IPA Reports Gloomy Quarter for MR, Marketers Generally

For the first time in seven years, more UK marketers told the IPA's Bellwether survey their budgets decreased than increased during the third quarter of 2019 - although the change from the previous quarter was small. Figures for MR were the worst of any sub-sector and the worst in seven years.

Nearly two thirds (64.1%) said budgets were unchanged. A net balance of -0.5% of firms registered downward revisions in Q3 - down only fractionally from 0.0% last quarter. Some respondents said there was a 'wait and see' approach given the uncertain political and economic climate at present. Around 18.2% of firms cut total advertising expenditure, while 17.7% reported budget growth.

Once again digital spending saw growth while traditional declined - a net +11.1% of firms reported budget growth in digital, driven by new tools and tech, data driven campaigns and a greater push towards social media advertising. Search / SEO however saw a net balance of +6.1%, down from +9.9%; and mobile ad budgets saw a rare decline, with a net balance of -0.6%. Main media advertising budgets saw no net gain or loss (ie 0.0%) following good upward moves in the first two quarters of the year (+5.2% and +5.6% respectively).

Market research was the worst performer with a net -16.9%, from -2.9% last quarter - and this was MR's worst quarterly performance in the seven years the survey has run.

Respondents were also pessimistic about the prospects both for their own companies (net -9.4%) and for industry as a whole (-25.0%) for the fourth consecutive quarter. Marketers generally expect a recovery from next year. Report author Joe Hayes, Economist at IHS Markit, said the report 'spells further disappointment for the UK marketing industry, which is suffering, just like the rest of the economy, as a result of spending delays, firms placing projects on hold and subdued business confidence. The UK economy has endured a tough year so far and firms have subsequently withdrawn discretionary spending to protect profit margins. Perhaps the most discouraging sign is to see firms sitting on the fence regarding main media advertising, which is a vital form of long-term brand building, following resilient budget growth in the two previous quarters. Overall, as long as political and economic uncertainties remain at large, it will be surprising to see noteworthy boosts to marketing spending'.

Web site: www.ipa.co.uk .

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