UK MR Spend Trimmed while Marketing Budgets Rise

UK market research budgets appear to have fallen for the ninth successive quarter - but at a much slower rate than previously, according to the latest 2017 IPA Bellwether Report. Meanwhile marketing budgets have risen for a net 10% of companies.

First published in July 2000, the report is researched and published by IHS Markit on behalf of the IPA (Institution of Practitioners in Advertising), and is based on responses from a panel of around 300 UK marketing professionals. During the third quarter, market research budgets - including qual and quant, brand tracking and product development research - appeared to fall again, with around 12% of panellists recording a downward revision, compared to just over 10% that signalled growth. However, the resulting net balance of -2.4% compared with -6.2% in the preceding quarter, and was the 'least bad' recorded by the survey this year. Third quarter reductions are described as 'broadly in line' with expected performance from forecasts earlier in the year.

Almost 70% of UK companies have kept their marketing budgets at the same level as three months ago - a state described as 'paralysed' by the IPA, 'though arguably one might substitute 'stabilised', especially given the net positive from the other 30%. The Q3 survey reveals that around 21% of the survey panel recorded an upward revision to marketing budgets during the latest survey period, while 11% of companies recorded a cut. Marketers cited the 'hard to quantify' impacts of the Brexit negotiations, and the UK's future departure from the EU as the primary sources of any uncertainty.

As usual, digital marketing budgets outstripped their off-line counterparts, with search/SEO (net +16.3%) and mobile (net +5.8%) leading.

Companies were more optimistic about their own financial prospects in Q3 2017, with just over 29% of the survey panel having become more confident, compared to 18% that less confident. This optimism does not extend to their industry as a whole however: here nearly 24% of UK marketers were less confident than three months ago, compared to around 15% more optimistic. The IPA points out that even optimism about one's own company remains 'well below the post financial-crisis average'.

Commenting on the findings, Chris Daly, CEO at the Chartered Institute of Marketing, stated: 'Our own research shows that marketing delivers a 19% return on investment and that 50% of UK marketers see Brexit as an opportunity rather than a threat. In this period of prolonged uncertainty and economic turbulence, through focused strategic marketing, British businesses need to form ever closer relationships with customers, understanding their every need while preparing for a post Brexit world. To do this, it will be critical in the coming months to have someone in the boardroom who can be instrumental in making this happen, helping UK businesses develop new business models, create innovative partnerships and deliver export strategies'.

Web sites: www.ipa.co.uk and www.markit.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.