Marketing budget growth at strongest in over four years

Total UK marketing budgets have increased at the strongest rate since Q2 2017, according to the Q3 IPA Bellwether Report, as an effective vaccine program and the loosening of pandemic-related restrictions enable pent-up consumer demand to find expression.

Key findings 

• A net balance of +12.8% of firms registered upward budget revisions in Q3 2021, from +6.0% in Q2 (the first time in three years that successive quarters of growth in overall marketing spend has been registered).
• Main media advertising was the best-performing marketing category in the third quarter, with a net balance of +8.6% of firms recording upward budget revisions (from +1.3%), as more firms upped their spending on 'big-ticket' campaigns.
• Within main media, video (+12.6%, from +4.2%) was the main driver, followed by other online (+10.6%, from +11.0%) and audio (+6.0%, from +1.1%).
• Adspend is predicted to grow 6.6% in 2021 and 6.2% in 2022 before normalising from 2023 onwards. 

A note of caution 

While upward revisions to total marketing budgets were strong, they fell short of the growth firms initially had predicted for the 2021/22 financial year, when a net balance of +17.4% of firms anticipated expansion. There remain concerns around the trajectory of virus cases as we head into the winter period, while ongoing supply chain disruptions are also affecting the ability of some firms to carry out marketing campaigns.

Key quote

“We hope this is just the beginning, and businesses continue with their aggressive growth plans to keep momentum moving as the post-lockdown growth boom peters out” – Joe Hayes, senior economist at IHS Markit and author of the Bellwether Report.

Sourced from IPA