DRNO - Daily Research News
News Article no. 29602
Published April 22 2020

 

 

 

Pandemic Hits Market Research Budgets Hardest

Market research has been listed as the worst-performing category in the latest IPA Bellwether Report, as UK marketing budgets decline at the fastest rate since the global financial crisis of 2009.

MR props up the table, wobbly enough throughoutThe report is based on a survey of around 300 UK-based companies that provide regular quarterly information on trends in their marketing activities, and respondents are primarily marketing directors or similar. In the first three months of the year, market research budgets were identified as the category most impacted by the Covid-19 pandemic, with a net balance of -21.0% of marketers reporting a downturn during the first quarter of the year. This compares with -13.2% in the fourth quarter of 2019, when market research remained at the bottom of the survey's budget rankings for the second successive quarter. Spending on MR has been falling, according to this measure, since Q3 2015.

As emergency public health measures to stem the spread of the virus caused a sudden halt to consumer and business spending, data (compiled between 2nd and 27th March) showed that a net balance of -6.1% of marketers have revised their marketing budgets downwards. This compares with the net balance of +4.0% in the final quarter of 2019, and signalled the largest quarter-on-quarter fall in total marketing expenditure since the end of 2009. Specifically, 25% of panel members recorded a budget cut during the period, compared with 18.9% signalling growth.

The pandemic has resulted in cuts to all forms of marketing activity, with events and PR being the other two main casualties. None of the survey categories saw growth, with direct marketing and sales promotions observing the slowest reductions, and 'main media' recording its strongest downward revision since 2009. Yet, according to the report, budget forecasts for 2020/21 point to 'strong optimism' as firms expect the UK economy to recover during the coming financial year, with a net balance of +16.2% of firms anticipating higher spending allocations over the next twelve months. However, panelists still forecast market research budgets in negative territory, at -0.6%.

Paul Bainsfair, IPA Director General, comments: 'The Q1 results already reveal a sobering snapshot of the initial impact of Covid-19 on UK businesses' marketing decisions despite fieldwork for this quarter's Bellwether Report closing just a few days after government enacted the lockdown. These are undoubtedly the toughest overall trading times that any business and indeed any marketer will have ever experienced, but while we suspect the fuller, sharper extent of this global pandemic to be captured in Q2 data, the hope from this report is that we will see a more upbeat end to the year'.

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

 

 
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