Bellwether Suggests MR Budgets Down Again

Companies in the UK are more likely to be seeing MR budget cuts than increases, according to data from the latest Bellwether report from the Institute of Practitioners in Advertising (IPA). In the first quarter of 2023, a net 3.2% of firms reported declining spend.

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. The latest wave shows a further shrinkage in available MR spend at UK companies, stretching the current sequence of decline to five quarters.

Companies that increased market research spending (8.2%) continued to be outnumbered by the proportion who registered cuts (11.4%), resulting in the net balance of -3.2%. However, the latest reading demonstrated the 'softest reduction' over the past five quarters period of budget contraction, and an improvement on the net 8.8% fall in the previous Bellwether report.

Bill Doris (pictured), VP Analytics EMEA at MediaCom and Chair of the IPA Media Research Advisory Group, comments: 'The welcome green shoots of total marketing budget growth demonstrate the resilience of UK businesses and point to a cautiously optimistic outlook. Within market research, despite a negative net balance of -0.7%, the softest reduction in budget contraction for five quarters hints at increasing confidence in the sector'.

Overall, for all sectors covered by the report, more than a third (36.6%) of respondents foresee greater total marketing spend in real terms in the year ahead, compared with 16.9% anticipating cuts, creating a net balance of 19.8%. According to the report's authors, the latest Bellwether data signalled a fresh sense of optimism among panellists regarding their own company financial prospects - indicated by a net balance of +7.0% of firms that were optimistic towards their business outlook (vs a net balance of -17.2% previously). However, at the industry-wide level, Bellwether panel members remained pessimistic towards the financial outlook compared with three months ago.

Web site: www.ipa.co.uk .