The Media in Figures: Marketing budgets survey, the Q2 2015 IPA Bellwether Report

SAYS the Institute of Practitioners in Advertising, in its latest quarterly survey of marketing spend: marketing budget growth increased to a three-quarter high during the second quarter (April to June) of this year, marking 11 quarters of successive expansion.

However, it immediately continues: “Despite this, there was a noticeable drop in marketers’ confidence surrounding financial prospects both at the company and industry level.”

The report, which has been conducted on a quarterly basis since Q1 2000, revealed a net balance* of +12.2 per cent of companies registering an increase in budgets in Q2 2015, up from +11.8 per cent in Q1 and +6.1 per cent in Q4 2014. (* net balance is calculated by subtracting the percentage reporting a downward revision from the percentage reporting an upward revision.)

The latest survey also revealed a solid start to the 2015/16 financial year and matches up with the positive projections outlined by marketing executives in Q1.

Final data revealed that a net balance of +15.1 per cent of marketers indicated an upward revision to total marketing budgets in 2014/15, which followed on from 2013/14’s nine-year record of +19.9 per cent.

Despite the sustained growth, there was a marked deterioration in optimism regarding companies’ own financial prospects which declined to a nine-quarter low of +25.3 per cent, from +37.8 per cent in the previous survey.

A similar trend was seen for wider industry financial prospects with the net balance dropping to a two-year low of +13.1 per cent, down from +26.0 per cent in the previous survey.

In terms of overall UK adspend growth in 2015, Bellwether predictions remain unchanged since Q1 and forecast a real-term increase of +4.2 per cent. This is, however, dependent on an acceleration of economic growth in the second half of 2015.

When it comes to individual sectors, events was considered the strongest performing category in Q2 2015, with a net balance of +7.4 per cent of companies recording growth, which was a three-quarter high. Internet budgets were also revised higher, although the net balance of +6.8 per cent was a two-and-a-half year low.

Within internet, spend related to search/SEO followed a similar trend, slipping to +6.5 per cent from +8.5 per cent, its lowest level for a year-and-a-half.

Sales promotion recorded the best quarterly net balance for this category since Q1 2004 of +6.0 per cent.

All other categories with the exception of ‘other’ (-5.1 per cent) recorded marginal growth, including main media advertising (+1.7 per cent); PR (+1.1 per cent); market research (0.6 per cent) and direct marketing (0.5 per cent).

The IPA quotes its chair for Scotland, Brian Coane, reacting, as follows: “There are many positives to take from the IPA Bellwether Report for 2015 Q2.

“With marketing spend continuing to strengthen in areas that Scottish agencies have a very strong reputation for, such as events and internet, the 2015 outlook remains positive for the industry in Scotland.

“But weaknesses in some of the underlying drivers reminds us that marketing needs to continue to push for creativity to stimulate the economic recovery.”

SourceQ2 2015 IPA Bellwether Report, published July 16 2015.