Bellwether reaction: Advertisers told to hold their nerve
The uncertain economic and political climate has continued to weigh on industry financial prospects, according to the latest IPA Bellwether report, with confidence at its lowest level in four years.
Here, senior figures from News UK, Mindshare, Sociomantic, Bloomberg, Sky Media, REaD, Impact Radius, Exterion, Capture, Zenith and Jaywing reflect on what the results mean for the industry.
Chris Cardew, head of strategy, Mindshare
The positive story told by the Q4 Bellwether is a reassuring one and proves that despite these difficult economic and societal times, business and brands are continuing to weather the storm and maintain consumer confidence, albeit with a level of cautious optimism.
As a whole, it's been a good quarter for media and marketing. For the majority of the big retailers, such as M&S, Christmas delivered bumper results. This was supported by high profile marketing campaigns and investment, demonstrating their confidence in consumer spend. Similarly, Amazon continued to change the game with its service proposition, also supported by significant marketing investment.
While digital continued to see growth, TV ad spend was sustained proving the value and importance of the medium in the modern day media mix. On the social side, despite the fake news drama, Facebook continued to sweep up the lions share of social budgets.
This year it is likely we will see brands sustain marketing investment as they seek to provide a much needed comfort blanket for the uncertain times that lie ahead.
Alex Wisch, TMT analyst, Bloomberg Intelligence
Despite doubt over the last few months and what we would expect to be a much larger decline in ad spend with businesses being more careful, the IPA Bellwether report shows UK advertising has held up well so far, although a significant downturn expected through 2017.
This is likely to accentuate long-term changes in trends in the allocation of media expenditure. In particular, more print to digital migration; and within digital, more desktop to mobile migration, with emphasis on social advertising, which is perceived as being able to deliver better value for money.
In terms of sector, main media advertising has taken a surprising turn, beginning to recover budgets in Q4, compared to the decline in Q3. Regardless of this positive quarter, with the uncertain terms of the ongoing proceedings of Article 40, investment is likely to be delayed, while consumer spending is forecast to slow.
Jon Cano-Lopez, chief executive, REaD Group
It's positive to see the year end on a high in terms of overall marketing spend, however, it's disappointing to see direct marketing budgets have not followed this upward trend. In such a competitive market, especially in uncertain times, marketers must work even harder to ensure that they are forging profitable relationships with consumers; something that is achieved by adopting a fully multi-channel approach, maximising the best opportunities to target customers in the most lucrative way.
The marketing landscape has changed dramatically in recent years. Today, where relevant, a clever piece of direct mail has radically different cut through than it did in years gone by. The benefits of these channels should not be overlooked.
Bellwether attributes its downward projections in 2017 to uncertainty over the impact of Brexit negotiations, despite the fact that the industry has remained resilient throughout 2016. Businesses with concerns around the impending General Data Protection Regulations should seek expert advice on compliance to ensure that this does not hinder their progress in the coming year. It would be good to see marketers holding their nerve during this period, reflecting confidence in consumer spending and remaining optimistic against these predictions.
Marketers should use this as an opportunity be brave and seek to gain advantage at a time when others may be treading cautiously. Those that do invest in the marketing mix will reap the benefits of a more coherent strategy and more valuable customer relationships.
Shaun Gregory, chief executive, Exterion Media
Given recent events - and of this week - it's completely understandable that there is going to be market uncertainty over the next few months, and that this may well have a negative impact ad spend over the course of 2017. But we have a strong and resilient industry, and the expectation that 2018 will see more sustained ad spend growth reflects this.
What's clear is that we'll see a continued transformation of the industry, with most media owners recognising the need to digitise their business. Only then can you offer seamless experiences for your customers and compete with the likes of Facebook and Google.
Jonathan Barnard, head of forecasting, Zenith
The latest Bellwether figures showed an increased engagement with mobile advertising, with marketers upping their spend in the area by 3.9 per cent. Mobile continues to play such an important role for brands to engage with their audiences, so this is a good sign considering the previous report predicted a decline of 2.6 per cent.
Indeed our own figures predict that mobile advertising will overtake desktop in 2017, and mobile will likely account for 60 per cent of all internet advertising by 2018.
All brands need to become mobile first in their communications to ensure that they continue to reach consumers in an increasingly digital and mobile landscape, and that they consider the full mobile ecosystem, such as smart watches and activity trackers, to do so.
Sue Todd, CEO Magnetic
It's heartening to see that marketers are shrugging off the uncertainty caused by geopolitical factors and have revised their adspend upwards. The growth in 'main media spend', which is that of established media, is particularly pleasing to see, as it demonstrates that this growth is spread across the media mix rather than purely fuelled by the rise in search and social.
It suggests both an established media in a healthy position, combined with a continuing focus on innovation. Strong examples of this can be seen in the magazine sector with initiatives such as Empire Live, The Esquire Townhouse and Cosmopolitan #FashFest which allowed brands to work with the magazine brand in an entirely different way.
Alongside these big ticket ideas, small scale innovations and creativity are showing the real value of established media.