Whilst 2020 was a tough year (to say the least) for many, COVID-19 has shown that the ad tech industry is capable of adapting to crisis. Having mapped the fallout of the pandemic and the impact dramatic infrastructural changes that shaped last year, the IPA Bellwether Q4 2020 Report asserts that, whilst the picture is far from pretty, recovery is on the horizon. In this article, members of the industry give their response to the Report's findings, and what they think awaits ad tech in the new year.

It may be slow, but confidence is returning

The Bellwether report reflects the mood of the nation - we are currently in the depths of the pandemic with nothing but bad news at a macro level. However, surrounding this heartbreak is hope. We have hope that on a geo political scope that change is coming; we have hope that, as we move forward from the pandemic, we will increase focus on the macro environmental challenges, but perhaps the most tangible hope is that the vaccine will put halt to COVID-19 and allow us to all rebuild, rebase, or revitalise our lives. This is what is reflected in the business confidence growth and why budget growth is slightly lower. As an industry we are scenario planning still, but the scenarios are not closed looped and negative - they are broader in scope with a positive ‘when’.  

Clients know that when we feel personally confident again, those who have not been adversely affected financially by the pandemic will want to spend. We are already seeing the +55s consuming more travel content than any other demographic and in a recent survey we did almost 45% of adults are thinking about summer holiday plans. If this optimism transverses across other big ticket purchases we have held back on then ‘when’ it happens this year it will happen big. This is why we are seeing the surge in confidence.

Justin Taylor, Managing Director UK, Teads

Whilst video fared well, approaches to brand suitability need refining

Video has remained resilient throughout 2020; having withstood the twists and turns of a global pandemic, it is on track to continue at the forefront of media campaigns. It’s no surprise that according to the IPA Bellwether Report video was one of the least impacted formats in Q4 2020, recording just -3.5% reduction in ad spend.

However, Q4 did not come without its hurdles. The industry saw first-hand how blanket legacy contextual targeting techniques came up short and had costly repercussions on ad revenues. For example, broad content keyword labelling (of trigger words such as 'COVID-19') meant that advertisers missed out on many other associated opportunities. This quickly drew attention to an intrinsic need for the adoption of more sophisticated data in order to effectively increase investment outlook. 

As a result, we are seeing a collective demand from users for increased relevance of ads from advertisers and brands respectively, and achieving this goes far beyond keyword associations. This requires working with contextual data partners to remove waste inventory and improve ad alignment with suitable video content that adheres to each brands’ standards. Looking ahead to the remainder of Q1 2021, brands will be under increased scrutiny to standardise their approach to brand suitability on video platforms in order to better reach their audiences.

Ross Nicol, VP EMEA, Zefr

Industry optimism is encouraging, but more online investment is needed

With the UK entering 2021 in yet another lockdown and having spent much of the last quarter under either stringent national, regional or local restrictions, these results are reflective of the ongoing adversity we face. With COVID-19 still stalling normal trade and many industries such as Travel, Automotive and Beauty struggling to recoup, the side-effects are naturally seen in our advertising budgets. Now, with the depletion of the high street and decline of footfall, retailers need to focus on their online user experience more than ever before. 

It is encouraging that marketers expect budgets to bounce back this year, though it should be noted that the survey was likely conducted after news of the vaccines but before the full extent of virus mutations and subsequent heavier precautionary measures announced. However, UK PLC is far better prepared than this quarter last year, when the first lockdown took businesses by surprise. There has been a sustained drive towards digital innovation, ecommerce and marketing efforts that support this and I expect this to continue. Marketers are unlikely to press pause on activity as many  did last year.

However, as the online community becomes increasingly saturated it will become vital for advertisers to remain engaging and relevant while delivering brand messaging to its consumers. It’s during these times of store closures, restricted movements, and an uncertain economy, that digital innovation and investment in a data-driven, multi-channel attribution strategy will be crucial to survival.

Claire Burgess, Head of Biddable at NMPi by Incubeta 

Continued unpredictability means real-time data needs to come to the fore

Post-COVID and post-cookie, more and more brands are seeing that there’s a limit to what historical data can tell them. Consumer behaviour has been changing more quickly than we’ve ever seen before, and the past year has proven that it’s almost impossible to predict.  

The overall picture of the Q4 Bellwether report is one of cautious optimism, and the net increase in ‘other online’ ad spend is encouraging – to see that optimism come good, marketers need to be able to rely less on hazy predictions, and more on real-time insights. Knowing exactly when to flip the switch is the first challenge, and understanding the constantly changing audiences and contexts that affect campaigns is just as thorny. The hardest-hit industries such as travel and hospitality will be most keenly aware of this, but it goes for almost all brands. 

So as ad spend comes back this year and next, brands can give themselves the best chance of successful campaigns by solving for that unpredictability. The answer is real-time data: live engagement signals that take the guesswork out of contextual targeting. It’s an age-old problem, but the technology finally exists to achieve it. If ad spend increases as the report suggests, marketers will be under pressure to justify it – bringing certainty into the equation with new technology using real-time data will be one of the best ways to do that. 

Peter Mason, co-founder, Illuma Technology

Understanding consumers - not slashing budgets - will see marketers emerge stronger

The vaccine rollout certainly gives hope for the future and that’s reflected in the slight fall in the rate of marketing cost cutting in this latest IPA Bellwether report. But business leaders are still keeping their budgets under close scrutiny as the pandemic continues to shape - and inhibit - our daily lives and uncertainty remains around the long-term effects of Brexit. Now, more than ever, advertising and marketing teams will need a strong pitch with a laser-like focus on the consumer to convince budget holders that they can deploy investment smartly and help deliver commercial returns.

It’s critical for marketers and their partners to show they really understand what makes people tick at the moment – their motivations, their fears and their hopes – and can predict future trends, including what patterns of behaviour will stick long after the lockdowns ease and what new ones will emerge. Slashing marketing budgets can seem like an easy solution for a business under pressure, but it is often a false economy. Brands that remain visible, accessible and relevant will be front of mind when consumers reach for their wallets as the economic recovery picks up in the next financial year.

Mark Inskip, CEO UK & Ireland, Kantar (Media Division)

Contextual marketing will propel marketers ahead of their competition

With recovery forecast in the latest IPA Bellwether report, it’s important to acknowledge that there are still opportunities for marketers to capitalise on media consumption and e-commerce trends that emerged over global lockdown periods. As roughly two-thirds (65%) of UK consumers have a more favourable opinion of brands that serve them contextually relevant ads, marketers will need to review audience targeting strategies in the new cookieless world. Employing contextual technology will be the differentiating factor for marketers in 2021. 

Marketers should not only be aware of increased media and e-commerce consumption, but also audience migration across platforms. The newly launched Open Measurement for Web Video SDK from the IAB Tech Lab will be a useful tool for marketers looking to understand the performance of their video advertising in all web placements. This update will help marketers to understand performance across platforms, as it provides access to a single standard across web and mobile apps that is trusted, transparent, and secure.

Nick Morley, EMEA Managing Director, Integral Ad Science (IAS)

Whilst spend is still down, opportunities prevail

The results of the report are not unexpected considering consumer confidence was down -33% in November and unemployment rates were high at 5% in Q4, not to mention the reduction in disposable income for services and products outside of an individual’s daily needs (-17% YoY). With consumer demand diminishing, it’s only natural for advertising investments to fall.

However there are still opportunities for brands to invest in their current customer bases, as well as to retain and provide value for consumers. Additionally, as the market stabilises, now is the time for brands to put the flexibility they’ve exercised over the past year to use by exploring alternative opportunities, such as gaming, which has become a mass media solution (accelerated by the pandemic) that’s set to be worth over £10bn in the UK by 2023.

Fern Potter, EVP and global strategy officer, FCB/SIX

A focus on growing verticals and cross-device strategies will bring marketers success

Businesses did a good job of adapting to evolving market conditions last year, as shown by findings that budget declines consistently fell with each quarter. It’s positive to see this has given companies greater confidence and driven them to re-prioritise advertising — with 12% predicting spending increases that will accelerate marketing recovery across 2021/22.

The coming months will bring a mixed hangover from 2020. Brexit and COVID-19 will remain considerations, but there will be opportunities to capitalise on media consumption trends that emerged during lockdown periods. The most successful marketers will therefore be those who double down on cross-device strategies, focusing particularly on channels that have experienced the most growth; including CTV, audio and video.

 In the longer term, we can also expect other familiar themes to remain a priority. Transparency will retain its top billing as more brands and agencies turn their attention towards supply path optimisation (SPO) and making maximum use of reduced ad budgets. The fast-running countdown to third-party cookie deprecation will keep marketers focused on reviewing available options, from new ID partners to contextual targeting alternatives, while big tech forces such as Google will continue to fall under close scrutiny, which may end up with some parts of their business being spun off or sold.

Phil Acton, country manager, UK & BeNeFrance, Adform

Market research will be integral to brands preparing for a post-pandemic spend fest

This Bellwether Report highlights that brands need to focus more than ever on marketing effectiveness. Some brands have already begun investing a higher proportion of their media spend in emerging addressable TV and digital media - this should be a wake-up call for those more traditional high ATL spend brands, who now have to rework their strategies to bring their mix up-to-date.

Alongside this comes a warning against decreasing market research spend, often the first area to feel the axe. A deep understanding of customers should be the foundation for marketing (and product) decisions. Remove this knowledge and you are flying blind. This calls for more focus on rapid, addressable, actionable insight that generates creative ideas and channel choices, and less investment in slow, generic research that has no bearing on real world marketing decisions.

The expectation of a turnaround in 2021 aligns with predictions of a giant post-vaccine spend fest. Pent-up urges to shop could be realised in the latter half of the year. For brands and marketers, this raises two questions –  “how ready are you?”  and “what do your media plans look like should consumer behaviours suddenly change?” These shifts in demand and consumer expectations mean brands will only invest in marketing initiatives that have a clear and immediate ROI, and, critically, address the change in consumer behaviour.

Anthony Magee, director of Data and Experience Technology, SYZYGY