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Bellwether reaction Q2 2015

Industry provides sector and regional reaction to Q2 Survey

By Sector:

Direct Marketing

Josette James, Client Services Director, Wunderman and chair of the IPA Customer Experience Group: “A disappointing situation for direct marketing budgets that reflects the pressure that companies are feeling to find new and innovative ways to engage consumers and sell their product via this channel. Meeting sales targets often, understandably, turn the focus to promotions. Direct Marketing needs to look at the opportunity to inspire brands with inventive methods of targeting and engaging customers. Only then will it warrant a more healthy slice of the marketing budget.”

PR 

James Goddard Chief Executive JJ Marketing: “It’s great to see PR budgets revised higher in the second quarter of 2015 indicating a return in growth for this area of marketing spend and the fifth time in the past six quarters that an increase has been registered.”

Main Media

Tom George, Chairman UK and Northern Europe EMEA, MEC and chair of the IPA Media Futures Group: “As far as UK media advertising is concerned, the Q2 Bellwether indicates yet another positive net balance of +1.7% in terms of marketing spend growth, however, there was a slow-down in optimism in comparison to the previous quarter. It is possible, therefore, to take either a glass half-full or half-empty approach to the latest published figures.

“We believe that the former is more appropriate.

“A sixth successive quarter of positive sentiment growth represents the best performance since the survey began. Perhaps more importantly this is translating into actual media spend as we can see from our MEC 2015 expenditure estimate rises to +6.3%, as pre-election uncertainty subsides.  MEC has also seen that TV performance continues to impress with a predicted demand-driven growth of 9% - the biggest in five years and even though Bellwether shows the internet has recorded its smallest net balance growth in two-and-a-half years, it continues to grow its share of the market. We at MEC believe it will break the 50% barrier in 2015.

“Whilst there are some economic clouds on the horizon in the form of the ongoing potential ‘Grexit’ and the slowdown in China, it remains to be seen if even a worst-case scenario in these events would have much impact on the 2015 UK figures.”

Internet

Nigel Gwilliam, IPA Consultant Head of Media and Emerging Technology: “These latest results for the internet category complete six full years of upward revisions to budgets. Although not the largest quarterly uplift, current figures continue to support a long term trend towards greater investment in internet-enabled media. With the growing role of mobile and online video in both media consumption and advertising expenditure, we would be surprised to see this trend reverse in the near future, barring very significant macro economic effects.”

Events

Paul Simonet, Creative Strategy Director, Imagination: “There are no surprises in the continued rise in the importance of events and experiences. Brands live in an Experience Economy, particularly for Millennials. Consumers care less about what you say than what you do...so events and experiences, combined with sophisticated social sharing of content are at the heart of brand marketing. That is not going to change. Whatever happens to overall budgets the importance of experiences is destined to grow.

“Look at the election. Look how set piece events/experiences have overtaken advertising in their ability to influence. “

Around the UK:

Scotland

Brian Coane IPA Chairman for Scotlandand Partner, Leith Agency: "There are many positives to take from the IPA Bellwether Report for 2015 Q2. With marketing spend continuing to strengthen in areas that Scottish agencies have a very strong reputation for, such as events and internet, the 2015 outlook remains positive for the industry in Scotland. But weaknesses in some of the the underlying drivers reminds us that marketing needs to continue to push for creativity to stimulate the economic recovery."

Northern Ireland 

Stephen Roycroft, IPA Northern Ireland Chairman and Managing Director, RLA Ireland"It’s great to see that marketing spend has been revised up for the 11th quarter. It is, however, disappointing to see that marketers confidence regarding their own financial prospects and the wider industry has dipped, and it is worth reminding them that adspend is a factor for growth, not cost.”

England & Wales  

Ben Quigley IPA Chairman England & Wales and Group Chief Executive, Everything Different: "This is the 11th consecutive quarter of growth reported by Bellwether, so its represents sustained improvement and a really solid start around the UK to the 2015/16 financial year"

Manchester

Jackie Holt, IPA North West City Head and Managing Partner, BJL: “I think that this latest report highlights the mixed messages we sometimes witness from our clients.

“There are some who remain optimistic and are looking forward to growth in the coming period, whilst others are prepared to hedge their bets on marketing spend to see which way the economic wind is blowing.

“We suspect that the general uncertainties surrounding the Euro  and how it may affect the UK trading position may be tempering the outlook. 

“However, you can’t beat the facts - the  consecutive growth of the last 11 quarters and the predicted upside on adspend  - so that must offer us all hope and a positive perspective.”

Birmingham

Andrew Wilson, IPA City Head for Birmingham and Chief Executive, WAA: “What the 2015 Q2 Bellwether Report really documents is that there is no longer a 'standard' recovery from a serious economic crisis.

"Whilst spend being up and optimism on the decline might look like an anomaly, it is something we are seeing widespread evidence of.

"The scars are still fresh from the perceived impact of global events in the last recession, and whilst companies are being braver with their spend, they are still extremely cautious toward longer term commitment. 

"Events such as the current turmoil in Greece, the horror in Tunisia and the 10th anniversary of 7/7 all serve as poignant reminders of the possible fragility of recovery. 

"This has certainly impacted the way we invest in our relationships with clients. More than ever, businesses want to be able to see around corners and weigh up the implications - both positive and negative - of every curveball that may be on the way. 

"We have invested heavily in developing a trends and insights team specifically pointed at this, and working with clients to look at future developments, behaviours and attitudes is going to be essential moving forward. 

"Everyone accepts that there will always be events that were impossible to foresee - but more than ever people are asking themselves 'did I do everything to plan for the future, and more importantly, to protect us."

 

Last updated 16/07/2015

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