As expected, UK marketing budgets continued to decline into Q4 2020, though less sharply than in Q3, but with recovery on the horizon, marketers are echoing consumer sentiments of macro gloom while also being more positive about the prospects for their own company.

What it means 

The turmoil of 2020, where lockdown restrictions actively shut down certain advertising formats (such as cinema), appears to be edging closer to equilibrium in 2021. Greater positive sentiment, despite a strange macro picture, suggests that brands are planning to lay the foundations for recovery.  


  • A net balance of -24.0% of panellists from the Institute of Practitioners in Advertising's (IPA) latest Bellwether Report logged a contraction in marketing budgets during the final quarter of 2020.
  • Just 16.4% of firms noted an increase in available funds.
  • Some 40.4% of firms experienced a decline.

IHS Markit, which co-authored the report, anticipates the following totals for last year as a whole:

  • 11.6% decline in GDP;
  • 15.6% dip in consumer spending;
  • 12.7% decrease in business investment;
  • adspend, as a result, saw a 17.8% decrease.

Glimmers of hope

The latest net figure of -24.0% is more moderate than Q2 (-50.7%) and Q3 (-41.0%) last year. Unsurprisingly, the COVID-19 pandemic is the key reason given for the continuing negative trend.

Looking ahead to 2021

  • The coming financial year, 2021/22, is more optimistic, with a net balance of +12% of firms expecting total marketing budgets to be revised upwards.
  • With vaccine rollouts gaining pace, IHS also expects robust adspend growth of 6.9% and 6.2% in 2021 and 2022 respectively, off the back of a return to GDP growth of 3.5% in 2021.

Conflicted sentiments

Every quarter since the beginning of 2016, Bellwether panellists have expressed pessimism towards the marketing industry’s overall financial prospects. But Q4 2020’s -5.8% net total is the shallowest since 2017, and far better than the steep negatives recorded in the first three quarters of the year.

Interestingly, optimism abounded when panellists talked about their own company's prospects, with a net balance of +18.1% of firms now more confident of an improvement, compared to -3.9% three months ago.

Reasons to be positive

“Budget plans for 2021/2022 are into positive territory. As the vaccination roll-out continues, as the lockdowns begin to ease and as firms adapt to post-Brexit rules, perhaps we can dare to ready ourselves for the roaring twenties after all,” commented IPA Director General Paul Bainsfair in a statement.

Sourced from the IPA