Marketing budgets revised upwards but confidence fades
The latest IPA Bellwether Report shows a mixed picture across the marketing sector, with budgets revised up again, but confidence falling to its lowest level in almost 3 years.
Despite the slowdown, the latest report shows sustained growth for 13 successive quarters, with predictions for 2016/17 also remaining positive.
Q4 2015 showed a net balance of +0.5% of companies registering an increase in their budgets. That’s down from +4.4% in Q3 2015. The figure is calculating by subtracting the percentage reporting a downward revision, from those reporting an upward one.
Paul Smith, senior economist at Markit and author of the Bellwether report explained that the figures were in line with the “softer UK macroeconomic environment.
“Moreover, as has been the case in the post financial-crisis world, companies are maintaining a keen sense of cost-consciousness and a value-for-money approach to their marketing budgets. Such forces have probably weighed on growth in the final quarter of the year.”
He added that it was now a case of waiting to see whether this quarter “proves to be a nadir in the current cycle or whether we have a little way to go before we again see a sustained upward trajectory in Bellwether.”
Regarding marketers’ own financial prospects, +20.4% said that they had grown more optimistic about their prospects compared to the last quarter. This was down from 22.4% in Q3 and the lowest level for 11 quarters.
Broken down by sector, internet marketing remains the strongest area, with +6.9%; SEO/search was +5.8%. Main media was +1.1%; PR +0.6% and events +0.6%.
“Other” showed a decline of -12.1%, sales promotions -7.7%; market research -7.3%; and direct marketing -1.7%.