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IPA Bellwether survey shows advertisers still spending

The UK’s marketers are sticking to their spending plans for 2022 – or say they are – despite a rapidly deteriorating economic outlook.

According to the IPA’s latest Bellwether survey 24.2% raised their marketing budgets in the Q2 2022 against 13.4% who reduced, leaving a net positive balance of 10.8%. This despite 40.3% being pessimistic about economic prospects.

The IPA has cut its 2022 adspend forecast to 1.6% (from 3.5% previously), while the forecast for 2023 has been cut from from 1.8% to 0.8%. For 2024, 2025 and 2026 adspend is forecast at 1.4% (from 1.7%), 2.0% (from 2.2%) and 2.3% (from 2.4%) respectively.

IPA director general Paul Bainsfair issued his regular plea for advertisers to keep investing: “All the IPA’s analysis on who does best in a downturn shows that the companies that recover fastest are the ones that either maintain or increase their marketing spend during difficult economic times. Equally, cutting ad budgets – relative to competitors’ spend – in a recession undermines companies’ ability to grow future market share and profits.”

If Bainsfair’s wish is granted it will be the first time in living memory that a recession, or pretty close to it, hasn’t hammered adspend. Big quoted companies report quarterly and it would take a brave CEO or CFO to tell shareholders they’re prepared to take a hit to profits so they can keep investing in marketing – even if there’s much evidence that this can actually pay off.

It’s not a route open to everyone of course and traditional main media – TV, print, radio and, possibly, Out of Home (which has a big digital element) – will be affected. Digital as a whole already seems to be plateauing at around 55-60% of adspend.

With energy bills set to soar further in the autumn and supply chain problems getting worse if anything (some big supermarkets have more gaps on the shelves than they did during Covid) advertisers’ relative optimism is looking fragile.

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