Last week, the IPA Bellwether Report for Q4 last year was released. There seems to be great optimism looking to 2022, as well as an equal share of risks and opportunities for businesses to be aware of.

Mark Dolan, our Client Services Director gives a well-rounded outlook on the report:  “The Bellwether report makes for positive reading for anyone in the marketing and advertising industry. Following on from a few years of uncertainty, a forward thinking positive forecast will alleviate any fears that the current patterns will be short lived.

“ This report is also unsurprising to many working in this industry who have seen the phenomenal rebound and growth pretty much since the reopening of the economy in May 2021. Clever planning, long term understanding from both clients and agencies and publishers/media owners will allow these growth patterns to continue.

“However, our industry, like most, is suffering from either logistical issues or inflation-meaning now more than ever, planning and foresight is crucially important to successes of both the industry and the campaigns which prop it up.

“ No doubt there will be obstacles along the way in terms of new variants and economic challenges which will cause concern and temporary setbacks, but as we’ve seen from the past two years, and trends that set us back – they are indeed temporary and there are a huge number of brands focused on growth which provide an instant tonic to our industry.”

Below, we’ve picked out some key points that reflect this optimism for 2022.

Marketing budgets- a positive outlook for 2022/23

Total marketing budgets grew  in the fourth quarter of 2021, the latest data from the Bellwether survey showed, continuing its recovery.

With 20.1% of respondents upwardly revising their total marketing budgets, and 14.0% cutting them, fourth quarter  data showed a total net balance of +6.1% of companies upwardly revising their total marketing budgets for the last quarter  as recovery efforts from the pandemic continued. However, amid the emergence of the Omicron strain of COVID-19, heavy supply-chain disruption and strong inflationary pressures, total marketing budget growth did in fact slow down from the third quarter of 2021 (net balance of +12.8%).

Overall though, the latest data was still a robust result by comparison to recent years and it signalled the second-strongest improvement since the opening quarter of 2019.

Looking further ahead, data regarding spending plans for businesses in 2022/23 suggest that marketing budgets are on track for considerable growth. This comes as businesses step up their recovery efforts from the COVID-19 pandemic. A net balance of +34.5% of surveyed companies are planning to expand their total marketing spend in the coming 2022/23 financial year.

Close to half (45.7%) of Bellwether panellists were optimistic of budget growth, compared to just 11.2% expecting spending cuts.

And  of the seven broad types of marketing activities, events was the strongest performer for this planned budget growth- reflecting firms' expectations of less pandemic related restrictions. A net balance of +19.0% of surveyed companies are expecting higher events budgets in the coming financial year, whilst sales promotions budgets are also set for strong growth, with a net balance of +17.9% of firms planning to expand their spending here.

 Main media marketing – including 'big-ticket' advertising campaigns relating to TV and radio – is also expected to receive strong budgetary support, as a net balance of +17.4% of firms anticipate spending growth.

Finally, Direct marketing (+15.5%), other (+10.6%), PR (+9.6%) and market research (+7.4%) are also areas of marketing which businesses expect to see spending grow.

  Total marketing budgets & Market Research

   Total marketing budgets grew further in the fourth quarter of 2021, and Market research (with a net balance of +7.0%) was the top performing category in the latest survey period, which visibly reflected efforts by businesses to better understand the impact that the COVID-19 pandemic has had on their existing clients and target audiences. Overall, market research enjoyed its strongest performance since this category of marketing was first tracked by Bellwether over nine years ago.

Gemma Newton, our Head of Data and Insight Department commented on this. She said, “In line with the Bellwether Survey, it is reassuring for all brands and agencies to see the continuation of recovery, with +20% of responders confirming that they will be upwardly revising their budgets in 2022.

“With any budget review, comes commercial justification, and our  Data and Insight division will provide our clients with the backing that they require. As an agency, our core focus has always been to ‘connect brands with their target audiences.’ I’m delighted to have recently joined MAG, heading up the Data and Insights division which is will be integral in not only integrating wider teams and departments, but to ensure that we continue stand by our client promises.”                                                                                                                                          

 Employment Prospects  & Recruitment

In the vein of positive outlook, the survey asked Bellwether panellists whether they expect employment at their companies to be higher, the same or lower in three months' time?

And the  survey data continued to signal strong hiring intentions at the end of 2021 as a net balance of +27.9% of firms expect staffing levels to increase over the next three months, which represented strong intentions among firms to expand their workforce.

Almost 38% of survey respondents plan to recruit additional staff over the next three months, compared with nearly 10% anticipating job losses. Data reflects that these plans  to hire additional staff came amid numerous reports of staff shortages, reflecting high COVID-19 infection rates and staff in quarantine, as well as challenges finding suitably skilled workers.

So, the Bellwether states, strong hiring intentions are indeed a promising sign for business growth prospects, but shortages of available candidates, intense competition for staff and rising wages create a challenging environment for recruitment.

This bodes well in the way of campaigns however; we now know there’s going to a nationwide recruitment effort as businesses grow in the next financial year, and as they face this challenging environment- it’ll give a space for recruitment campaigns new and existing to thrive and do their work.

Video, audio, published brands, out of home & other online advertising

Bellwether panellists provided an in depth breakdown regarding their main media marketing budgets during the latest survey period, and it was found that video marketing was the top performer during the last quarter of 2021, with a net balance of +7.3% of firms upwardly revising their budgets, rounding off 2021 with a fourth successive quarterly expansion.

Our Head of Planning, Amy Roberts delved deeper into this: “As we can see, Video marketing was the top performer of media categories in the last quarter, and this is a trend we have seen over the past two years in a few ways. Firstly, Video viewing through the pandemic showed that TV and VOD viewing increased by up to 45% during UK lockdowns, with households finding comfort in entertaining video content. We know that shared viewing was also up by 30%, where families were coming together more than ever before to share in TV moment. Secondly, online short form showed that not only is TikTok a global phenomenon, but it has also pushed short-form video content across other social platforms with Instagram releasing ‘Insta Reels’ and YouTube creating ‘Shorts’.”

“I think video is incredibly important in today’s advertising landscape,” Amy continues. “In a world with so many brands fighting for ad space, it offers consumers engagement with a brand, where they can understand a brands tone of voice, their USPs, as well as an emotional connection amongst many other things. At MAG, we offer media planning, buying, research, insight and strategy across all medias, and therefore have a 360 view of the media landscape, how video can enhance media placements and drive a better ROI for our clients.”

 The Bellwether Report is based on a questionnaire survey of around 300 UK-based companies that provide regular quarterly information on trends in their marketing activities, with  the survey panel carefully selected to ensure that the survey data provides an accurate indication of actual marketing trends in the whole economy.