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How has the industry reacted to the Q1 2018 IPA Bellwether Report?

How has the industry reacted to the Q1 2018 IPA Bellwether Report?
In line with the trend seen since the end of 2012, UK marketing budgets were increased further during the first quarter of 2018 as marketing executives helped launch new products, bolstered events marketing and continued to enhance the role of digital platforms within their marketing strategies. This is according to the IPA’s Q1 2018 Bellwether Report released last week.

Read reaction from some of the biggest names in adland across PR, events and digital on this quarter's Bellwether Report.

General quotes:

Paul Bainsfair, Director General, IPA:

"Despite the slowdown, this quarter's results mark over five years of successive upward revisions to marketing budgets, signifying that regardless of external pressures - particularly Brexit uncertainties - most marketers still appreciate the value of advertising in building and maintaining their brands.
“Once again we are also seeing significant investment in internet budgets - for 35 quarters continuously – showing that in an 'always on' world, marketers are following the eyeballs. While we welcome this, it is worth remembering that the evidence shows that the most effective advertising achieves a 60:40 balance of brand building to sales activation media."

Dr Paul Smith, Director at IHS Markit and author of the Bellwether Report:

“The ongoing slowdown in marketing budget growth comes as little surprise in the context of the challenging business environment and disconnect in recent surveys between budgets and subdued financial prospects.
“Rising costs and the ongoing uncertainty that exists over the future direction of the UK economy in a post Brexit world have led to caution and belt-tightening across a number of sectors, especially those more exposed to retail and consumption.
“Despite losing clear momentum since last summer, the positive news is growth is being sustained meaning the longest bull-run in the survey history continues. Whether this can carry on remains to be seen. Although the latest survey shows anticipated growth in 2018/19, the degree of optimism is the lowest in five years.”

Sector quotes:

PR

James Goddard, Chief Executive JJ Marketing:
“As a full funnel marketing agency, the change in PR budgets isn’t all that surprising. PR has evolved, moving from a stand-alone discipline based largely on media interaction to one which now crosses over into areas such as content marketing. The lines between PR and these other disciplines will continue to blur, and activities which may traditionally have fallen into one channel are now considered to be part of another – with all of them capable of being part of a full funnel approach. Meanwhile, continued investment in the internet is no surprise given the measurability and cost effectiveness of online channels, though we mustn’t forget the continued importance of brand building to capture buyer interest.”

Main Media

Tom George, CEO UK, Group M and chair of the IPA Media Futures Group:
“‘Whilst perhaps there is little surprise in the forecast slowdown in media spend given economic uncertainty, it’s worth remembering that there is real growth in advertising expenditure for the last eight consecutive years. We would agree with the Bellwether’s sentiment in an upturn in confidence in the latter half of the year and predict that 2018 media spend growth will be 4.8% only a fraction behind the 5.0% growth we witnessed in 2017.

"The increasing share of pure-play internet advertising is well documented but there is some evidence that the legacy channels may enjoy a resurgence as GDPR, data breaches and an increased focus on long-term brand building present a slightly friendlier environment for these channels. In addition PAMCO’s new print and online audience measurement system, BARB’s Project Dovetail which will measure Video On Demand as well as GroupM’s new addressable TV product, Finecast, should also strengthen publishing and TV’s claim for an increased share of budgets’.

Search

Paul Mead, Owner, Meadia Consulting and chair of the IPA Search Group:
"Despite weaker upward revisions we continue to maintain an incredible bull run of growth in both search and wider internet advertising budgets in the UK. This is especially noteworthy bearing in mind the negative news flow around digital marketing and major platforms such as Facebook over the last quarter. It shows that advertisers in the UK have largely disconnected this negative news flow from the day to day imperative of maximising returns from marketing investment and being in those places where their customers are spending their media time"

Events

Patrick Reid, Group CEO, Imagination:
"During a period of relative uncertainty on the health of the economy, it’s promising that events and brand experience marketing continues to show strong return on investment. Confidence in this field has grown consecutively for four-and-a-half years, and is likely to continue, owing to the results that it delivers on consumer engagement, business conversion and brand sentiment.
"Whilst the overall picture is currently one of slow growth, there is ample scope for investment in marketing to be pushed by the opportunities afforded by new technologies."

Regional quotes:

England & Wales

Andy Reid, Managing Director of McCann Bristol and IPA England & Wales Chairman:
“On paper it’s certainly encouraging that these latest results show that companies are still increasing their marketing spend, albeit with a larger proportion of this being invested into digital channels.
“However, clients are continuing to seek short-term solutions which offer them flexibility to quickly respond adapt to the market and gain best ROI through multiple integrated channels, rather than commit budgets for the longer term.”

Michelle Wright, IPA City Head for Birmingham and West Midlands, and Company Director at Gough Bailey Wright:
“The uncertainty surrounding Brexit, in whatever final shape or form it takes, has many downsides, so it reassuring to see another quarter of growth, albeit slower. Combined with increasingly fragmented audiences, investing in the right spaces at the right times is key for brands looking to make their budgets work harder, hence the ongoing rise in digital. This is something we see reflected in our own new business generation, both in terms of new accounts and existing clients seeking to better integrate their marketing strategies.”

downloadable PDF for Q1 2018 can be purchased for £99+VAT for IPA members (£140+VAT for non-members) at www.ipa.co.uk/page/ipa-bellwether-report

Last updated 25/04/2018

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