Total UK marketing budgets continue to grow: IPA Bellwether

Recession is looming in the first half of the year but UK marketing budgets overall continue to grow: the Q4 2022 IPA Bellwether Report, published today, records a net positive balance in marketing spending for the seventh successive quarter and signals more of the same in the year ahead.

Headline figures are optimistic

Around one-fifth of survey respondents upwardly revised their total marketing spending in the fourth quarter (20.2%), while 18% registered budget cuts. The net balance of +2.2% was little changed from the Q3 figure of +2.1%. 

A large proportion of surveyed companies (39.5%) expect total marketing budgets to be higher in 2023/24, while only 15.3% anticipate spending cuts. A strongly positive net balance of +24.2% indicates a robust outlook among UK marketers.

But business sentiment is subdued

Bellwether panellists remain mostly pessimistic about the financial outlook within their own industries (-33.2%) and their own companies (-17.2%), although these negative net balances are an improvement on three months ago. 

The category details 

• Events (net balance of +5.7%, vs. +4.5% previously) was the top-performing category in Q4.
• Main media marketing saw a return to growth (net balance of +4.4%, vs. -3.1%). 
• Breaking down main media, video (net balance of +13.7%, vs. +8.7%) and other online (net balance of +6.3%, vs. +9.3%) were the drivers of growth. 
• Audio budgets were unchanged (net balance of 0.0%, vs. -2.0%), while published brands and out of home saw declines (net balances of -3.9% and -8.8%, vs. -11.2% and -7.6% respectively).
• Direct marketing saw a marginal reduction (net balance of -0.6%, unchanged from previously), while PR budgets were cut modestly (net balance of -1.9%, vs. -4.8%). 

• Sales promotions budgets struggled as companies were concerned about margins (net balance of -4.0%, vs. -7.5%). 
• Market research (net balance of -8.8%, vs. -4.1%) and other marketing activities not already accounted for (-10.1%, vs. -10.5%) saw budgets contract.

Key quote

“We can see that the companies that can are holding their nerve and continuing to invest in marketing through the downturn, with supporting anecdotal evidence from the report also revealing that a lot of companies who are concerned about losing market share to competitors have either maintained or increased their spend accordingly. This indicates that marketing is being used both defensively and offensively” – Paul Bainsfair, IPA Director General.

Sourced from IPA

[Image: IPA]