11 July 2013 - 7:32am | posted by | 2 comments

IPA Bellwether report revises marketing spend up by largest margin in six years as marketers find confidence

IPA Bellwether report revises marketing spend up by largest margin in six years as marketers find confidenceIPA Bellwether report revises marketing spend up by largest margin in

The latest IPA Bellwether report has revised marketing spend up by the largest increase for almost six years, as confidence amongst marketers grows.

As the UK economy seemingly strengthens, marketing budgets across UK companies were revised sharply higher during the second quarter of this year, in order to support sales and product launches.

According to the survey, 43 per cent of the panel had grown in confidence during the second quarter of the year, in comparison with the previous period of 16 per cent of marketers feeling a growing pessimism.

While over a fifth of companies (22 per cent) indicate an increase in marketing spend, 15 per cent said they would likely spend less, leaving a net balance of 7.3 per cent, the highest since the third quarter of 2007.

For the year as a whole, 13.5 per cent of companies planned to increase their marketing budgets, while digital marketing budgets will be increased by 17.4 per cent of companies, mainly through SEO spend (+13.7 per cent).

Also recording and revised increase in budgets were PR (+3.4 per cent), sales promotion (+2.0 per cent), media advertising (+1.9 per cent) and direct marketing (+0.6 per cent). Market research budgets were unchanged, while ‘other’ is set to fall (-3.2 per cent) and events (-0.9 per cent).

Paul Bainsfair, director general of IPA, described the results as “very encouraging”.

He added: “Companies are beginning to shake off the cloak of recession and are becoming more confident in the economy. This bodes extremely well for continued growth in marketing spend for the rest of 2013. These figures should send a very upbeat message to the wider economy.”

With business confidence growing, and the economy predicted to expand at a quarterly rate of 0.5 per cent, the forecast cut in advertising spend of -0.3 per cent is expected to be revised up later this year to a prediction of modest growth and advertising spend forecast to grow at a rate of over 4 per cent by 2017.

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Comments

11 Jul 2013 - 15:25
MarkOsman's picture

It is great to see the industry is finding some momentum and confidence is returning to the UK market amid a slow and steady broader economic recovery. Of course, it is no surprise to see that internet continues to be the key driver in the recovery as more and more companies look to take advantage of the cost effective and trackable medium. However, the industry ignores the other traditional direct marketing channels at its peril.

In an age where consumers are bombarded with messages online, brands would do well to separate themselves from the competition by using a blend of channels to communicate with their consumers. The better advised companies will let the data decide which channel to use for which consumer. It is important to achieve real cut through by engaging their target audience via other media than always using the same vaunted and fashionable mediums.

Mark Osman, Managing Director, Eclipse Marketing

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12 Jul 2013 - 12:31
volum42680's picture

The latest Bellwether Report is one of the most optimistic in recent memory and highlights the cautious confidence that the economic climate is improving.

It reflects that client confidence has grown and we are seeing them invest in intelligent and long-term marketing solutions, such as marketing automation tools. We should see the improved results continue for the remainder of 2013 as marketing becomes more strategic and insight-led with a focus on building long-term relationships with their customers.

The internet remained a key part of the growth witnessed in Q2. The increase in usage and ownership of connected devices and the upcoming launch of 4G means that this is a trend which is likely to continue. This confirms what was identified at the start of the year – the traditional agency model is changing, and those that will succeed in our industry will be the agencies that can offer clients an integrated proposition that includes activity on all relevant channels, delivered in a seamless way.

No longer can agencies work on single offerings and as marketing teams decrease in size, clients are relying more than ever on agencies as marketing and business partners. We are increasingly expected to offer propositions and solutions over a number of growing channels all at once.

It goes without saying that this will have an impact on the skill set needed within an agency, but we're also seeing new structures developing to accommodate the rapid change in demand for the styles of services offered. The challenge in the coming year lies in maintaining the highest level of service while guiding clients through this.

Chris Sykes, CEO, Volume

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