The advertising and marketing sector is waking up with a first expansion in spend during the second quarter of 2021 since the first quarter of 2019. This will mean an upward revision for adspend forecasts for the remainder of this year, according to the IPA Bellwether Report.
The report predicts that spending growth will be 7.5% for this year followed by 6.0% for 2022. Beyond that growth rates will be more moderate.
The ending of lockdown restrictions is leading to predictions of strong economic growth this year. And marketing spend is also on the upward curve. A balance of +6.0% of surveyed companies increased marketing budgets during Q2, as 21% reported growth, compared to 15% reporting a decline. And it compares to the 11.5% of firms that, in Q1, had recorded spending cuts.
The optimism is tempered by uncertainty around whether consumers will return to pre pandemic behaviours and therefore how to influence shoppers. And while most anticipate growth as a result of the success of the vaccination roll out, some sounded concern about the rise of new versions of the virus.
During Q2 spending on digital forms of advertising increased, while budgets for out of home and published brands were revised downwards. There was a slight increase in direct marketing following a fall the previous quarter. Events, not surprisingly, also declined in the first quarter.
There is widespread optimism that the conditions are improving: 21% more believing that the industry has better prospects than before and 46% saying they are more optimistic about prospects for their own businesses.
Paul Bainsfair, director general of the IPA, says: “These positive results mark the end of five quarters of continuous cuts. For revisions to UK marketing budgets to bounce back so quickly and strongly, following their nadir at the height of Covid-19 restrictions in Q2 2020, is very welcome news and corroborates our Bellwether prediction for a V shaped recovery. As the vaccination rollout continues at pace and UK plc gears itself up for growth, we encourage companies to ramp up their advertising to make the most of post lockdown, pent up consumer demand.”
