The latest IPA Bellwether Report shows that UK companies remain confident about their marketing spend, but that it is slowing.
It marks 2 years of continuous growth for marketing budgets, with a net balance of +12.6% of companies registering an increase in budgets during the third quarter of 2014.
Due to positive economic data, adspend is predicted to grow by 7% in 2014, but that growth may signal a rise in interest rates, which the report predicts, will cause growth to slow and adpsend in 2015 is forecast at +3.8%.
The net balance is calculated by subtraction the percentage of companies reporting a downward revision, from those reporting an upwards one.
“The upbeat Bellwether results paint an encouraging picture for the UK economy, marking two years of continuous growth. Marketing budgets are still rising with the internet and main media being the biggest spenders. 2014 is turning out to be a great year,” said Peter Craven, IPA city head for Manchester and managing partner, Madhouse.
By sector, digital marketing continues to drive the growth, with a net balance of +14.5% (Q2: +14.7%), with search at +9.4% (Q2: +12.9%). Main media was also up at +9.2% (Q2: +11.5%).
Events is +7.8% (Q2:+ 7.8%); direct marketing +2.1% (Q2: +4%), and PR +1.0% (Q2: +3.9%).
However, sales promotions fell to -1.1% (Q2: +3%), market research was down again at -1.7% (Q2: -2.4%) and other was also down at -4.7%.
“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,” said Chris Williamson, chief economist at Markit and author of the Bellwether report.
The report is researched and published by Markit Economics on behalf of the IPA.