The latest IPA Bellwether Report paints a positive picture of marketers’ budgets for the second quarter of 2024, with upwards revisions in every main category. What do industry leaders make of the figures? 

The future is looking bright for the UK’s advertising industry: marketing budgets reached their highest peak in over a decade during the second quarter of 2024, according to the latest IPA Bellwether Report. Upwards revisions to budgets were made for every main category, driving the second highest revision to budgets in the report’s 25-year history. 

The industry’s desire for social interactions kept the events category in the lead for another quarter, with a net balance increase of 17.2%. Direct marketing and sales promotions followed with net increases of 8.9% and 6.9%, respectively. Looking ahead, marketers intend to continue increasing spend in all main categories apart from market research. 

However, the outlook is still not quite as positive for consumers. Although the pound has just hit a one-year high against the dollar, prices remain high. Paul Bainsfair, IPA’s Director General, noted that data from the organisation’s 2024 IPA TouchPoints confirmed over a third of consumers are struggling to cope on their current income. 

What does the industry think? 

Brands cut themselves off from their audience by imprecise and over-zealous buy-side blocking

The summer of sport is in full swing and – despite England and Scotland’s misfortune in recent competitive tournaments  – these tentpole events have no doubt been an important factor in the growth of budgets. While the increase in consumer travel, as Brits look to escape the lacklustre weather, has provided further opportunities to reach consumers.

However, far too often, brands cut themselves off from their audience by imprecise and over-zealous buy-side blocking when it comes to brand safety. During the Euros final, our data found articles referencing ‘attack’, ‘shoot’ or ‘shot’ were deemed as "not brand safe". More nuanced brand safety tools, powered by AI, are vital to opening up premium ad slots, in turn maximising the potential of an uptick in marketing budgets.

Fiona Salmon, Managing Director, Mantis

Marketers must plan accordingly to ensure they partner with vendors that reduce their emissions

The upward trajectory of UK marketing budgets will hopefully bring much-needed stability for the industry in H2. Indeed, it’s encouraging that the Q2 2024 report cites opportunities in digitalisation and sustainability, as they should complement each other and not be implemented in isolation. It’s well-known that the digital marketing industry has a massive impact on the environment, so marketers must plan accordingly to ensure they partner with vendors that reduce their emissions.

If we want marketing budgets to remain healthy, we must ensure the overall health of the industry for generations to come.

 David Shaw, Co-founder and CEO, Cedara

Marketers should remain cautiously optimistic as we approach the golden quarter but be prepared to pivot strategy

This quarter’s IPA Bellwether results came as no surprise, particularly when looking at the rise in events spend. The advertising industry has been gearing itself up for this summer of sport for a long time and it’s great to see that advertisers have made investments in testing these strategies ahead of time. As the UEFA European Championships come to a close this week, and the Summer Olympic and Paralympic Games start in the next few, it will be interesting to see whether this momentum is sustained throughout the next three months and beyond.

“We are also yet to see the effects that a change in UK political leadership will have on consumer and advertiser confidence. Marketers should remain cautiously optimistic as we approach the golden quarter but be prepared to pivot strategy as we monitor the changes on the horizon carefully.

Chris Hogg, Chief Revenue Officer, Lotame

The return to growth for Main Media budgets is reassuring 

There is a general air of optimism with the UK economy returning to growth and a new government installed so it was reassuring to see the latest Bellwether figures also going in the right direction. Even more reassuring was the return to growth for Main Media budgets (+3.5%) having seen a reduction in Q1. Hopefully we’ll see this momentum continue into Q3.

Gill Jarvie, Client Services Director, Republic of Media and IPA Chair for Scotland

Advertisers must direct investment  towards solutions that can continue to deliver results beyond the phase-out of third-party cookies

It is encouraging that UK businesses have significantly increased their marketing budgets, with Q2 seeing the highest growth over a decade. Now, advertisers must use this investment strategically and direct it towards solutions that can continue to deliver results beyond the phase-out of third-party cookies.  

While some advertisers may be hedging their bets on the Sandbox, the reality is that no solution is one size fits all. A combination of approaches- including first-party data and unified IDs- should be tested to ensure brands can effectively connect with consumers across all browsers and achieve optimal reach and performance.

This will also serve advertisers well in capitalising on rapidly growing channels,  such as video advertising, which the IPA Bellwether found as the second-best performing channel, with many companies reporting increased spending. Advertisers should also investigate the growing accessibility of advanced measurement tools, which can enhance control within video advertising, especially in Open Web environments and growing CTV platforms. Investing in these technologies promises game-changing results for performance and transparent reporting and will ensure they lead in this crowded space.

Phil Acton, Country Manager UK, Adform

We can begin to work with a more optimistic and confident consumer

Despite England not winning the Euros, we did get growth and positivity in the pages of the IPA Bellwether. It finally appears as if we’ve turned a corner economically and I know that my colleagues in the North West will really hope that that translates into more positive trading conditions for the next six months. Short-term activation media - DM & events - are still driving the growth, but at least we’re seeing growth in main media usually associated with brand investment. With the Paris Olympics set to bring joy to our lives and talk of interest rates cuts, I think we can begin to work with a more optimistic and confident consumer.

Sue Benson, Managing Director, The Behaviours Agency and IPA City Head for Manchester & North West

The biggest opportunity lies in data collaboration and connectivity between advertisers’ target audiences, and publisher audiences

Given recent macroeconomic challenges impacting spending, it’s encouraging to see marketing budgets are at their highest point since 2014. Brands must ensure they use these increased budgets effectively, reinstalling room in their media plans for always-on iterative testing where it may have previously been removed due to budget constraints. With reach across the open web sitting at just 30%, there is a need to address both the problem and opportunity that exists today to unlock incremental reach and access to 100% of their target audiences. 

For advertisers and publishers alike, the current state of the programmatic industry only brings chaos and uncertainty, which is further amplified by third-party cookie deprecation delays and workarounds. Waiting to see what happens and allowing someone else to solve the problem for you is not an advisable solution.

The biggest opportunity lies in data collaboration and connectivity between advertisers’ target audiences, and publisher audiences. A number of innovative brands are already moving out of cookie-based buying and into leveraging publisher signals, and these brands see double to triple reach, increased sales, and reduced CPAs. The success is derived from using their budgets to reach untapped markets, and audiences at scale, and in turn, seeing an exceptional return on that ad spend. Publisher signals are delivering strong results for advertisers, their solution is available today, so why wait?

Ned Jones, Head of Advertiser Customer Success, Permutive 

Marketers should remain cautious and ensure they are allocating expanded budgets based on data-led consumer insight

The upswing in confidence indicated by the latest IPA Bellwether report is undoubtedly encouraging, but marketers should remain cautious and ensure they are allocating these expanded budgets based on data-led consumer insight. Indeed, there are some warning lights. While inflation has decreased, prices remain high and will continue to impact customer purchasing habits. Indicatively, squeezed household finances were highlighted as a threat by representatives within FMCG, Financial Services, Retail, and Travel and Entertainment. This has led to an increase in sales promotions, which experienced its third consecutive quarterly rise - the longest spell of growth since 2018. Such activity should be used sparingly, as a prolonged emphasis on discounted prices can damage long-term brand value. 

A more sustainable and effective approach lies in better understanding consumers, their journey to purchase, and the products and advertising experiences that are relevant to them. This can be done by making use of available insights within the business, in the form of owned first-party data. While no brand has a full 360 view of their customer, thankfully, today technology exists that means they can engage in data collaboration to make permissioned data accessible across business, and unite second-party datasets in a privacy-centric manner with their own via a data clean room to unlock rich consumer insight. This can be used to maximise the efficiency and ability of media plans to drive long-term revenue. With the pending deprecation of cookies putting a premium on first-party data, brands should investigate, experiment, and ensure they have the necessary soft skills in place to make the most of this data collaboration revolution.

Hugh Stevens, Managing Director UK, LiveRamp

Businesses have a prime opportunity to maximise the impact of their spending

With marketing budgets seeing their strongest upward revision in ten years, businesses have a prime opportunity to maximise the impact of their spending. By adopting innovative, data-driven strategies, marketers can understand their customers better, boost audience connections, and secure long-term success in this dynamic market. Particularly, those that harness advanced digital tools like AI-driven content classification will create more targeted and impactful campaigns; making the most of this momentum.

Bash Labban, Head of Trading & Partnerships, Azerion

We can expect an increased swing towards direct deals and private marketplaces from marketers

With budget dials turned to their highest level for some time, the big question is how to keep them there. Through Q2, we’ve seen marketers drive stable results by sticking to traditional events, direct marketing, and promotions. While discount sales will remain a key focus in the final quarter — especially amid the soaring power of retail media — those looking to scale up will likely extend engagement through programmatic multi-channel campaigns that drive efficient reach across display, digital video, and connected TV. As part of that, we can also expect an increased swing towards direct deals and private marketplaces from marketers eager to carefully control how and where their expanded spending pots are allocated.

Pierce Cook-Anderson, Managing Director, UK & Northern Europe, Equativ

Better economic conditions and growing consumer confidence, as well as the prospect of a new government, have helped spending levels bounce back 

There’s a lot to be celebrated in this quarter’s Bellwether report. It’s no surprise to see events once again seeing a big increase in advertising spend. The lead-up to large-scale events - from Glastonbury to the Euros and the rest of the Summer of Sport - would have no doubt have seen marketing budgets increase as advertisers look to make the most of captivated audiences both inside and outside of the home. 

It’s the same for TV and radio spend too, as the millions of people following such events from the comforts of their homes was another big opportunity to engage with them - either through traditional media or streaming platforms.

Overall, better economic conditions and growing consumer confidence, as well as the UK general election and the prospect of a new government, have helped spending levels bounce back to much more positive levels.

It might be too soon to say that we’ve turned the corner just yet, but it certainly seems that confidence is back to a much better place than it has been over the past few years. We still need to be cautious, but any positive sign of growth should certainly be celebrated.

Steve McHenry, Managing Director UK, Yahoo