Back To Business: What Does The Rest of 2024 Have In Store For Marketers?

The summer brought us more than just heatwaves and headlines - it was a whirlwind of sports spectacles, political shake-ups, and, unfortunately, some societal turbulence. Adding to the uncertainty, Labour leader Keir Starmer has indicated that his October Budget will bring about significant changes, with many bracing for the "painful" adjustments he has warned of.

"Frankly - things will get worse before we get better," is the prime minister's warning to the British public.

This announcement has injected even more confusion and concern into an already complex economic landscape.

However, with the final quarter of the year upon us, the advertising industry is mustering all the hope it can and preparing for a dynamic, even positive, close to 2024.

According to WARC, there’s a growing sense of optimism among the public about personal finances in the latter half of the year. In July, a noteworthy 61 per cent of consumers expressed confidence that their financial situation will improve over the next six months. This sentiment is particularly strong among younger demographics, with 68 per cent of Gen Z and 65 per cent of millennials expecting a financial upturn, compared to just 29 per cent of baby boomers. Historically, rises in consumer spending translate into increased ad spend as brands seek to capitalise on any anticipated surges.

So, what trends might emerge in the marketing industry as brands leverage positive shifts in consumer behaviour amid the challenges posed by Starmer’s Budget and the evolving economic climate? The final stretch of 2024 promises to be a critical period for marketers, with new opportunities and challenges shaping the landscape ahead.

UK Economic growth and what it means for advertising

While it won't come to the newly elected government as any surprise that they are inheriting some major economic challenges, they do so as the UK GDP is in growth - up by 0.6 per cent from April to June. That follows the 0.7 per cent increase recorded during the first quarter of the year.

Consequently, the UK advertising market is projected to grow by 7.7 per cent to £39.4 billion this year (according to WARC), signalling a potential surge in consumer spending ahead of Christmas.

The second quarter IPA Bellweather report also displayed an upward trajectory for UK companies in their marketing budgets due to the strengthening economy. Forecasts rose from +9.4 per cent in Q1 to +15.9 per cent in Q2 - coming in at the strongest rate in over a decade and the second highest level in almost a quarter of a century. However, 14 per cent of respondents reported budget cuts during the second quarter, which was less than half of those recording expenditure growth at 29.9 per cent.

Joe Hayes, principal economist at S&P Global Market Intelligence and author of the Bellwether Report, explains that UK business seemed to side step the usual uncertainty and decision-making paralysis that comes with elections, meaning marketing budgets grew to a 10-year high.

"A strong performance by the UK economy so far this year, in tandem with falling inflation and the expectation of an imminent interest rate reduction by the Bank of England, has helped lift confidence, providing more fertile grounds for companies who wish to invest into their brands and position themselves for long-term growth," says Hayes.

However, Keir Starmer’s October budget could derail those advertising strategies. New taxes or regulations might increase costs for advertisers and wealthier consumers, while measures boosting disposable income could enhance consumer spending at the lower end. With the US elections looming, potential volatility in global markets could also influence UK consumer behaviour, making it crucial for marketers to stay agile and informed.

Describing his expectations for the rest of the year, Weber Shandwick EMEA CEO and global chief transformation officer Michael Frohlich uses the word "unnerving". He explains: "Geo-political and economic uncertainty will continue to spook markets and clients.  Our new UK government is on the doom and gloom bus for the near future. Things are going to be tough. However, there is much at play and the back end of 2024 could be monumental where global uncertainty may ramp up or settle down and start to be resolved."

But signs of optimism are definitely appearing, despite the long term challenges Britain faces.

“The early election made for a tricky start to the year – we experienced many clients slowing down their plans and decision-making. In general, I think it caught many businesses off guard,” admits Chris Mellish, chief executive of Unlimited Group.

However, he now believes that newfound confidence is emerging as more briefs, pitches and a “level of creative braveness from clients” are cropping up that he was not expecting. “The success of agencies and our industry at large is often about momentum – and I feel certain that momentum is starting to build again,” he adds.

Supporting mental health in the months to come

At the beginning of the year IPA president and GroupM CEO for EMEA and the UK, Josh Krichefski called on all advertising agency leaders to demonstrate their commitment to their employees’ mental health and wellbeing by signing up to the ‘People First Promise’ (PFP) - an initiative that requires agencies to provide evidence of their various activities that support mental health in the workplace.

“As a people business, the health and wellbeing of our people are paramount,” Krichefski says. “They are the engine of our success. And so the importance and ongoing commitment by agencies into this area cannot be overestimated.”

But how has the IPA’s PFP scheme been received and how will it support the industry’s people further? It’s fair to say that it has been positively embraced. In May, it was announced that almost 70 companies had signed up. “And this number is growing every week – with an update on these figures to be announced in a couple of months’ time,” says Krichefski.

“Through these companies’ PFP submissions, we are seeing some truly impressive and comprehensive examples of how they are empowering and supporting their people and safeguarding their people’s current and future health and wellbeing. And with their involvement, we will be sharing some examples on our ‘Adland Wellbeing Lab’ over the next few months, for us all to learn from and deploy in our own companies.”

The IPA plans to highlight agency exemplars of best practice at its first People First Lab event being held later this year, where the institute will also be inviting experts to run workshops on various aspects of wellbeing, particularly through “tougher times”.

The IPA president adds: “On which note, we are mindful of the impact the social unrest this summer has had on people’s mental health and wellbeing, which has further highlighted the need for companies to regularly check-in with their people.

“By having mental health and wellbeing practices, resources and lived experiences embedded into our businesses, we all prosper. Both personally and professionally.”

The Winter Holiday Boom

​​The Christmas sales period will be crucial to solidifying momentum. So how is adland gearing up for Christmas marketing? And what themes are likely to dominate this year’s Christmas marketing?

Felipe Serradourada Guimaraes, deputy executive creative director at BBH London, believes the nation will see far less celebrities in this year's Christmas ads. “Last year’s Christmas campaigns were packed with star cameos, and while they grabbed attention and helped create headlines and spectacles, brands could take a different route this year and focus on great storytelling, rather than famous faces.”

With regards to the tone of festive marketing this year, Serradourada Guimaraes believes the industry is in for a shift. “After everything the country and consumers have been through this year, there’s a real opportunity to move away from saccharine, tugging-at-the-heartstrings-style storytelling. I feel like people are ready for some pure joy. Brands could pick up on this and deliver entertaining campaigns that make you smile, rather than sob.”

Ultimately, however, BBH’s deputy ECD does admit that if some Christmas ads do make people well up, “because you hit them in the emotional gut”, brands should make sure they make the nation smile along the way too. “Entertaining can still be heartfelt."

Creator economy: harnessing influencer partnerships this Christmas

The fact that the creator economy was valued at £195 billion in 2023 and is projected to reach £375 billion by 2027 (Goldman Sachs), only points towards the growth and popularity of the sector. In the lead up to Christmas, working with influencers will be one of the most effective ways to tap into the “era of emotion in marketing” as Holly Walton-Gould, strategy director at That Lot, part of The Weber Shandwick Collective, dubs it.

A respectable 42 per cent of people admit that personal emotional value is the most important type of value contribution a company or brand can make, according to TWSC ‘The Primacy of Personal, What We Value’ research. “And joy is serious business; with a recent study proving joy to be the biggest predictor of purchase intent, getting the good vibes going must be a serious focus for brands this Christmas,” Walton-Gould adds.

Tapping into the creator economy is one of the most effective ways to do this, with 80 per cent of consumers saying their fandom brings them excitement and joy (according to Kearney, Cultivating Fandom). “When creators capture and sustain attention in social feeds, they generate an extended emotional reaction that deepens brand connections, facilitating quicker recall during purchasing decisions,” says Walton-Gould.

And this year, new creative tools along with continued developments in AI are lowering barriers to entry for creators.

Walton-Gould’s top tip for marketers is to respect the skills creators possess. She adds: “The creator is no longer confined to the role of ambassador; they are a brand in their own right; one who is fiercely protective of personal style and selective over who they work with and what they talk about.” Like any good relationship, Walton-Gould believes, understanding one another is where the best partnerships will flourish. “Brands must shift from viewing creators as content generators to creators as allies who desire and most importantly – thrive from – creative freedom.”

Existing beyond the AI badge

As the novelty of Gen-AI fades “like the toy in last year's Christmas cracker”, the simple use of AI in a campaign no longer guarantees success, or so say Peter Gasston and Ben Hopkins, innovation lead and creative director at VCCP and its AI agency Faith.

They are seeing newly-emerging Gen-AI technologies that will help brands surprise and delight customers this holiday season. “But whatever you deliver to them, the thing they’ll remember won’t be the “made with AI” badge, but the experience,” Hopkins attests.

Many brands and marketers solely consider using AI for volume, but the VCCP pair feel the focus should be on giving the customer more - prioritising effectiveness over efficiency.

“A simple way in is to bring brand photography or generated images to life with motion, using video generation tools such as Gen-3 Alpha,” adds Gasston. “Take this further in collaborations with AI artists; in the same way you’d work with other content creators, set them a brief and let them bring their individual styles to it, as McDonald’s Japan did with Kakudrop, and Samsung with Joshua Vermillion.”

For an elevated experience, brands should let their customers create and share intriguing personalised content. “Cadbury has been killing it in this area; in the UK we at VCCP launched ‘My Cadbury Era’ which used AI to put people in vintage posters.

“This principle extends to clients too. Our Bubl image generator is freeing O2 from the constraints of limited character templates to bring their iconic brand mascot to life in any given scenario, keeping imagery fresh, relevant and ultimately more entertaining," says Hopkins.

Gasston and Hopkins also believe that the real power of AI in marketing might lie in the combination of different synthetic content types: audio, images, text, and video can be daisy-chained in custom workflows to push the limits of media in new and creative ways.

They point to their experimental short film 'Finding Faith' which used at least 15 different tools and services, claiming that even a combination of a couple of such tools "can produce powerful results."

Meanwhile, Weber Shandwick's Frohlich believes that AI will continue to reshape the industry but at a slower pace than previously assumed. "We know it’s here, we know AI can impact creative generation, prediction, production automation but clients and agencies are still finding their feet," he believes.

Emerging Media

And while the attention has been on the impact of AI of late, the same ad spend report from WARC cites relatively new media retail media and connected TV as both already being ahead of social media for advertising spend.

At the end of last year, British electronics brand Currys launched its retail media network (RMN) to drive advertising pounds, following major supermarkets such as Tesco, Asda and Sainsbury's lead.

And it's still the early days of the development of these platforms. So much so that just this summer GroupM signed a deal to gain access to Tesco Media's data, insights, and strategic planning through the Tesco Connected Store. That includes access to in-store screens as well as online.

And Sainsbury's has also recently partnered with the Alliance of Independent Agencies which will see over 100 members receive training from Nectar360 staff on the potential of RMNs to pass onto their brand clients.

"With retail media expected to lead ad spend growth over the coming years, and with new, diverse players emerging in ad selling – from Uber to Chase – we are once again seeing the value of first-party data in targeting the right person with the right message at the right time. Such data, combined with new AI enhancements, will constitute the fabric of the advertising industry for the next decade and beyond," explains James McDonald, director of Data, Intelligence and Forecasting for WARC.

All in all, then, we're set for a fascinating end to the year, with nascent business confidence butting up against government squeezes and consumers desperate to see some positivity and fun. For marketers, this is rich territory - requiring all of the levers at their disposal and a healthy dose of optimism and derring-do. What fertile ground for brilliant creativity to sow the seeds for a buoyant 2025.