Total UK marketing budgets were revised up to an almost eight-year high during the opening quarter of 2022, according to latest IPA Bellwether Report.
Total marketing budgets were upwardly revised by nearly one-quarter of Bellwether panellists (24.1%). !0% of companies recorded budget cuts, yielding a net balance of +14.1% in Q1 2022 (+6.1% in Q4 2021). This was the highest since Q2 2014 and marked a fourth successive quarter of growth.
Growth by category in Q1 2022
Top-performing segment in Q1 during the first quarter was events, with a net balance of +18.7% (from -3.9%). Budget expansion was also seen in main media (+9.4%, from +3.1%), with online (+18.6%), video (+9.0%) and published brands (+1.3%) also up. Out of Home and audio continued to declined.(-4.6% and -8.5% respectively.)
Sales promotions (+8.0%, from 0.0%) and direct marketing expanded (+6.0%, from +3.8%). PR grew marginally (+0.6%.) Market research fell sharply (-3.5%, from +7.0%.)
Budget plans 2022/23
43.8% of Bellwether respondents expect growth in marketing spend over 2022 with 10.6% expecting cuts – a net balance of +33.1%.
On the industry as a whole, survey respondents were more pessimistic than they were three months ago, with a net balance of -3.6% of companies downbeat in the first quarter of the year. This was broadly unchanged from the fourth quarter of 2021 (net balance of -3.8%) and therefore the second-greatest degree of pessimism for over a year. The 27.4% of companies that were negative more offset the 23.9% that were upbeat.
The reasons aren’t hard too find: the cost of living crisis fuelled by energy costs, supply chain problems and the war in Ukraine.
IPA Director General Paul Bainsfair says:: “With Covid-19 restrictions ending, it is clear that UK companies are keen to capitalise on this moment and ramp up their marketing spend. This is welcome news now, but we know we face soaring inflation levels, cost of living increases, supply-chain issues, all exacerbated by the war in Ukraine and some sector recruitment shortages.
“With forty years of downturn data to learn from, the IPA knows beyond doubt that brands do best when they maintain their investment in longer-term brand-building media, complemented by a smaller ratio of sales activation media. This is the survival code for surviving a downturn.”
