LONDON: UK marketers revised their internet budgets up in the second quarter, helping to fuel overall growth in marketing budgets, according to the latest IPA Bellwether Report, but its author has cautioned that this increase is defensive in nature.

The Q2 2018 Bellwether Report, based on data drawn from a panel of around 300 UK marketing professionals, noted a strong drive towards digital-based advertising in the quarter as a net balance of +22.7% of firms revised their internet marketing budgets upwards.

And within that broad category, panellists were boosting spending plans for search/SEO marketing, as signalled by the net balance rising from +5.6% in Q1 to +11.0% in Q2.

But total growth was more muted. While 23% of panellists indicated higher spending plans for overall marketing activity during Q2 2018, just below 17% pointed to lower budgets. The net balance of +6.5%, equated to one of the lowest in two years.

Joe Hayes, Economist at IHS Markit and author of the Bellwether Report, acknowledged that the pickup in marketing budget growth was weak, but observed that it was still welcome at a time when industry-wide financial prospects appeared to be deteriorating, in part because of the continued impasse in Brexit negotiations.

“[The] latest growth is partly defensive in nature,” he added. “Margins are being tested by increasing competition and firms are raising budgets largely to sustain market share and profits.”

The net balance for main media advertising remained positive in Q2 at +4.9%, helped by spending on the World Cup, as did events (+4.3%) and sales promotion (+4.0%) marketing budgets.

Those for direct marketing (-3.2%), market research (-7.2%), PR (- 6.5%) and ‘other’ (-10.3%) all returned a negative net balance.

Paul Bainsfair, Director General of the IPA, highlighted the interaction between TV and digital. “You only have to look at the recent hype surrounding Love Island and the World Cup – whether that’s crowding around the big screen, huddling around the box, adding to #GarethSouthgateWould or passing on the ‘It’s coming home’ memes – to realise that consumers are deeply ensconced in screen-based activity,” he said.

“As the evidence shows, television is the most effective medium for advertisers to build their brands and adding digital media to the mix enhances the effectiveness of traditional media. It therefore makes infinite sense that advertisers are investing their money here.”

Sourced from IPA; additional content by WARC staff