The UK’s adspend recovery stuttered in Q4 2021 as the Omicron Covid variant sent the country (the medical establishment anyway) into a panic, according to the IPA agency trade body’s latest Bellwether Report.
A net balance of +6.1% of companies upwardly revised their total marketing budgets at the end of last year as recovery from the pandemic continued. But the emergence of the Omicron strain, heavy supply-chain disruption and strong inflationary pressures slowed total marketing budget growth from the third quarter of 2021 (net balance of +12.8%).
The latest data was still the second-strongest improvement since the opening quarter of 2019.
By sector, market research (net balance of +7.0%) was the top performing category, enjoying its strongest performance since it was first tracked by Bellwether over nine years ago. Direct marketing registered the next strongest expansion with a net balance of +3.8%, followed by main media advertising (+3.1%).
Within main media, there was growth in video (+7.3%) and other online advertising (+4.5%), but budget cuts in published brands (-5.9%), audio (-6.3%) and out of home (-8.3%). Public relations was up slightly (+2.0%), while sales promotion was level. Events (-3.9%) and other (-11.2%) marketing budgets registered cuts.
Looking forward, a net balance of +34.5% of surveyed companies plan to expand their total marketing spend in 2022/23. Close to half (45.7%) of Bellwether panellists expect budget growth, with 11.2% expecting spending
IPA director general Paul Bainsfair says: “It is very welcome news that UK marketing budgets continue to be revised upwards. As we can see, however, Omicron has heightened uncertainty, altered consumer behaviour and subsequently impacted UK companies’ marketing budget decision making. Going forward, new variants – alongside supply chain issues and heightened inflation – may indeed induce further wobbles.
“The key for businesses to weather these fluctuations will be, where possible, to invest in the longer-term and in brand-building media. As the evidence proves, brands that continue to invest in their marketing throughout the toughest of times come out on top.”