UK-based marketers revised their budgets upwards during the final quarter of last year, but by the smallest margin for nearly three years – according to a quarterly survey of marketing spend plans published by the Institute of Practitioners in Advertising.
And, says the IPA Bellwether Report, despite the relatively small increase, “growth has now been sustained for 13 successive quarters and marketers’ budget plans for 2016/2017 are positive”.
The report, which has been conducted on a quarterly basis since Q1 2000, revealed a net balance of +0.5 per cent of companies registering an increase to their budgets during Q4 2015, down from +4.4 per cent in Q3 2015.
Net balance is calculated by subtracting the percentage reporting a downward revision from the percentage reporting an upward revision.
Says the IPA: “Optimism regarding marketers’ own financial prospects and their wider industries also remained relatively subdued in Q4, reflecting the softening in the rate of UK economic expansion in the second half of 2015.
“A net balance of +20.4 per cent of companies indicated they had grown more optimistic about their own prospects compared to three months ago, down from +22.4 per cent in Q3 and the lowest recorded level in 11 quarters.
“The net balance for wider financial prospects was +7.0 per cent, little changed from +6.8 per cent reported in Q3.
“Despite easing confidence over the quarter, UK marketers have indicated a positive outlook for their 2016/17 budget plans, with a net balance of +24.6 per cent of companies signalling growth in their total budgets for the coming year.
“Equally positive, and in spite of geopolitical instabilities, potentially higher interest rates and uncertainty over Brexit, Bellwether forecasts a steady expansion of 3.9 per cent in UK adspend growth in 2016.”
* Internet marketing recorded the strongest upward revision to budgets of all the Bellwether categories at +6.9 per cent, although this is down slightly on Q3’s +7.8 per cent. Within internet, spending related to internet search/SEO also showed a robust performance in Q4 recording a net balance of +5.8 per cent, up from +0.6 per cent in Q3.
* Main media recorded some growth (+1.1 per cent) which extends the current period of expansion to two years.
* Also showing marginal increases were PR (+0.6 per cent) and events (+0.6 per cent).
* Declines were, however, recorded for ‘other’ at -12.1 per cent, sales promotions (-7.7 per cent), market research (-7.3 per cent) and direct marketing (-1.7 per cent).
Source: IPA Bellwether Report, January 14 2016.