LONDON: Marketing budgets at UK companies continued to increase in the fourth quarter of 2014 but at the slowest rate for two years as business optimism cools according to a new report.
The Q4 2014 IPA Bellwether Report, researched and published by Markit Economics on behalf of the Institute of Practitioners in Advertising and based on original data drawn from a panel of around 300 UK marketing professionals, revealed that budgets rose for the ninth successive quarter.
A net balance of +6.1% of companies registered an increase in budgets, half the 12.6% figure of the previous quarter and the lowest since Q1 2013.
Despite this loss of growth momentum, which stems from heightened caution regarding the slowdown in the wider economy, the average growth rate for marketing budgets in 2014 was the highest recorded in the survey's 15-year history.
All categories recorded upwards revisions to their marketing budgets in Q4 2014, with the exception of 'other' (-10.5%).
The highest upward revisions were made to internet with a net balance of +15.1% (up from +14.5% in Q3). And within that, search also recorded a significant net balance increase of +15.7% (up from+9.4% in Q3).
Main media advertising's growth of +6.7% was down from +9.2% in Q3, marking a one-year low. Among the other categories recording growth, PR grew +6.6%, direct marketing +3.9%, events +2.4%, sales promotion +2.4%, and market research +0.6%.
In terms of actual spend in the 2015/16 budget year, a net balance of +30.6% of companies anticipate a rise in their marketing budgets relative to 2014/15 levels.
Events, PR and main media are expected to benefit most from this uplift in total budgets.
The Bellwether also revised upwards its growth forecast for adspend in 2015, from 3.8% to 4.1%, in line with a stronger than expected increase in consumer spending.
"We're forecasting a further solid rise in marketing and advertising spend in 2015, but expect that 2014 will prove to have been the high-water mark in terms of growth in the current upturn," he said.
Data sourced from IPA; additional content by Warc staff