LONDON: UK marketers remain optimistic about the year ahead but slightly less so than three months ago, according to the latest IPA Bellwether Report which also found that marketing budgets were revised up only marginally in Q4 2015.
There was a net balance of +0.5% of companies surveyed registering an increase to their budgets during the final quarter of last year, down from +4.4% in the third quarter.
This marked the lowest upward revision in 11 quarters, reflecting what IPA Director General Paul Bainsfair described as "inevitable easing due to macroeconomic concerns".
That was also evident in the figures regarding optimism around marketers' own financial prospects and their wider industries.
A net balance of +20.4% of companies indicated they had grown more optimistic about their own prospects compared to three months ago, down from +22.4% in Q3. The net balance for wider financial prospects was +7.0%, little changed from +6.8% reported in Q3.
Despite this, there was a positive outlook for the coming year, as a net balance of +24.6% of companies signalled growth in their total budgets.
Consequently – and notwithstanding uncertainties over higher interest rates and the UK's continued presence in the EU – the IPA Bellwether forecast a steady expansion of 3.9% in UK adspend growth in 2016. "Not a bad start to the year," Bainsfair remarked.
By sector, internet marketing continued to show the strongest upward revision to budgets in the fourth quarter, at +6.9%.
Main media recorded some growth (+1.1%), as did PR (+0.6%) and events (+0.6%). But declines were registered for 'other' (-12.1%), sales promotions (-7.7%), market research (-7.3%) and direct marketing (-1.7%).
"Companies are maintaining a keen sense of cost-consciousness and a value-for-money approach to their marketing budgets," observed Paul Smith, Senior Economist at Markit and author of the Bellwether report. "Such forces have probably weighed on growth in the final quarter of the year."
He added that the current run of expansion was the longest in the 16 years the survey had been running
"We therefore wait to see if Q4 2015 proves to be a nadir in the current cycle or whether we have a little way to go before we again see a sustained upward trajectory in Bellwether," he said.
The UK Expenditure Report, compiled by Warc on behalf of the Advertising Association, estimates that total adspend rose 5.5% in Q4 2015 from the previous year and 12.3% from the third quarter, pushing ad revenues above £5bn for the first time in a three month period.
Data sourced from IPA; additional content by Warc staff