Report uncovers uncertainty in marketing thinking

The marketing business was hesitating about the second half of the year, even before the result of the referendum was known. There is a need to retain confidence while another report stresses the value of advertising in newspapers.

Advertising spend increased in the second quarter of the year, but the outlook for marketing budgets for the rest of the year is decidedly mixed.

Consequently the IPA Bellwether Report has downgraded its forecasts for the rest of this year and into 2017. Most of the research was carried out before the result of the referendum was known, even so it uncovered uncertainty among marketers. This was seen in relation to overall industry performance rather than prospects for the budgets they control.

This comes despite the results of the second quarter when there were 10.7% of companies increasing budgets more than those cutting spend. This was up on the 3.0% positive balance from Q1 and ahead of expectations. Nevertheless 68% of marketers report that budgets in Q2 had been frozen, as companies braced themselves for the Brexit result.

This has led the Bellwether prediction for 2016 marketing spend to be a decline of 0.2%, followed in 2017 by a drop of 1.3%.

The results for Q2 reported an increase in spending on events, on the internet, while even the mainstream media reported a 9.3% increase. However there was reduced spending on sales promotion, market research and a 0.5% fall in direct marketing spend.

IPA director general Paul Bainsfair comments: “Before companies react and cut marketing spend, however, it is worth remembering that all the evidence points to the opposite. Companies that keep investing during a downturn perform better financially than those that reduce marketing expenditure.

“We may be in uncertain times but we can be sure of the ways in which marketing can transform brands and boost company profits. It is therefore more imperative than ever that both agencies and clients continue to trust in the value of their ideas, skills and inventiveness.”

The report was published last week almost simultaneously with a conference to reveal the findings of a tripartite report on the effectiveness of advertising in print, specifically advertising in newspapers. This comprised a meta study conducted by Benchmarketing into the role that newspapers can play, from examination of the IPA Effectiveness Awards and from Brand Health, looking to advise how brands should manage their spend.

Unsurprisingly the overall message was that print advertising is more effective than prevailing wisdom suggests.

The Benchmarketing study looked across a range of different reports to uncover common themes and findings. It is the first to employ the meta study approach, common in the pharmaceutical sector.

“Benchmarketing has proved that news brands continue to play a very important party of the modern media mix.

“Advertising spend should return to 2013 levels for optimum effectiveness.”

That effectiveness will vary according to different sectors and is dependent on print advertising working in partnership with digital and television advertising.

In the automative sector for example, Brand Health recommends that print should take 10% of an overall marketing spend. The Brand Health report concludes: “Print is the most effective single news brand platform for brand building.