Marketing budgets are still growing according to the IPA’s latest quarterly Bellwether Report but at the slowest rate since Q1 2016. 23.9 of marketers surveyors said their budgets were increasing, 15.2 per cent that they were headed in the opposite direction.
Looking further ahead compiler Markit says UK adspend in set to slow markedly in 2018 to just 0.3 per cent.
Internet remains the best performing category but traditional main media are feeling the pinch. Internet spending rose 10.9 per cent, less than the previous quarter’s 17 per cent and the lowest increase recorded since 2016. PR was the worst perfuming category (down 6.6 per cent) although much PR activity now falls under digital.
IPA director general Paul Bainsfair says: “Looking at quarter-on-quarter results it is clear that uncertainty from the wider geo-political situation continues to affect a cautious approach from marketers regarding their budgets.
“That said, we must take comfort in the fact that budgets have been revised up overall in Q4 and that as ever the ability for advertising to drive business growth cannot be underestimated.”
Bellwether Report author Paul Smith says: “A relatively lacklustre fourth quarter ensured that 2017 proved to be a year of two halves. After a strong first half, marketing budget growth was notably slower in the final six months of 2017 culminating in Q4 with the weakest upward revision to budgets since the start of 2016.
“Whilst fears of a sharp deterioration in the UK economy following the surprising EU referendum result in 2016 have so far proven to be unfounded, the current trend in growth signalled by the Bellwether survey is nonetheless consistent with an economy undermined by ongoing Brexit uncertainty and an increasingly common “wait-and-see” attitude amongst businesses and consumers alike.
“Companies have subsequently adopted a similar attitude towards their marketing budgets. Whilst willing to expand in perceived cost-value areas such as digital they continue to do so by weighing down on budgets related to traditionally bigger-ticket main media campaigns.”
UK adspend has proved remarkably buoyant amid all the post-Brexit shenanigans and forecasting the future is more difficult than ever. The UK economy itself is running at different speeds with manufacturing enjoying a boom helped by the weaker GBP while other companies are hoarding cash to prepare for a downturn that hasn’t happened yet.