BEGINS the Institute of Practitioners in Advertising, about its latest report concerning marketing budgets – in its quarterly Bellwether Report: “Marketing budgets increased at an accelerated pace in Q1 2015 and for the tenth consecutive quarter, according to the latest IPA Bellwether Report published today (16th April 2015).
“This latest data rounds off the 2014/2015 budget year to reveal that overall growth in marketing budgets for the year was the best recorded in a decade.”
And IPA goes on to say: “The report, which has been conducted on a quarterly basis since Q1 2000, revealed a net balance* of +11.8 per cent of companies registering an increase in budgets in Q1 2015, up markedly from +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.)
Other figures in the report:
* The latest data marked the final quarterly reading for the 2014/15 budget year, and with upward revisions to budgets signalled throughout the period, overall growth for the year was the best recorded since 2004/05 with a net balance of +21.8 per cent of companies indicating that budgets had risen over the year.
* In terms of actual spend, Bellwether data for the 2015/16 budget period showed that a net balance of +28.0 per cent of panellists are forecasting an increase in their marketing budgets relative to 2014/15. This is the most upbeat assessment signalled by the panel for eight years, and all Bellwether categories are forecast to benefit from this expected upward revision to total marketing budgets. Events and main media advertising are predicted to be the largest beneficiaries, suggesting that companies will continue to maintain spending on both high-level campaigns (such as TV, cinema and press), and look to further increase their footprint in cost-efficient online marketing solutions.
* The general confidence signalled by marketing executives reflects growing optimism about their own and wider industry financial prospects. A net balance of +37.8 per cent of companies have grown more optimistic about their own financial prospects, compared to +30.7 per cent in Q4 2014. The net balance for wider industry financial prospects rose from +16.2 per cent in Q4 2014 to +26.0 per cent during Q1 2015.
* Positive prospects for finance and marketing budgets are rooted in a strengthening macroeconomic climate. Allied with official estimates from the Office for Budget Responsibility (OBR), indicating solid growth rates of both consumer spending and investment in 2015, the latest Bellwether survey predicts a real-term increase in UK adspend of +4.2 per cent in 2015 before growth cools slightly in 2016 to +3.6 per cent.
* The highest upwards revisions to marketing budgets in Q1 2015 were made to internet, recording a net balance of +8.4 per cent. This extends its run of growth to 23 successive quarters, although this was the lowest upwards revision in just over two years and was down from a six-quarter high of +15.1 per cent in Q4 2014.
* Within internet, spend related to search/SEO also increased, recording a net balance of +8.5 per cent, although this was also down from Q4 2014’s net balance of +15.7 per cent.
* Events budgets were also revised higher, recording a net balance of +5.7 per cent which extends its period of growth to a year-and-a-half; as were direct marketing (+5.5 per cent), which recorded its best performance since Q3 2010.
* Main media advertising budgets were revised up for the fifth consecutive quarter (+2.9 per cent) although to a much lower rate than Q4 2014’s +6.7 per cent.
* Sales promotions (+0.6 per cent) also recorded growth, but ‘other’ (-7.1 per cent), PR (-1.8 per cent) and market research (-1.3 per cent) all recorded downward revisions.
Source: IPA Bellwether Report, Q1 2015, published April 16 2015.