LONDON: UK marketers are putting Brexit concerns to one side as new research shows they revised their budgets up in Q1 2017, with significant growth recorded in internet and main media advertising categories.
This is according to data from the Q1 2017 IPA Bellwether Report, which surveyed a panel of around 300 UK marketing professionals to provide a key indication of the UK economy's health.
The latest results continue a record four-and-a-half year run of growth in marketing budgets. Internet budgets picked up the greatest increases with search and SEO marketing activities rising to their highest degree in over two years.
Main media advertising also saw a strong upward revision that grew its net balance to +10.7% in the first quarter of this year, compared with +5.1% in Q4 2016.
Overall, the outlook for 2017/18 is positive with 26.1% of companies suggesting growth in total budgets for the coming year.
The Bellwether report now expects that adspend will grow by 0.6% in real terms over the course of the year, replacing the previous forecast of -0.7%.
Though companies' financial prospects have strengthened in the opening of this year, marketers' confidence in the wider industry's business prospects remained negative, continuing a slump that has now lasted for five quarters.
The report arrives in the wake of the IMF's revised 2017 growth forecast, that reverses almost all of the downgrades issued after the UK's vote to leave the EU. The country's economy is now predicted to grow by 2% this year.
Paul Smith, Senior Economist at IHS Markit, which researches and publishes the report on behalf of the IPA, said the survey "paints a picture of a solidly growing UK economy" but he added a note of caution.
"Given the prevailing backdrop of Brexit-related economic uncertainties, a key question is whether the resilience in spend shown post-referendum can be maintained."
Looking ahead, the report predicted that adspend would flatline in 2018, before returning to growth in 2019 and 2020.
Reflecting on the state of limbo the country is experiencing ahead of Brexit negotiations and eventual departure from the EU in March 2019, Smith concluded that "degrees of confidence remain historically low and panellists continue to note plenty of threats to the outlook."
Whether that will change in the light of yesterday's political developments remains to be seen. The prime minister announced her intention to seek a general election on June 6 in order to "guarantee certainty and security for the years ahead".
Data sourced from IPA Bellwether Report, Financial Times; additional content by WARC staff