Marketing budget growth is directed towards promotion | WARC | The Feed
You didn’t return any results. Please clear your filters.
Marketing budget growth is directed towards promotion
Sales promotion Advertising expenditure & forecasts Strategy
Sales promotions budgets are growing at the strongest pace in nearly two decades as companies dedicate more resources to supporting their customers through the cost-of-living crisis, according to the latest IPA Bellwether Report.
- In Q1 2023, the net balance of firms registering upward revisions to their marketing budgets stood at +8.2%, almost 4x higher than the +2.2% recorded in Q4 2022.
- While 21.1% of firms saw an expansion, 12.9% of firms registered budget cuts and around two-thirds (66.0%) recorded no change in spending.
- Main media marketing had a net balance of +5.8%: strongest performing constituents were other online (+10.5%, from +6.3%) and video (+7.9%, from +13.7%), while audio also saw an upturn (+1.7%, from 0.0%). Published brands (-1.9%, from -3.9%) and out of home (-12.4%, from -8.8%) were, however, drags on main media in Q1.
- Sales promotions budgets returned to expansion in Q1 (net balance of +8.8%, from -4.0%), and events also edged up (net balance of +6.3%, from +5.7%) as marketing executives looked to re-engage with new and prospective clients face to face. Direct marketing spending also rose at the start of the year (net balance of +4.2%, from -0.6%).
- A net balance of -0.6% of firms cut their PR budgets (from -1.9%), while a modest reduction was seen in market research spending (net balance of -3.2%, from -8.8%).
- More than a third (36.6%) of respondents foresee greater total marketing spend in real terms in the year ahead, compared with 16.9% anticipating cuts. This yielded a strongly positive net balance of +19.8%.
- Sales promotions budgets are set to rise in 2023/24 (net balance of +6.3%); market research is the only segment where budgets are set to be reduced (net balance of 0.7%).
- When assessing their own company’s financial prospects, a net balance of +7.0% of respondents were optimistic (vs a net balance of -17.2% previously).
- At an industry-wide level, a net balance of -7.1% signalled the weakest degree of negativity in a year and compared with a reading of -33.2% previously.
“Consumers will welcome sales promotions, as inflation keeps prices high. However, neglecting brand investment for short-term gains is a risky business. Let’s hope pricing for the moment does not overpower building for tomorrow” – Alex Uprichard, Managing Director, IMA-HOME and IPA City Head for Leeds, Yorkshire and Humberside.
Sourced from IPA Bellwether
Email this content