‘Optimistic, but we’re not out of the woods yet’: IPA Bellwether analysis

Rik Moore, head of insight, strategy and planning, The Kite Factory

Considering that much of the North West of England was in lockdown at the start of the quarter, the circuit breaker 4-week lockdown (which lasted from the 5 November to 2 December) and the heart-breaking but necessary quick move into Tier 4 in London and the South East on December 20, it’s not surprising that marketing budgets continued to decline in Q4 last year. And that’s before we even mention Brexit.

But whilst there were curveballs, the preceding two quarters did teach marketers to be both cautious and agile, so there were lower levels of shock and surprise, and therefore a more consistent spend and less deviation from planned budgets when it came to digital.

The announcement of not one but two viable vaccines during the quarter also gave marketers greater confidence in a light at the end of the tunnel, and while the Q4 IPA Bellwether may look bleak on first reading, it tells a tale of extremely cautious optimism long term as we try our best to navigate and survive the situation in the short term.

Danny Donovan, CEO, Mediahub UK

So, from a media spend perspective there is hope. Although we’ve said that before. Assuming no great economic banana skin emerges from the still-being-written pages of the Brexit deal, and the vaccination programme goes smoothly, let’s be optimistic. Let’s hope the hardest hit media sectors recover quickest and that the recovery means a return of the huge amount of talent which was displaced by this pandemic.

But unfortunately, some media have changed forever. What will the cinema slate be like in H2 2021 in the face of Netflix’s billions, and what will the restrictions and audience numbers be? Elsewhere Global’s P&L has already been ravaged by the huge commitment to TFL. With fewer commuter journeys, that deal will be a continuing drain.

More broadly has the die been cast and the balance of media behaviour and media spend been irrevocably shifted in favour of social and other digital channels in spite of the political hot water they continue to boil themselves in. That of course depends on the consumer.

Will those 10 years of change in 10 weeks we hear so much about be reversed when the world finds its freedom again, and will advertisers and media planners take notice? We shall see.

Philippa Snare, senior vice president, EMEA, The Trade Desk

Today’s report demonstrates that we’re not out of the woods, just yet. The impacts to budget cuts are still being felt as our industry absorbs the ongoing effects of the pandemic. For marketers, this means adapting to the rising pressure of doing more with less, while developing new strategies and executing quickly to respond to changing consumer behaviour.

Marketers will need to maximise every pound spent by focusing their investment on the channels that consumers gravitate most towards, and those are Connected TV, mobile and digital audio. Marketers who do, will also reap the benefits of the ability to apply data insights and measurement in more sophisticated ways. Every buying decision will be expected to drive tangible results and marketers deserve to have visibility of those metrics.

As a result, we can expect to see industry partners held to higher standards of transparency this year. I hope and believe that we’ll be left with a healthier, fairer advertising ecosystem, in the near future.

Tom Laranjo, managing director, Total Media

Though the promise of mass vaccinations may lie behind rising confidence, according to the latest research by YouGov, likely vaccination uptake ranges wildly from 80% in the UK to 39% in France. With herd immunity requiring between 75%-90% adoption, it seems highly probable that the Covid pandemic will rumble on and our “normal” behaviour will be restricted long in 2021 and beyond. Sadly, talk of “post-pandemic” may be premature.
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The continued limitations placed on our movements will further accelerate behaviours such as the growth in online shopping and the rise of home working, both of which look likely to continue to grow, requiring significant operational adjustments for businesses and brands alike.

Frustrated (44%), Stressed (42%) and Bored (36%), according to YouGov, these are the current 3 dominant emotions in the UK at present and they have been stubbornly in the top 4 emotions since March 2020, with happiness seeing a sharp decline in December. Though a return to even cautious optimism is highly encouraging, this rising confidence may not be reflected in our communities and businesses seem likely to need to weather and adapt to another tough year.

Justine O’Neill, director, Analytic Partners

The latest IPA Bellwether report suggests a recovery in ad spend in the next financial year, which should help instil confidence in marketers. The rollout of Covid-19 vaccines and immunisation programmes – and with that, the potential for market recovery – provides marketers with the glimmers of hope they need right now. Continued investment in marketing during downturns has proven to be effective in growing market share and brands should continue to hold their nerve and invest through the final months before the new financial year.

Looking ahead, the latest Bellwether data suggests there will be increasing investments in digital services and ecommerce in Q1, providing brands with opportunities to maximise effectiveness of marketing spend. Until then, implementing an agile marketing strategy, backed with real-time data, allows brands to gain quick insight into the success of their campaigns, enabling them to act fast with shifts and trends on the market.

Additionally, scenario planning will give brands the framework that enables them to better manage the uncertain conditions that most industries face today, putting them at an advantage to plan strategically for the future.

Andras Vigh, managing director UK, FirmDecisions

While none of us will look back on 2020 with fondness, we must recognise the knowledge it gave us. The past 10 months have been a learning curve for us all. For some, the decision to cut adspend last March was the only option – especially considering the future was very unclear – and we continue to see the impact of those decisions today. Now, with more understanding of the pandemic, companies are reviewing their actions.

Where spend continued, there were potential compliance issues within the industry. Many were put on furlough overnight, there was a serious shortfall in revenue for all partners and working remotely and changes to service levels all played their part.

There are definite signs of green shoots on the horizon – also recognised by most advertising forecasts for 2021 and beyond. The new now is the norm and that creates innovation and tenacity from all players in the marketing ecosystem.

With the government rolling out vaccines, the optimists among us are looking to the future and hopes of normality returning, predicting growth and recovery in 2021 (vs 2020) and a more real growth recovery in 2022.

Sophie Wooller, director of digital transformation, Serpico by Croud

With the industry’s recovery dragging out longer than expected, much like this pandemic, we will have to make do with what we have.

For a lot of businesses, this has meant bringing activity and some services in-house. The need for greater control over data and tech to ensure activity is fit for purpose is certainly helping drive the in-housing trend, with our research showing 44% of UK marketers are in-housing more as a result of Covid-19.

Whether this move will be permanent or a temporary response will remain to be seen, but I think all businesses are feeling the strain and will continue to need to prove they are getting the best out of their budgets. We can expect to see more temporary lockdowns and tier systems come into play this year, and as such teams will need to have the flexibility to dial activity up or down to ensure they are reacting quickly to the ever changing environment.

David Coombs, CEO, Cheil

The industry is recovering at a slower rate than we might have hoped for but this gives us time to re-evaluate where we can make greater efficiencies and improvements. It’s easy to just look at the numbers, but often a refresh of how we approach client relationships can bring the best output, especially in the long run.

These are still uncertain and trying times, and we must strive to continue to be supportive partners to our clients, and with the trust they’ve put in us help them navigate these choppy waters together. Open dialogue, strong communication and a sense of togetherness should consolidate teams as we take on client problems the same way we would our own.

Carefully thought-out marketing strategies will help boost overall recovery and as vaccines offer a sense of optimism, encouraging clients to focus on areas that remain strong – like digital commerce and performance driven activities – will keep them in the forefront of consumers minds in the near future.

David Mulrenan, head of investment, Zenith

Although the latest Bellwether report shows a continued negative decline on marketing budgets in the last quarter, there are reasons to be cheerful with more optimism on budgets for the year ahead. Overall main media advertising fared slightly better in Q4 than the previous quarter and within this, online even showed some growth.

Also, despite another lockdown, TV was actually up year on year (according to Zenith’s Market Intelligence Report). It shows that outside certain verticals such as travel and automotive, businesses are able to adapt to the changing conditions and therefore still believe in advertising to grow their business.