Marketing budgets in the UK have stopped rising for the first time in six years according to the IPA’s latest quarterly Bellwether report, to nobody’s great surprise. It would be astonishing if they were rising given the uncertainty over Brexit and its economic consequences.
16 per cent of marketers reported an increase, offset by 16 per cent reporting cuts to marketing spend, leaving a net balance of zero growth. Given the UK’s current non-functioning political status this might be deemed a result.
Joe Hayes at IHS Markit, which undertook the survey, says: “Company-wide indecisiveness restricted the allocation of resources to marketers, as the wait-and-see approach to how the Brexit process will transpire appears to be the current strategy in place for many UK businesses.
“The neutral stance on marketing budgets came in tandem with a first pessimistic outlook by businesses towards their own companies’ financial prospects for the first time since 2012, suggesting that top-level belt-tightening and plans to protect margins has seen marketing executives be given less discretion. Indeed, provisional data for budgets for the coming 2019/20 financial year indicate that downbeat stance seems likely to persist.”
As ever in these circumstances agencies and some pundits say that tough times should prompt more marketing spend not less, the consistent verbal backdrop in the UK’s periods of recession.
IPA director general Paul Bainsfair says: “Marketers need to weather this turbulent period and think ahead. Now is the time to be bold, to keep up their share of voice and, if they can, increase it to grow their share of market. Businesses that rely on the strength of their brands need to follow the general 60:40 (brand building vs activation spend) rule of thumb.
“Ad investment is vital, not optional.”
As someone else, wholly unconnected with advertising, once said: “fasten your seat belts, it’s going to be a bumpy ride.”