LONDON: UK marketing budgets continued to expand in the final quarter of 2017, according to the latest IPA Bellwether Report, but they were growing at their slowest rate in two years.
The Q4 2017 Bellwether Report, based on data drawn from a panel of around 300 UK marketing professionals, indicated that while almost a quarter (23.9%) of marketing executives had raised their budgets during the latest survey period, 15.2% had reported a cut.
The resulting net balance of +8.6% was down from +9.9% in the previous quarter and the lowest since the start of 2016.
While main media advertising showed a net balance of +1.7% (up from 0.0% in the previous quarter), that was only because this category includes internet marketing spend which returned a net balance of +10.9% (down from +17.0%).
The only other category to show growth was events, where budgets showed a net balance of +5.5%.
Marketing budgets for all other Bellwether categories were reduced during the final quarter of 2017: PR recorded the lowest net balance (-6.6%), followed by other (-5.8%), market research (-5.4%), direct marketing (-4.5%) and sales promotions (-3.0%).
“Whilst fears of a sharp deterioration in the UK economy following the surprising EU referendum result in 2016 have so far proven to be unfounded, the current trend in growth signalled by the Bellwether survey is nonetheless consistent with an economy undermined by ongoing Brexit uncertainty and an increasingly common ‘wait-and-see’ attitude amongst businesses and consumers alike,” explained Dr Paul Smith, Director at IHS Markit and author of the Bellwether Report.
“Companies have subsequently adopted a similar attitude towards their marketing budgets. Whilst willing to expand in perceived cost-value areas such as digital they continue to do so by weighing down on budgets related to traditionally bigger-ticket main media campaigns.”
Anecdotal evidence pointed to respondents making greater usage of search/SEO and social media tools than before, or refreshing and re-launching websites.
The overall resilience of the business environment prompted the Bellwether Report to revise up its adspend growth forecast for 2017 to 1.4% (from 0.6%).
But the loss of momentum observed in the second half of the year is expected to carry into 2018, when it predicts adpsend will rise by just 0.3%.
Sourced from IPA Bellwether Report; additional content by WARC staff