Marketing budgets are increasing faster than expected and despite the background of uncertain economic conditions. These reached their second highest level for two years according to the IPA’s Bellwether Report for Q2.
Almost a quarter of respondents (23.8%) reported an increase to their marketing budgets with just 16.9% reported cuts. The overall figure masks trends within the marketing budgets. Thus one of the biggest drops was in online spend, though this was surpassed by published brands which continued a downward trend.
Spend on direct marketing continues to increase, although not at the same rate as in the first three months of the year. PR and main media also showed net positive balances.
And where audio spend remained static, spend on video increased. Spend on out of home advertising fell but at 2.5% more identifying a decline rather than growth, was much better than in Q1 when the net balance was -11.3%.
Other areas experiencing shrinking budgets included market research. In contrast the fastest growth went to events of 11.0%, increasing from 14.7%.
However, when asked about prospects for their own businesses, respondents were less optimistic. One third reckon on a decline in the next period, 10% more than those that anticipate an increase. Thinking about the wider industry, respondents were even less hopeful: 36.5% expected a deterioration in conditions set agains the 11.4% expecting improvement. Forecasts of a 2.6% increase in advertising spend for 2026 remain unchanged.
IPA director general Paul Bainsfair says: “The overriding message from this quarter’s report is that UK companies continue to recognise the value of advertising. Encouragingly, we also see signs that businesses understand the importance of investing in long term brand building. Within the main media category, investment in video advertising has been revised up to its highest level in almost two years, while spending on other online activity – a shorter term activation medium – has been cut for the first time in seven quarters.
“In light of such challenges, it is therefore more important than ever that companies play the long game and continue to invest in brand building media that is proven to be better placed to drive sustainable business growth.”
Another of the commentators also identified a shift towards more strategic, longer term thinking and spending while Mark Howley, chair of the IPA Media Futures Group and COO of Publicis Media adds: “Hopefully, a strong England World Cup performance will provide a better than anticipated Q3 trading environment, so actual growth may even be higher than this forecast.”
