Marketing budgets are up by 4%, if the IPA’s Bellwether Report is to be believed, as marketers relax their purse strings in response to the decisive result of December’s general election. Significantly, the quarterly dispatch records a rare increase for “main media” budgets, albeit by a modest 0.5%.
Otherwise most of the growth comes, as always, from digital, which is up 7.9%. There is a lot of talk at the moment about the need to put aside the obsession with programmatic toys and get back to creativity that engages consumers rather than hunts them down; it would be heartening to see more advertisers put their money where their mouth is by actively investing in big branding campaigns.
Paul Bainsfair, director general of the IPA, said: “This latest report demonstrates the extent to which UK marketing budget planning has been at the mercy of the unstable political environment. Over the past year we have seen a stagnation in marketing budgets, culminating in a below zero score last quarter. And yet now, with the clear result of the election, we are seeing a return to positivity in terms of UK companies’ confidence regarding their own financial prospects and in terms of their budgeting plans – up marginally this quarter and significantly for 2020/21. With Brexit still looming, I’m sure it won’t be plain sailing, but these forecasts provide an upbeat outlook for the year ahead for UK plc, their marketers and of course the agencies that work with them to grow their businesses.”
Joe Hayes, economist at IHS Markit and author of the Bellwether Report, said: “There were a number of positives to take from the fourth quarter. It appears that firms are looking to release the pent-up investment which has been put on hold amid the high degree of political and economic uncertainty which has plagued the UK business climate for well over 12 months now. Nevertheless, downside risks remain at large, particularly if a business cycle recovery does not fully materialise and Brexit uncertainty descends again.”
Panellists, made up of major marketers, were at their most optimistic since Q3 2018 about the financial prospects of their own companies.