UK marketing budgets pick up for first time in five quarters

Strong vaccination uptake, an end to virus containment measures and the release of pent-up consumer demand are among the factors contributing to an expansion of UK marketing budgets for the first time since Q4 2019, according to the latest IPA Bellwether Report. 

The headline figures 

• A net balance of +6.0% of surveyed companies expanded their total marketing budgets during the second quarter. (In Q1 a net balance of -11.5% of firms recorded spending cuts.)
• Public relations led the upturn with a net balance of +1.8% of firms growing their expenditure in this space (up from -8.0% in Q1). 
• Within main media (+1.3% vs -8.2% in Q1 ), video (+4.2% vs +3.3%), audio (+1.1% vs -9.0%) and other online advertising (+11.0% vs 0.0%) all grew; published brands (-6.1% vs -22.2%) and out of home (-7.5% vs -24.1%) declined, albeit more slowly.
• Direct marketing budgets returned to positive territory (+0.7% vs -11.8%), but sales promotions (-0.7% vs -16.2%), market research (-9.6% vs -17.8%) were cut. Inevitably, events budgets (-24.7% vs -43.2%) took the biggest hit.

Adspend forecasts revised, but... 

The Bellwether Report is now projecting a 7.5% growth in adspend in 2021 and 6.0% in 2022 before moderating to 2.7% in 2023 once the UK economy has recouped pandemic-related losses, subject to caveats about continued vaccine effectiveness and the impact on consumer spending that may result from the end of the furlough scheme and likely future tax rises.

Sourced from IPA