Marketing budgets reach the third highest level in Bellwether history as Q3 2014 results are announced
Marketing budgets were revised up for the eighth consecutive quarter the Q3 2014 IPA Bellwether Report, published today (Thursday 16 October), has revealed.
According to the results budgets reached their third highest level in the survey’s history and a net balance of 12.6 per cent of companies registered an increase in budgets during the quarter, though this was down for the second quarter running.
A net balance of 38.6 per cent of companies said they had grown more optimistic about financial prospects compared with three months ago and confidence in the wider financial industry remained high, despite the net balance slipping to a five-quarter low of 30.4 per cent from 33.0 per cent in Q2.
As the Q3 survey marking the mid-point of the 2014/15 financial year the results suggest that full-year marketing budgets are due to be higher than initially estimated with marketing executives at their most upbeat for seven years. Over a quarter (26 per cent) of companies also recorded uplift in marketing budgets, relative to the 2013/14 accounting period.
Paul Bainsfair, IPA director general, commented: “Two years of continuous investment in marketing budgets, coupled with sustained confidence, has enabled the industry to innovate and diversify, and crucially to drive business growth. It is good to see companies adapting to the complex media landscape and capitalising on the positive economic climate.”
Adspend growth of seven per cent is predicted in 2014 as data shows an increasingly positive UK business climate as companies invest more in brand building and expanding sales. However, this growth will likely cause higher interest rates leaving the Bellwether to predict lower adspend growth of 3.8 per cent in 2015.
Internet advertising budgets make the sharpest upward revisions, up 14.5 per cent, with main media advertising following at 9.2 per cent. The net balance to internet was below the Q2 one-year high of 14.7 per cent. Search recorded a net balance increase of 9.4 per cent which extended the current run of growth to 21 successive quarters despite being the weakest since Q4 2013. Main media advertising was the joint-third highest in Bellwether history.
Events recorded a net balance of 7.8 per cent and modest upwards revisions were made for direct marketing (2.1 per cent) and PR (1 per cent), sales promotions, market research and other all faced budget reductions of 1.1 per cent, 1.7 per cent and 4.7 per cent respectively.
Of marketing budgets reaching their third highest level since the survey began in 2000, Chris Williamson, chief economist at Markit and author of the Bellwether report, said: “This represents a remarkably positive picture of companies gaining confidence about the economic outlook as the year has proceeded, ploughing more money into budgets that had already been set higher at the start of the year. At this rate, 2014 is panning out to be the best year for growth of marketing spend in the survey’s 15-year history.”