UK Marketers More Optimistic, says IPA Bellwether

UK marketing budget growth is at its strongest in more than four years, according to the 2021 IPA Bellwether Report. Narrowly positive results for market research spend ended six years of downward movement for the sector.

The Bellwether is based on a questionnaire survey of around 300 of the top 1,000 UK-based companies that provide regular quarterly information on trends in their marketing activities, as well as their mood / outlook. This time round, the percentage reporting an increase in MR spend just beat that reporting a decrease, by a modest +0.7%, but this represents a real turnaround after a figure of minus 9.6% in the previous quarter. It also bucks predictions from earlier 2021 waves when a balance of -4.9% of execs said they were expecting cuts in MR spending overall in 2021-2.

David Fletcher, Chief Data Officer at Wavemaker says of the findings: 'The first upward revision in six years will be welcome news to all researchers. It tangibly indicates advertisers' needs for mapping out post-pandemic opportunities for growth which is welcome news across the marketing spectrum'.

Marketing budgets as a whole rose at the strongest rate since Q2 2017, as the post-pandemic economy recovery gathers pace. A net balance of +12.8% of firms registered upward budget revisions in Q3 2021, from +6.0% in Q2: this time one in four Bellwether respondents recorded higher spending (25.6%), compared with 12.8% that observed budget cuts.

Looking at the results by marketing category, main media advertising was the best-performing this time round, with a net balance of +8.6% of firms recording upward budget revisions (from +1.3%), as more firms upped their spending on 'big-ticket' campaigns. Out of home advertising improved its showing but failed to make positive territory (-2.0%, from -7.5%); whereas budgets for sales promotions crossed the line for the first time since the end of 2018 (net balance of +4.0%, from -0.7%). Direct marketing rose from a net balance of just +0.7% to a healthier +5.6%, while events budgets stopped tumbling but 'remained under pressure as firms erred on the side of caution' (a net balance of -3.2%, from -24.7%).

Higher numbers of respondents were optimistic about the financial prospects for their own company than at any time since the first quarter of 2015; and around 48% of firms expect stronger growth than they did three months ago, compared to just 11% who were less optimistic. Views of the prospects for industry as a whole remained fairly positive .

Joe Hayes, Senior Economist at IHS Markit and author of the Bellwether Report, said: 'The UK economy's performance over the third quarter has been remarkably positive... We couldn't have imagined such a fast recovery in economic activity earlier in the year when lockdown measures were at their most stringent. We're expecting UK GDP to have recouped all pandemic-related losses by no later than mid-2022, and Bellwether panellists have provided us with even more evidence that firms are working hard to re-grow their businesses, with one-in-four upwardly revising their total marketing budgets. As we said last time, we hope this is just the beginning, and businesses continue with their aggressive growth plans to keep momentum moving as the post-lockdown growth boom peters out'.

The Bellwether anticipates strong ad spend growth of 6.6% and 6.2% in 2021 and 2022 respectively, to accompany strong economic expansion.

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