By R. Larsson, Advertising Week
Pointing to surprisingly fair weather, the IPA Bellwether report has revealed better-than-expected results for Q4 and potential cause for temporary celebration, despite ongoing economic uncertainty.
Key takeaways from the report focused on the necessity for privacy-centric visions and the continued performance of video and online media – a key driving force behind the unexpected growth, with respective figures of 13.7% and 6.3%. The report also uncovered marketers’ desire to remain competitive, with 45% maintaining their budgets in the new year and their focus on optimising media strategies.
Here’s what the experts had to say:
Alex Khan, EVP Global Partnerships, Amplified Intelligence
“The biggest video spending surge since 2020 shows that brands determined not to lose market share and increase one-to-one engagement are chasing harder after cord-cutting, mobile-centric, digital-first audiences. As more viewers move towards online video and CTV – and away from linear – we can expect further investment flows in the same direction. Like any budget boost, however, this shift brings a greater need for justification; especially in the still-strained post-Covid economic climate. Marketers under pressure to demonstrate effective budget use will need micro measurability of ROI, alongside deep viewer insight to drive optimal targeting accuracy. Achieving that is going to mean ensuring cohesive understanding of interaction by applying assessment approaches that harness real human attention data and deliver equitable insights at the channel, platform, ad slot and performance level – not just time-in-view proxies.”
Hitesh Bhatt, Senior Director, CTV/OTT – EMEA, PubMatic
“Video ad spend is set to catch up with viewer preferences following its phenomenal growth in 2022’s final quarter, as seen in this latest IPA report. Two interlinked factors are fuelling this upward trend – greater inventory availability and competition-driven innovation.
“New premium inventory is opening up with Netflix, Disney+ and Warner Bros Discovery all adopting – or planning to adopt – ad-funded models. Alongside this, established broadcasters are expanding their remit – for example with ITV replacing its catch-up service with a dedicated streaming platform, ITVX. The UK premium video market continues to be home to strong competition, which will motivate media owners to innovate their offerings. In turn, we’ll likely see the development of more effective targeting and measurement techniques as media owners aim to address advertisers’ demands and further carve out their share of video ad spend.”
Ben Cicchetti, VP, Corporate Marketing, InfoSum
“In an increasingly competitive market in which ad budgets are squeezed, marketing teams are under increased pressure to drive results and demonstrate value. Brands with clear data collaboration strategies and strong direct media partnerships will have more opportunities to reach unique audiences and tap into growing formats – such as video, which outperformed all other segments in Q4. The result will be better return on ad spend (ROAS).
“It’s also essential to avoid costly missteps; consumer awareness of privacy issues is higher than ever before, so marketers must be certain that valuable data assets are protected or risk both regulatory and reputational repercussions. The technology platforms they use must put privacy at the centre of everything, while allowing them to maximise opportunities.”
“The upwards revision to online marketing budgets reflects current business objectives: deliver value, maximise revenue and sustain market share. Despite the challenging economy, marketers must not lose out to competitors and are therefore investing in the channels that reinforce their connections with audiences and support laser-focused targeting, such as mobile and in-app marketing.
“Amid a deceleration in online marketing’s growth (+9.3% vs. +6.3%), we’ll see more marketers shift their focus to quick conversions and engaging audience segments with a high lifetime value as, in the months ahead, making every penny count will be paramount.”
Raphaelle Tripet, MD EMEA, TripleLift
“As brands look to consolidate their budgets, it is no surprise to see that, once again, video is accounting for an increasing amount of spend. From the ever-widening reach of CTV to social platforms like TikTok, these environments are giving marketers the opportunity to reach highly-engaged consumers with creative and innovative content.
“With granular targeting and increased brand safety solutions making video even more appealing, marketers need to be ready to employ a media strategy that is data-driven, versatile and scalable if they are to optimise their spend in these increasingly competitive channels.”
Ben Putley, CEO and Co-Founder, Alkimi
“The current industry mindset presents a prime opportunity for marketers to leverage new technologies and channels to gain a competitive edge by reaching their next cohort of buyers in ways they are familiar with.
“Companies like Nike and Starbucks are already leveraging Web3 to engage with their audiences, reward loyalty and drive sustainable revenue. Additionally, Web3’s improvements to the underlying infrastructure have significantly reduced energy usage allowing for growth without compromising on net zero commitments.”
Tony Marlow, CMO, LG Ad Solutions
“With the increasing prevalence of connected television in UK households, it’s no surprise that video budgets saw a record upward revision. This rapidly growing channel is giving marketers the scalability of a first-screen advertising experience but with granular targeting capabilities.
“Viewers are increasingly becoming very price sensitive for their TV content and are now embracing free ad-supported streaming television. Not only is this great news for consumers who get the content they want for free but it is also positive for marketers who are seeking to make meaningful connections with their respective audiences. Advertisers no longer need to choose between being a performance marketer or a brand marketer, ad-supported CTV allows them to be performance storytellers.”
Lucia Mastromauro, Managing Director, Acceleration UK
“The report’s findings that marketers are expecting to boost growth through digitalisation stirs up interesting questions around privacy and Chrome’s deprecation of third-party cookies. Marketers are rightly experimenting with other means of measurement and targeting, whether within the Google ecosystem, other walled gardens, or via independent solutions. Buyers should be striving to evolve how they use technology solutions to suit the needs of their business in an ever evolving privacy and policy ecosystem. The big question to tackle is how will they break down the silos in data from multiple and disparate ID solutions? Brands will need a robust strategy to seamlessly bring together this fragmented data.”
With Q1 2023 already underway, there are hopes for continued growth, yet ongoing challenges remain as the marketing sector remains sensitive to sudden shifts. Ensuring success means optimising targeting methods, upholding consumer privacy and seizing the benefits of video’s growth with innovative and engaging content.