UK Market Research Spend Down Again in Q4, Says IPA

UK market research budgets fell in the fourth quarter of 2020, with 34% of firms reporting a decrease and only 11.4% a rise - according to the latest IPA Bellwether Report.

The report, authored by IHS Markit, is drawn from a survey of around 300 UK-based companies, providing regular quarterly information on trends in their marketing activities. During Q4, the net balance of firms that cut their MR budgets - the difference between those reporting increased and decreased spend - was -25.0%. This compares with the third quarter of 2020, when MR budgets saw the second sharpest decline since data collection for this category started in the final quarter of 2012. For Q3 2020, 42.2% of respondents reported a fall in quarterly MR budgets; with just 9.6% reporting an increase. The latest results mean that available spend for MR has been declining for more than five years.

When questioned on their initial budgets for 2021/2022, panel members provisionally indicated that they are planning to reduce market research spending further (net balance of -4.7%). [DRNO Editor's note: we're very surprised at this finding, and hereby predict a significant increase in spend after Q1].

Fourth quarter total marketing budgets also continued to decline, with a net balance of -24.0% of panellists recording a drop in total marketing spend (40.4% reporting a decline, 16.4% an increase). Sentiment regarding own-company financial prospects turned positive, but industry-wide outlook remained negative.

Mark Inskip, CEO UK & Ireland, Kantar (Media Division), commented: 'It's critical for marketeers and their partners to show they really understand what makes people tick at the moment - their motivations, their fears and their hopes - and predict future trends, including what patterns of behaviour will stick long after the lockdowns ease and what new ones will emerge. Slashing marketing budgets can seem like an easy solution for a business under pressure, but it is often a false economy. Brands that remain visible, accessible and relevant will be front of mind when consumers reach for their wallets as the economic recovery picks up in the next financial year'.

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