For the first time over 40% of UK marketing budgets are spent on digital – a higher rate than most other markets

The 4th edition of AGENCY SCOPE UK 2021/22 is now released. Developed by SCOPEN in partnership with WARC and with participation of ISBA members, the ground-breaking research highlights key trends in the UK’s communication, marketing, procurement and advertising industry, and provides in-depth positioning and competitive analysis to both creative and media agencies. 

A total of 306 client-agency relationships were analysed and 141 marketing professionals – highest-level decision-makers in marketing, communications, advertising, and procurement – from 118 of the largest and most important companies in the UK, including brands such as Diageo, eBay, Ford, Heinz, NatWest, Tesco, Shell and Unilever, were interviewed for the report.

Key findings from Agency Scope UK 2021/22 are:

  • Digital investment has increased more than 18% since 2015

37.5% of marketing budgets are invested in above-the-line, 21.8% in below-the-line and 40.7% in Digital (the latter has increased 18.5 percentage points since 2015). Digital is, for the first time in this study, the discipline that has received the largest investment of the marketing & communications’ budget. Digital budgets in the UK are higher than most of the ten markets in which AGENCY SCOPE is conducted (40.7% vs. 35.7% average investment).

  • Higher turnover and marketing budgets than in 2019

The average company turnover declared by respondents is £10.9 billion, while the average company marketing budget declared is £41.7 million. In both indicators, companies have declared higher figures than in the previous edition. Marketing and communications budgets represent 0.4% of the total of companies’ average turnover.

  • UK marketers prefer specialization vs. integration

58.8% of marketers said that they work with different specialist agencies for particular disciplines. 60.2% of respondents declared that, in the future, they would prefer to work with specialist agencies (this rate is above the global benchmark) while the other 39.8% stated they would prefer to work with an integrated agency for all their marketing and communication needs.

Globally, there are two different trends: those more for integrated agencies (Argentina, Brazil, Chile, Portugal and South Africa) and those more for specialist agencies (Colombia, Mexico, Spain, UK, China and India).

  • Pitch remains the most frequently used method to select an agency

Pitching is the most frequently used method to select an agency, used by 92.6% of marketing professionals in the UK. Also popular are Workshops (67.6%), whilst used less frequently are Consultants (28.7%), By credentials (15.7%), Direct appointment (6.5%) and Trial assignment (0.9%).

To establish the Long List of creative agencies, respondents cited as most important The quality of the agency’s work/cases/credentials followed by My own experience/personal knowledge and Friends or colleagues recommendation. For the Short-List, Creativity-Innovation, Agency’s previous experience and expertise, and Agency reputation/image/prestige are most important.

  • Longer relationships with agencies 

The average duration of marketer/creative agency relationship in the UK is 4.9 years (above the global average of 4.4 years), an increase from the last edition (4.4 years in 2018). This is due to a combination of marketers opting for stability during the disruption of the pandemic and agencies responding to their clients’ needs on social responsibility and sustainability.

  • Involvement of Procurement increases

66.7% of marketing professionals in the UK stated that their procurement department is involved in the negotiation process. The involvement of Procurement has increased worldwide in the last few years with China showing the highest percentage (77.1%) among all countries where the study is conducted.

  • Metrics & Results are a key challenges for companies

When asked about the challenges that their companies will face in the near future, responses relating to Proving ROI/Effectiveness/Results/Metrics (29.1%) were cited the most by marketers, followed by a Better understanding and engagement with the Consumer -knowledge, journey, touchpoints- (27.4%) and Being able to better adapt to lower client budgets (20.7%). These results are comparable to the other Agency Scope markets.

The top challenges marketers think creative agencies will face in the coming years are Being more innovative and able to deliver bigger creative ideas (29.0%) and Understanding different communication platforms and channels (20.2%)

  • Outstanding companies and campaigns

The top five companies most respected for their marketing skills and expertise named by UK industry professionals are John Lewis, NIKE, Apple, McDonald’s and Unilever.

Among the most admired campaigns, the UK places John Lewis in first place, followed by Tesco and NIKE and, for the first time in years, Coca-Cola had dropped out of the top 10.

  • COVID-19 crisis has helped to accelerate processes

The COVID-19 crisis has accelerated processes and marketers’ commitment to innovation and digital transformation.

When asked about how the pandemic had affected their communication both internally and with agencies, most mentioned Less face to face meetings, Changes in brand messages (emotional content, social values) and Changes in media channels.

César Vacchiano, President & CEO of SCOPEN highlights how “Creativity and Strategic Planning are considered more important than ever when defining the ‘ideal’ agency, when choosing agencies and even when changing agencies.”

Johanna McDowell, UK MD & Partner for SCOPEN noted how “the pandemic has caused the decrease of New Business activities and brought on a decline in agency meetings with prospects.”

Paul Coxhil, Managing Director, WARC, said: “Based on rigorous research, the insights outlined in this report will enable agencies to adapt and and strengthen their strategies in the marketplace, empowering them to better serve their clients in a dramatically changed industry landscape.”

For further information on the full report, please register your interest here

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