Mixed Signals from UK Marketers in Bellwether Report

UK marketing budgets grew again in Q2 2015, according to the latest IPA Bellwether report, but marketers' general confidence declined due to company prospects and general doubt about the global economy. The picture for MR budgets improved slightly from April's report.

Budget growth, as seen in the Report's 'net balance' figures, increased for the eleventh quarter running: the percentage of companies reporting a spending increase exceeded that reporting a decrease by 12.2%, up from 11.8% in Q1 and 6.1% in Q4 2014.

Marketers' views of their own firms' financial prospects declined to a nine-quarter low of +25.3%, from +37.8% in the previous survey. In the case of the wider economic picture, the net balance also fell, from +26.0% to a two-year low of +13.1%. Nevertheless the Bellwether predicts a real-term increase of 4.2% in budgets for the whole of 2015.

The Events category had the strongest net balance, with 7.4%, while Internet advertising budgets saw their worst quarter for two and a half years, showing a net balance of 6.8%. Market research gave a net balance of 0.6%, joining main media advertising (+1.7%); PR (+1.1%); and direct marketing (0.5%) in the marginal growth category. The MR figure at least represents an improvement on the previous quarter when the figure was -1.3%.

Paul Smith, Senior Economist at Markit and author of the Bellwether Report, says that beneath the generally upbeat headlines, the underlying drivers of growth are 'a little harder to read'. He comments: 'On the one hand, companies are showing an increasing willingness to engage in corporate hospitality, conferences and sponsorship. But belying this confidence is an increased willingness to engage in discounting and promotional activities designed to support sales at a time when the economic and financial outlook for companies has become just a little more uncertain'. IPA Finance Director Tom Lewis adds: 'Spend remains high but there are questions about longer term confidence. So although we can't ignore the various global threats from Russia, Grexit and China's stock market, the message for our industry remains that the outlook is still good so agencies should continue to look at building longer term value through talent and effectiveness strategies'.

First produced fifteen years ago tomorrow, the report is researched and published by Markit Economics on behalf of the IPA and pulls in data from around 300 UK marketing professionals. 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.