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Digital advertising is a major focus for brands at the moment, with spending in this area increasing at its fastest rate for almost ten years during the second quarter of 2017.
This is according to the latest edition of the quarterly Bellwether survey from the Institute of Practitioners in Advertising (IPA), which takes a regular look at how marketers are spending their budgets.
Between April and June, over one-third (32 per cent) of marketing professionals reported increasing their digital advertising budget, with just nine per cent decreasing spending in this area in comparison.
Digital has been a growing focus for quite some time now, however, so what is behind the sudden surge in interest in this medium?
Why is digital spending growing?
Digital advertising is becoming an ever-more competitive sector, with brands constantly trying to outdo each other with their campaigns, content strategies and how much presence they have across the web and social media channels.
As a result, marketers are always looking to up their spending on digital assets where they can, and with Bellwether finding that 28 per cent had increased budget to play with in Q2 2017, this has been made possible for many over the past three months.
What’s more, it was found that 30 per cent of respondents to the survey were feeling confident about their financial prospects for the coming months, which may offer another explanation for why more is being invested in digital advertising at present.
Paul Bainsfair, director-general at the IPA, explained that it is not enough for brands to simply have as many digital assets as they can possibly afford and curate, but that there also needs to be a well thought-out strategy behind these and that as much of the budget as is needed should go towards this.
“While it is good to see spend up in internet, it is worth remembering that IPA studies have consistently shown that the most effective marketing results [come] from a 60:40 brand building (emotional) to sales activation (rational) ratio.”
Where else are marketers spending their money?
Aside from digital advertising, where else are marketers spending their money at the moment?
The IPA found that search engine optimisation was also an increasing focus for businesses in the second quarter of 2017, with spending in this area rising by an average of 15.6 per cent over the course of the three-month period. This marked the greatest increase in this area for two-and-a-half years.
In addition, many marketers upped their spending on main media advertising (TV, newspapers, magazines, radio), with this growing by 9.8 per cent during the quarter, marking a slight dip from the previous quarter’s growth of 10.7 per cent.
However, the proportion of budgets being spent on market research, direct marketing and sales promotions fell markedly, with the sum being invested in the latter falling to its lowest level in seven years.
With Brexit leading to widespread uncertainty across the UK’s business landscape, the IPA has warned that this may impact marketing budgets for the remainder of 2017.
Commenting on the report, Paul Smith, senior economist at IHS Markit, stated: “Marketing executives are indicating to us that recent budget expansion has been partly defensive in nature to protect market share and sales in a softening economic environment.”
Source: Perfect Pearl Solutions
Source: Marketing Week