Advertisers cut budgets for the first time in seven years – down 0.5 per cent – according to the IPA’s Q3 Bellwether report.
Which might be deemed a result given all the to-ing and fro-ing over Brexit, due to be resolved by October 31 (although it probably won’t be.)
Nearly two-thirds of the Bellwether panel (64.1 per cent) reported no change to overall marketing budgets.
Big ticket items such as TV campaigns took a hit with low consumer confidence sited and money continued to flow to online and social media.
Bellwether author Joe Hayes of IHS Markit says: “The latest survey spells further disappointment for the UK marketing industry, which is suffering, just like the rest of the economy, as a result of spending delays, firms placing projects on hold and subdued business confidence.
“Perhaps the most discouraging sign is to see firms sitting on the fence regarding main media advertising, which is a vital form of long-term brand building, following resilient budget growth in the two previous quarters.
“Overall, as long as political and economic uncertainties remain at large, it will be surprising to see noteworthy boosts to marketing spending.”
IPA director general Paul Bainsfair says: “It’s a false economy to cut one’s ad budget when things look uncertain.”
“The evidence shows that far from being prudent, it can have a negative long-term effect on growth. Companies that hold their nerve consistently, and that invest in the 60:40 ratio of longer-term brand building to shorter-term sales activation, outperform the market.”
Bainsfair is no doubt right but the temptation to cut back in such times is pretty hard to resist. In the circumstances the overall numbers aren’t too bad.
If the next Bellwether report follows a no-deal Brexit then it really will be interesting.