UK Marketing Budget Growth at 'Ten-Year High'

UK marketing budgets appear to be growing at their fastest rate for a decade, according to the latest quarterly Bellwether Report from ad association the IPA. MR and all other sectors shared in the upward trend. Figures are based on percentages reporting growth minus those reporting a decline in spend.

The Bellwether, running since 2000, is based on a questionnaire survey of around 300 of the UK's top 1,000 companies, providing regular quarterly information on trends in their marketing activities. Respondents are primarily marketing directors or similar, and questionnaires are dispatched to companies in the final three weeks of each calendar quarter.

Overall, Q2 2024 marketing budgets saw their strongest upward revision since Q1 2014, with rises in every main category of spend - while respondents' views of their own companies' financial prospects were also at their most positive in nearly three years.

The report deducts the percentage of negative responses to its questions from the percentage of positive responses to give an index score for each subject. Thus the net balance of UK businesses expanding their total marketing budgets in Q2 was +15.9%, rising from +9.4% in Q1: the figure for Q2 reflects 29.9% of respondents reporting growing expenditure while 14.0% reported it had been reduced.

Events - still bouncing back strongly after the pandemic - led the way in terms of spend growth (+17.2%), followed by direct marketing (+8.9%). Main media budgets saw a net balance of +3.5% (up from -0.7% the previous quarter), led by video and other online ads, with declines in spend on ad campaigns on TV and radio, and OOH flat. Market research had a net balance of +3.2%, up from +1.4% in Q1.

Respondents are asked about their sentiment towards the financial outlook for their own company and wider industry in each quarter. On the former, second quarter results were strong, with a net balance of +13.6% saying prospects were improving for their firms - the highest level since Q3 2021.

Joe Hayes, report author and Principal Economist at S&P Global Market Intelligence says respondents seemed to have 'shrugged off' any uncertainty regarding the general election, and upped their spend in advance of it. He comments: 'A strong performance by the UK economy so far this year, in tandem with falling inflation and the expectation of an imminent interest rate reduction by the Bank of England, has helped lift confidence, providing more fertile grounds for companies who wish to invest into their brands and position themselves for long-term growth'.

Bill Doris, VP Analytics, EMEA, EssenceMediacom & IPA Media Research Advisory Group Chair, says of the MR results: 'The latest IPA Bellwether Report for Q2 2024 brings some good news for the market research sector. Budgets have seen a nice bump, with a net balance of +3.2%, the best we've seen since late 2021. This is a refreshing change from the previous quarters. Even with some political uncertainties, UK companies have been feeling upbeat thanks to a stronger economy, lower inflation, and the hope of interest rate cuts. While market research isn't seeing the biggest budget increases compared to other areas, it's clear that businesses value the Insight it provides. Fingers crossed this positive trend continues into H2 24'.

Web site: www.ipa.co.uk .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.