IPA predicts average marketing budget increase of 1 per cent for 2013 with latest Bellwether report

Marketing budgets have been revised up with 17 per cent of companies reporting a rise in spend for the fourth quarter of last year, the latest IPA Bellwether survey has discovered, although average spend is likely to only increase by 1 per cent this year.

The slight rise of 1.1 per cent in total, with 16 per cent of companies also reporting plans to cut their budgets, seems to indicate that there is a cautious optimism among marketing executives for 2013.

Despite this, the survey also found high levels of pessimism among marketing executives as the economic environment continues to be weak and consumer spending still relatively low.

As a result, the IPA is predicting an increase in advertising spend of 1 per cent, although its new predictive model created for the quarterly report also predicts an accelerated increase of 4.6 per cent in 2017 (see forecast table.)

Online advertising budgets remain the strongest area with 5.6 per cent growth, and a revised increase in SEO spend of 7.8 per cent.

Sectors set for decline in spend are events, PR and ‘other’, although direct marketing and media sectors spend had improved with a smaller decrease than was witnessed in the previous quarter.

Nicola Mendelsohn, IPA President and executive chairman and partner of Karmarama, said that the marketing figures saw the high rate of growth in over a year. “Advertisers also have a growing sense of cautious optimism about their own financial prospects and are planning to increase their 2013 budgets higher than 2012 levels. So while we continue to operate amidst a difficult economic backdrop, we should nevertheless take encouragement from these figures, and do all that we can to remain positive in meeting the challenges we face.”

Chris Williamson, chief economist at Markit and author of the Bellwether also recognised that companies had ‘grown more positive’ about their financial prospects, setting their marketing budgets higher as a result. “However, the initial increase is one of the smallest seen over the past 12 years, with only 2012 seeing a more downbeat start to the year,” he added.

"Companies remain cautious about raising expenditure on marketing activities due to weaker than expected sales and profits last year and ongoing uncertainty about the economic outlook at home and abroad.”

Earlier this week Nielsen reported international advertising growth in spend of 4.3 per cent for the third quarter of 2012, while

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