LONDON: UK marketing budgets continued to rise in Q3 2015, but there has been a marked slowdown in growth amid concerns about the outlook for some UK economic sectors and the wider global situation, a new report has revealed.
According to the latest quarterly IPA Bellwether Report, a net balance of +4.4% of companies registered an increase in budgets during Q3 2015, significantly down from the +12.2% recorded in the previous quarter.
That was the lowest level recorded since Q1 2013, although the report emphasised the latest reading should be "placed in the context of being part of an unprecedented period of budget expansion since the final quarter of 2012".
Based on a survey of senior level marketers from around 300 UK-based companies, the report indicated that industry confidence is beginning to wane.
For example, a net balance of +6.8% of companies indicated they felt optimistic about the financial prospects of the various industries they operate within. This was down from +13.1% in Q2 2015 and represented a nine-year low.
Confidence regarding their own company financial prospects held up better at +22.4%, but this was down from +25.3% in Q2 2015 and was the lowest it has been for two-and-a-half years.
Taken together, the data prompted the Bellwether Report to cut its forecast for UK adspend growth this year to +3.7%, down from the +4.2% predicted in its previous survey. Adspend growth in 2016 is now forecast to be +3.6%.
Internet marketing budgets saw the highest upward revision in Q3 2015, recording a net balance of +7.8%. This was up from +6.8% in the previous quarter.
Events also registered marginal growth in revisions to marketing budgets at +2.8% and main media at +0.5%.
However, declines in marketing budgets were seen in PR (-5.8%) and market research (-4.7%), followed by sales promotion (-3.4%), direct marketing (-2.7%) and "other" (-1.1%).
Paul Bainsfair, director general of the IPA, said there were still signs for optimism despite evidence that confidence has been easing.
"As predicted by Bellwether, upward revisions to marketing budgets and confidence are easing. However the important point is they are still positive," he said.
"More specifically, there are upwards revisions to internet, events and main media advertising budgets in Q3. We are seeing marketers demanding greater accountability, physical presence and share of mind in their planned marketing spend."
Data sourced from IPA; additional content by Warc staff