Mediatel Logo original-file's-desc Mediatel Logo Connected: Display Connected: Media Landscape Connected: Regional Connected: AV Consumer Surveys Connected: Direct LinkedIn LinkedIn logo icon Twitter Twitter logo icon Youtube Youtube logo icon Flickr Flickr logo icon Instagram Instagram logo icon Mail Mail icon Down arrow

IPA Bellwether: Marketing budgets increase at accelerated pace

16 Apr 2015  |  Ellen Hammett 
IPA Bellwether: Marketing budgets increase at accelerated pace

For the 10th consecutive quarter marketing budgets increased at an accelerated pace in Q1 2015, according to the latest IPA Bellwether Report, published today, revealing that overall growth in marketing budgets for 2014/2015 was the best recorded in a decade.

The report, which has been conducted on a quarterly basis since Q1 2000, revealed a net balance of +11.8% of companies registering an increase in budgets in Q1 2015, up markedly from +6.1% in Q4 2014.

The latest data marked the final quarterly reading for the 2014/15 budget year, and with upward revisions to budgets signalled throughout the period, overall growth for the year was the best recorded since 2004/05 with a net balance of +21.8% of companies indicating that budgets had risen over the year.

In terms of actual spend, Bellwether data for the 2015/16 budget period showed that a net balance of +28.0% of panellists are forecasting an increase in their marketing budgets relative to 2014/15.

This is the most upbeat assessment signalled by the panel for eight years, and all Bellwether categories are forecast to benefit from this expected upward revision to total marketing budgets.

Events and main media advertising are predicted to be the largest beneficiaries, suggesting that companies will continue to maintain spending on both high-level campaigns (such as TV, cinema and press), and look to further increase their footprint in cost-efficient online marketing solutions.

The general confidence signalled by marketing executives reflects growing optimism about their own and wider industry financial prospects.

A net balance of +37.8% of companies have grown more optimistic about their own financial prospects, compared to +30.7% in Q4 2014. The net balance for wider industry financial prospects rose from +16.2% in Q4 2014 to +26.0% during Q1 2015.

Positive prospects for finance and marketing budgets are rooted in a strengthening macroeconomic climate. Allied with official estimates from the Office for Budget Responsibility (OBR) indicating solid growth rates of both consumer spending and investment in 2015, the latest Bellwether survey predicts a real-term increase in UK adspend of +4.2% in 2015 before growth cools slightly in 2016 to +3.6%.

By sector

The highest upwards revisions to marketing budgets in Q1 2015 were made to internet, recording a net balance of +8.4%. This extends its run of growth to 23 successive quarters, although this was the lowest upwards revision in just over two years and was down from a six-quarter high of +15.1% in Q4 2014.

Within internet, spend related to search/SEO also increased, recording a net balance of +8.5%, although this was also down from Q4 2014's net balance of +15.7%.

Events budgets were also revised higher, recording a net balance of +5.7% which extends its period of growth to a year-and-a-half; as were direct marketing (+5.5%), which recorded its best performance since Q3 2010.

Main media advertising budgets were revised up for the fifth consecutive quarter (+2.9%) although to a much lower rate than Q4 2014's +6.7%.

Sales promotions (+0.6%) also recorded growth, but 'other' (-7.1%), PR (-1.8%) and market research (-1.3%) all recorded downward revisions.

"With over 10 successive quarters of growth in marketing budgets and the best budget year for marketing spend in a decade, this latest Bellwether provides welcome evidence of the extent to which clients recognise and value the significant contribution marketing communications makes to their business success," said Paul Bainsfair, director general of the IPA.

"This stands us in good stead for what is set to be an unsettled few months politically."

Paul Smith, senior economist at Markit and author of the Bellwether Report, said: "Following the dip in the headline net balance during Q4 2014, the latest Bellwether indicated a welcome re-acceleration of growth in marketing spend over the first three months of the year.

"While many commentators await to see what form Britain's post-election economic landscape takes, marketing executives seem to be shrugging off any uncertainty. Indeed, latest data shows companies planning to bolster their marketing budgets for the forthcoming accounting period to the greatest degree in eight years."

Smith added that growth looks highly likely to be extended into a third year in 2015/16, and that a strong real-term increase in UK adspend over 2015 as a whole is expected.

Connected Modules
To understand more about the fast moving connected marketplace, Mediatel Connected features the latest market data, consumer surveys and analysis to keep you ahead.
Find out more
Leave a comment

Thank you for your comment - a copy has now been sent to the Mediatel Newsline team who will review it shortly. Please note that the editor may edit your comment before publication.