UK market research budgets continued to contract during the final three months of last year, according to the latest IPA Bellwether Report. Total marketing budgets grew during the period however, despite expectations that the economy had entered a recession.
The report is based on a questionnaire survey of around 300 UK-based companies that provide regular quarterly information on trends in their marketing activities, with a broad variety of respondents (mostly marketing director or equivalent) by sector and geography. Questionnaires for this wave were sent out in the final three weeks of the third quarter.
In Q4, more respondents said that spending reserved for market research had shrunk, than said it had grown, with a net balance of - 8.8%.This marks the sharpest reduction since Q2 2021. However, the Bellwether author says that the outlook for market research activity was slightly positive, indicating an intent among firms to gather intelligence on customer behaviour as they look to 'navigate the challenging economic environment'. A net balance of +2.0% of businesses are anticipating market research budget growth in 2023/24.
In the latest survey, around one fifth of survey respondents upwardly revised their total marketing spending in the fourth quarter (20.2%), while 18.0% registered budget cuts. The net balance recorded in positive territory for the seventh successive quarter (+2.2%), marking the longest uninterrupted sequence of growth for four years. Looking ahead at the 2023/24 financial year, 39.5% of surveyed companies expect total marketing budgets to be higher, while just 15.3% anticipate spending cuts.
Paul Bainsfair, IPA Director General, says companies are 'holding their nerve' and continuing to invest in marketing through the UK economy downturn. Report author Joe Hayes, Senior Economist at S&P Global Market Intelligence, adds: 'Another quarterly expansion in total marketing budgets at a time when business costs have hit multi-decade highs and consumer confidence has plunged suggests many businesses understand the importance of investing in resources that will help them get through the downturn as best as possible'.
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All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.