategies need to be set from accurately informed decisions using proven human insight data, not speculative impression level only data.\u201d<\/p>\n\n\n\n\n\n\n\n

Keeping ad spend under tight control is understandable in uncertain times. But that doesn\u2019t have to mean aiming for just \u2018good enough\u2019 and counting anything better than that as a bonus. As industry leaders point out: investment quality is what matters, not quantity. Rapid advances in audience data management and AI modeling have huge scope to help marketers maximize any budget. Those who take the leap of tapping emerging innovations to bolster ad impact will stand the best chance of getting just what they expect next quarter: solid returns on smart insight-driven strategies.<\/p>\n","protected":false},"excerpt":{"rendered":"

After another apprehensive quarter for the advertising industry, IPA Bellwether findings show resilient growth, including modest net Q2 budget uplift of 6.4% and revised forecasts that ad spend will only fall by 0.6% this year.<\/p>\n","protected":false},"author":7,"featured_media":5288,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","editor_notices":[],"footnotes":""},"categories":[1],"tags":[3],"topics":[2],"class_list":["post-5287","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-brands-marketers","topics-editorial"],"acf":[],"yoast_head":"\nIPA\u2019s Q2 Outlook: Better Than Expected (Again), but What Does the Data Mean? | AW360<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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