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Advertising IPA Bellweather

Advertisers plot to overcome ‘cautious confidence’ following Bellwether ad spend slowdown

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By Seb Joseph, News editor

January 15, 2015 | 5 min read

Advertisers have resolved to “fix the roof while the sun is shining”, focusing intently on addressing ongoing issues around creativity, accountability and innovation ahead of what the Bellwether Report indicates will be a confident period of investment in 2015.

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The clarion call from creative and media agencies spotlights the need to reassure marketers of marketing’s ability to deliver return-on-investment amid the shifting sands of the UK advertising market.

Cautious confidence in advertising

While marketing budgets hit record levels in 2014, according to the IPA Bellwether Report, growth is slowing as marketers opt for cheaper, more targeted online channels to ease campaign performance fears due to heightened consumer caution within the marketplace. A net balance of 6.1 per cent of companies boosted budgets in the final quarter of 2014, down from the 12.6 per cent in the previous quarter and the lowest since the third quarter in 2013.

Businesses are erring on the side of caution in their investment patterns or prioritising major investments into customer experience, especially online, rather than into classical advertising campaigns.

It is a trend set to continue over the next year, as evidenced by advertisers becoming more concerned about their financial prospects. A net balance of 30.7 per cent of companies in the latest quarter were upbeat about their financial prospects according to the study, down on the 38.6 per cent three months ago.

Quantitative versus qualitative advertising

Agencies, while confident in the report’s positive growth outlook for 2015, believe that now is the time to step up efforts to ensure that digital investment continues and prevent brands from reverting back to traditional marketing plans to ease their fears for future growth.

Russ Lidstone, chief executive of Havas Worldwide London, said demonstrating flexibility, adaptability, creativity and integration is key to overcoming the cautious confidence the agency group is seeing across its clients.

"We operate in an era of marketing discontinuity as evidenced by the shifting sands of the UK retail market - which affects a whole range of businesses beyond the retailers themselves," he added.

"I think adspend forecast is up because clients are increasingly well versed in the evidence that retaining a presence and maintaining salience is necessary in order to drive share and weather periods of discontinuity. In short, advertising works."

James Whitehead, executive partner at JWT London, said it had seen the same confidence across its own advertisers and cited the untapped opportunity for connecting together the customer journey as a way to lift confidence and boost budgets.

Industry observers, including WPP chief executive Sir Marin Sorrell, have voiced concerns that the optimism around the UK’s advertising market needs to be tempered by the macro trend of companies cutting their way to growth due to wider corporate pressures to slash costs. Marketing is becoming too quantitative and not qualitative enough”, Sorrell has said, a shift that could threaten future budgets.

The Bellwether Report is a reminder to 'fix the rood while the sun is shining'

Matthew Hook, managing director at Carat, said the “underlying pattern” from the latest Bellwether report is “undeniably positive”. It is “incumbent on us to ensure that as digital investment accelerates we create best practice and unlock the full business effect of these investments by doing digital better,” he added.

“As an industry we must remember to ‘fix the roof while the sun is shining’ – during this period of relatively confident investment. Now is the time to focus intently on innovation, creativity and accountability so that this growth is sustainable for a 3-5 year period.”

Alex Grossman, exec producer at creative partner B-Reel, believes agencies' focus will be guided by the rise in marketers requesting for “data supported campaigns before reaching for their chequebooks”.

“Once people get their heads around the inevitable, agencies will finally start looking at campaigns with a more holistic approach. Brands will always want more for their buck. This can be achieved through innovative campaign planning implemented through utilising old and new media channels. Naturally they’ll need to work with the right innovative and progressive partners to produce these.

Growth in UK spend for 2015 is tipped to rise 4.1 per cent, according to the report, in line with a higher than previously expected increase in consumer spending.

Advertising IPA Bellweather

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