Growth in events budgets signals COVID-19 adjustment

Total marketing budget growth in the UK was close to an eight-year high in the first quarter of 2022 as businesses adjusted to living with COVID-19, according to the latest IPA Bellwether Report.

Published today, this shows that total marketing budgets were upwardly revised by nearly one-quarter of panellists (24.1%) during the first quarter of 2022, while 10.0% recorded budget cuts, yielding a net balance of +14.1% (vs. +6.1% in Q4 2021).

This was the highest since Q2 2014 and signals a new confidence among marketers as they adapt to the government’s "living with COVID-19" strategy, alongside a further easing of pandemic restrictions during the first few months of the year.

Growth by category in Q1 2022

• That adaptation is nowhere more evident than in the top-performing segment: events had a net balance of +18.7% (up from -3.9% in Q4 2021) as businesses began planning larger-scale gatherings with clients and set up exhibitions. 
• Solid budget expansion was also seen in main media (+9.4%, from +3.1%), with other online (+18.6%), video (+9.0%) and published brands (+1.3%) driving growth in this segment. 
• Out of home and audio continued to decline, however (-4.6% and -8.5% respectively). 
• Elsewhere, sales promotions (+8.0%, from 0.0%) and direct marketing budgets expanded (+6.0%, from +3.8%). 
• The final category to register growth was PR, although the expansion here was only marginal (+0.6%, from +2.0%).

Outlook 2022/23

• A total of 43.8% of respondents anticipate growth in their available marketing spend in the coming year, while 10.6% expect cuts – a net balance of +33.1%.
• All monitored marketing activities are set to receive budget expansions, led by events (+22.1%) and main media (+20.1%).
• But business sentiment remains mixed as positive company-own projections (+6.6%) come amid worsening industry-wide outlook (-3.6%).

• Adspend growth forecasts for 2022 and beyond have been lowered as rising living costs are expected to hamper economic growth.

Risks abound 

“Living costs are rising, we may see inflation get close to or even hit double digits in the coming months, and this will weigh on purchasing power. Supply chain issues are still prevalent and have been exacerbated by the war in Ukraine. Rising geopolitical tensions also create uncertainty, and it may lead to companies re-assessing their decisions until all of these risks reduce” – Joe Hayes, senior economist at S&P Global and author of the Bellwether Report.

Sourced from IPA [Image: IPA]