The latest IPA Bellwether Report says that adspend is likely to fall in 2016 and 2017, due to the uncertainty surrounding the Brexit vote.
68% of people questioned said that they were freezing their budgets over the quarter. While Bellwether has downgraded its adspend forecasts to -0.2% for 2016 and -1.3% for 2017. This is the first time that it’s predicted a fall since 2013.
“There’s no doubt that Brexit has introduced a significant air of uncertainty into the economy in general and potentially this could lead to a reduction in client budgets,” said Jackie Holt, IPA North West City Head and managing partner, BJL.
“The fact is that we still do not know what the longer-term outcome will be, so in the immediate term businesses may delay some investment decisions until after we have a new PM and we can see how negotiations progress and what standing outside the EU might actually look like.
“There seems to be some evidence that budgets were already taking into account the Brexit effect and this may mean that spend bottoms out for the next quarter. We live in interesting times and as advertising and marketing professionals we can only encourage clients to maintain spend and continue to make their every pound work to maximum effect.”
Despite this, there was a sharp uplift in marketing budgets for Q2 of 2016.
A net balance* of +10.7% said they would be increasing their marketing spend during the period. (*Those recording a downward revision from the previous quarter subtracted from those recording an upward one).
By sector, events marketing revealed a series record net balance of +13.4%; digital recorded a net balance of +10.9%; main media saw a marked uplift in Q2 to +9.3%; PR +2.3%; and ‘other’ +1.2%.
Within digital, SEO/search was up to +7.6%.
Market research was down -4.3%, as was sales promotion; while direct marketing was down -0.5%.