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Marketing budgets up but main media falls


Events is leading the way, as marketing budgets take an upturn, in today’s IPA Bellwether Report.

The Q1 report looks at marketing spend intentions and confidence levels in UK companies.

The headlines are that total marketing budgets are up, with the second strongest upturn since the second quarter of 2022. However, they are down compared the highs of the end of 2023.

Events budgets are expanding at the fastest rate on record, with 2024/25 projected to be a strong year for the sector, which was hit hard during the Covid pandemic. 

Main media advertising budgets revised lower for first time in three quarters

“With the arrival of spring comes a natural surge of optimism and energy. And despite lingering caution, the Q1 2024 IPA Bellwether Report brings encouraging news of sustained growth in total marketing budgets,” said Richard Aldiss, IPA Chair for England & Wales.

“We are seeing brands actively refining their channel strategies, investing in more data-driven, personalised direct communications and experiences. However, success in maintaining customer loyalty, driving growth, and staying competitive hinges on investment strategies that comprehensively address the entire customer experience.”

24.4% of those questioned recorded an upward to revision in their overall marketing budgets in the first quarter – that compares to 15% saying there would be a contraction. This means a net balance of +9.4% (down from +14.7% Q4 2023.)

By category:

  • Events – +23.1%, up from +15.9%;
  • Direct marketing +7.0%, from +12.6% 
  • Sales promotions budget growth +4.9%, from +1.4%
  • Market research  +1.4%, from -5.0%) 
  • PR +0.6%, from +1.9%
  • Main media segment -0.7%, from +1.9% 
  • Other marketing activity -4.3% from -6.4%

Within main media, the contraction was mainly driven by out of home -10.8%, published brands -5.7% and audio -4.5%. Online was still positive, but fell from +13.2% to +7.1% and Video was down to +0.8%, from +6.6%. 

“Green shoots of recovery are appearing across the UK economy. With business survey data suggesting UK GDP will expand in the first quarter, it’s no surprise to see another strong round of marketing budget growth,” said Joe Hayes, Principal Economist at S&P Global Market Intelligence and author of the Bellwether Report.

“Cost-of-living pressures and high borrowing costs has led household and businesses to retrench in recent times, making the market more competitive to earn and retain customer business. Throughout this period, we’ve seen marketing perform strongly, so it’s very encouraging to see that firms are staying true to the course that has clearly yielded positive results.”

Looking ahead to 2024/25, marketing budgets were “strongly positive”, with 40.7% of the survey panel increasing the total amount available for marketing, compared to 18% reporting cuts. The resulting net balance was +22.8%.

Events is still expected to be a winner with a +18.7% of survey respondents anticipating an uplift in spend compared to the previous financial year. 

This was well ahead of the second best category of direct marketing at +11.9%. 

It also appears that main media could be a blip, with a net balance of 10.1% expecting to increase spend in this sector, particularly through PR (+6.3%) and sales promotions (+6.0%).

“The latest IPA Bellwether Report is welcome evidence that optimism about the year ahead is well placed,” stated Alex Uprichard, Managing Director, IMA-HOME and IPA City Head for Leeds, Yorkshire and Humberside.

“Continued growth in marketing budgets and more positive economic indicators suggests our industry is in a healthy position and consumer pressures are easing a little. The shape of budgets continues to buck trends this quarter, with traditional advertising budgets revising down again and events continuing to fly with the fastest growth rate on record. We’re out of the post pandemic hangover and consumers are actively engaging with and benefiting from brand led experiences in real life.”

Sue Benson, Managing Director, The Behaviours Agency and IPA City Head for Manchester & North West added:

“Spring has definitely brought with it some green shoots of recovery, and whilst we’re far from out of the woods yet (Q1 cooling noted) there does appear to be optimism for marketing budgets for the rest of the year. What I find most fascinating is the growth in Events and DM budgets. My view is that consumer behaviour is still being impacted by the covid legacy and interaction with both humans and physical things is a much sought after experience and importantly driving the response metrics brands are looking for.”

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