Get a demo Do I subscribe? News sign-up
Print

UK marketers optimistic on 2017

News, 18 January 2017
Topics

LONDON: UK marketing budgets were revised upwards in the fourth quarter of 2016, according to the latest IPA Bellwether Report, which also highlights a positive outlook for the coming year.

Firms are shrugging off ongoing economic uncertainty and deteriorating industry financial prospects, the Report said, as it revealed a net balance of +12.9% of companies registering an increase to their budgets during Q4 2016, down only fractionally from Q3's nine-quarter high of +13.4%.

Looking ahead to 2017/18 budget plans, there was a net balance of +27.6% of companies signalling growth in their total budgets for the coming year. (A reading below zero indicates that a greater proportion of panellists have become more pessimistic than optimistic over the past three months).

This was backed up by panellists' confidence about the financial prospects for their own companies, recording a net balance of +11.2%, up from +10.6% in Q3.

That attitude was not reflected in their views on the wider industry, however, as a net balance of -14.6% of companies indicated a weakening in their confidence regarding industry financial prospects in the final quarter of 2016. This was down on Q3's -12.1% and the lowest level recorded for four years.

But the boost to marketing budgets, combined with a 2.1% rise in GDP in the fourth quarter, was enough for Bellwether to forecast 2016 adspend would rise by 2.1% rather than its previous figure of 1.9%.

Brexit-related uncertainty will hit investment in 2017, however, when consumer spending growth is also likely to be slower than before. Debbie Klein, CEO, Engine Europe, noted that "consumers tend to gravitate towards brands that they know and trust during times of uncertainty", so "it is important, now more than ever, that brands continue to invest in their reputation and profile by communicating with their key audiences".

The Report's forecast for spending growth in 2017 remains unchanged at -0.7%, but it now anticipates 2018 spending picking up more strongly than before, at +0.8% against a previous estimate of +0.2%.

In terms of categories, the strongest upward revision to budgets in the fourth quarter was recorded by events (+12.3%), followed by internet (+12.1%). Main media advertising staged a recovery, rising to +5.1% from -3.8% in Q3, while the 'other' (+3.6%) and PR (+2.8%) also registered a positive balance.

In contrast, sales promotions (-1.8%) and market research (-2.5%) both recorded declines, while budgets related to direct marketing (0.0%) were unmoved.

Data sourced from IPA; additional content by Warc staff

Topics