UK Marketing Budget Growth Stalled, Says Bellwether

UK market research budgets were cut in the fourth quarter of 2018, as a six-year run of continuous overall UK marketing budget growth came to an end during a period of heightened political and economic uncertainty, according to the latest IPA Bellwether report.

First published in July 2000, the report is researched and produced by IHS Markit on behalf of the IPA (Institution of Practitioners in Advertising), and is based on responses from a panel of around 300 UK marketing professionals.

The headline index figure is produced by deducting the percentage of respondents saying budgets have fallen from the percentage saying they have risen, producing a rough picture of what's happening to overall spend. The survey suggests market research budgets have been falling since the third quarter of 2015, with the latest net figure at -4.7%, worsening from -3.7% in the third quarter of 2018.

During Q3, overall marketing budgets flat lined at +0.0%, signalling no change during the fourth quarter: the 16% reporting growth were balanced out by 16% reporting a decline. The report authors suggest that political and economic uncertainty caused by the ongoing Brexit negotiation process has dampened both business and consumer confidence, driving belt-tightening and restricting resources available to marketing executives.

Preliminary data from the Bellwether panel indicates a near-neutral stance on overall marketing spend for the 2019/20 financial year. The proportion anticipating increased marketing expenditure (27%) was only marginally higher than that for those predicting cuts (26%), yielding a net balance of just +0.8%.

Report author Joe Hayes, Economist at IHS Markit, comments: 'The slowdown in marketing budget growth seen in recent quarters culminated in Q4, as the six-year bull run came to an end. Company-wide indecisiveness restricted the allocation of resources to marketers, as the wait-and-see approach to how the Brexit process will transpire appears to be the current strategy in place for many UK businesses. Provisional data for budgets for the coming 2019/20 financial year indicate that downbeat stance seems likely to persist'.

Web sites: www.ipa.co.uk and www.markit.com .