Tom George, Chair at MEC London and IPA Media Futures Group, gives his Q4 2014 Bellwether Report verdict and what it means for the industry in 2015.
The latest IPA Bellwether Report for Q4 2014 once again paints an upbeat picture for the health of the marketing and advertising sector.
The ‘best calendar year in survey history’ observation is supported by market data. GroupM’s media and marketing forecasts estimate the growth in media expenditure at 8% and 6% for 2013 and 2014 respectively.
This represents the best consecutive year-on-year performance since 1999 and also means that the UK remains the world’s fastest-growing mature ad economy.
The Bellwether Report also reveals a slowing down in the rate of growth for the fourth quarter. This is consistent with the viewpoint of other commentators.
We would agree with a note of caution in the longer term, but it is our belief that the continuing fall in oil and supermarket prices will stimulate further rises in consumer expenditure at least across 2015.
This, in turn, should lead to growth in ad spend during 2015 at similar levels to last year.
Performance and delivery remains every advertiser’s priority. Media advertising is subject to more scrutiny than perhaps any other form of marketing.
The fact that it was the best-performing Bellwether channel in 2014 should inspire confidence that it still works pretty well.
If you scratch below the surface of the topline figures, it will come as no surprise that the internet marketing budgets continue to rise faster than any other sector nevertheless some of the main media channels have proved remarkably resilient.
According to GroupM figures, linear TV’s share remains steady at about 26% despite inflation of between 6% and 11% across the main TV audiences, signifying its inherent strength in delivering mass audiences quickly, building brand fame and highlighting the fact that traditional television has few substitutes.
Print has evidently suffered most from internet disruption.
One consequence has been to polarise free and paywall business models in national newspapers as audiences migrate online.
The national press stakeholders recently announced that the National Readership Survey (NRS) would be replaced. They hope that this will better measure and integrate offline and online readership, thereby demonstrating the engagement which they think is the main strength of newsbrands, in turn restoring investment into this medium.
All else does not remain equal. Choice is dynamic and competition for the marginal marketing pound is relentless.
The tools and techniques of data science make ever-rising demands on the budget.
Across GroupM, our clients expend greater effort into owned, earned and shared media. The cost of all this is hard to even estimate, but it is surely rising.
This makes paid media’s recent progress all the more remarkable.
Tom George is Chair at MEC London and the IPA Media Futures Group.
Discover more about our essential quarterly IPA Bellwether Report.
Last updated 15/01/2015