Upbeat Bellwether shows marketers are finally winning boardroom budget battle

The quarterly temperature check of 300 UK marketers found that over a quarter of respondents (26%) had their marketing budgets revised upwards in the final quarter of 2023, which is more than double the number that had budgets cut (11.3%).

The report’s optimism is in stark contrast to last quarter, when just 12.1% of marketers claimed they felt positive about their commercial outlook.

Looking ahead to 2024/2025, a very healthy 44.5% are anticipating a budget boost compared with just 15.1% who expect cuts. The publication of the upbeat Bellwether comes as UK inflation rates spiked to 4% – the biggest increase in 10 months.

Despite the ongoing challenging economic climate, the IPA’s director general, Paul Bainsfair, said: “This quarter’s upbeat Bellwether findings show that companies are heeding the evidence that continuing to advertise through the tough times can help maintain brand loyalty and protect the long-term health of their brands.”

The survey did reveal that many companies were planning to adjust their prices more competitively – a strategy Bainsfair warns against. “With the evidence showing that investing in advertising helps protect sales when businesses raise prices, it may prove more profitable for companies to increase their advertising than reduce their pricing.”

According to Rebecca Rosborough, chief marketing officer and chief commerical officer at cloud-based brand-building platform Frontify, the report shows that “marketers are clearly winning their boardroom battles to defend budgets.” But, she warns, now is not the time to get complacent.

“It will be a question of who takes forward the lessons from the ‘do more with less’ era to make their now much larger budgets work even harder for them,” she says. With less restriction on “purse strings,” Rosborough is starting to look ahead to investment in “long-term brand-building and the big return of events marketing that looks set to help brands get in front of customers again in fresh and exciting ways.”

Events spend saw the biggest growth, with 15.9% more companies increasing their investment compared with the previous quarter, along with direct marketing, which made a surprising comeback in Q4 with 12.6% more companies upping budgets (the channel’s highest quarterly budget growth since 2005). Events and direct marketing drove the majority of total budget growth in 2023.

Encouraged by the results is Cat Hann, the senior brand manager at alcohol-free brand Days. She says it has been interesting to see event budgets grow. “The pandemic took a lot online, which has been amazing in so many ways, but has meant consumers are craving meaningful, real-life experience. I think the key to winning here is how you link your experiential efforts with digital to really maximize awareness. Consumers love to feel part of events, even if that is online.”

The report also forecasted a 0.7% decline in ad spend in 2024, but with the economy expected to improve by the second half of 2024, ad spend is projected to grow by 1.1% in 2025.

Expedia for business president Ariane Gorin is seeing ad spend increase, with big and small brands “investing marketing budgets towards new and existing customers in 2024 and capitalizing on emerging consumer trends.” Gorin says brands are putting spend into TV, cinema and influencers to drive travel spend. The report, she adds, “is a clear indication that brands are feeling consumers’ return to confidence.”

When asked how optimistic they were about their businesses, nearly one-third (32.4%) said they were more upbeat than the previous quarter, compared with 19.8% who felt more downbeat (this is the most positivity since Q3 2021).

However, when reflecting on the bigger picture, respondents remain glum about the continuing cost of living crisis and the impact of the war in Gaza, as well as uncertainty around consumer behavior change during the UK and US elections.

Stephen Davis, marketing director of EMEA and managing director for the UK and Ireland at Roland, says while the report is promising, he will remain “pragmatic.”

“As we navigate the evolving marketing terrain, our approach is guided by the current economic climate, striking a balance between innovation and fiscal responsibility.”