Spending on marketing is expected to continue to rise according to the Institute of Practitioners in Advertising’s Bellwether Report examining spend in Q4 last year.
With marketing budgets expected to continue to increase through 2016/17, there is optimism in the air, but this is tempered by findings that show growth in the final three months of 2015 was just 0.5%, down from 4.4% in Q3. These reflect the softening of economic growth rates in the UK.
However, the balance of more than 20% companies surveyed anticipating an increase in optimism over the previous three months, while down from a net optimism of 22.4%, is still positive.
There is a net positive balance of 24.6% expecting to increase budgets in the coming two years.
Paul Bainsfair, director general of the IPA, says: “While these latest findings reveal inevitable easing due to macroeconomic concerns, there are some positives.
Marketers have signalled a marked increase in their budget plans for 2016, both the Olympics and Euros are on the horizon and Bellwether has produced annual ad spend growth of 3.9%. Not a bad start to the year.”
The spectre of a rise in interest rates, the uncertainty around a European referendum and general economic turmoil have acted to deaden consumer demand, leading to fears that spending will be drawn in.
The emphasis will remain on value for money rather than profligacy in where the money is headed. For direct mail’s supporters this will mean renewed focus on demonstrating the effectiveness of the channel compared to what are considered “the softer engagement metrics” that have been applied to email.
Spending on digital marketing continues to increase while investment in sales promotions and market research fell as did direct marketing, running counter to the Advertising Association/Warc report where the last edition predicted a rise of 4.5% in direct mail volumes, something that anecdotal from around the industry supports.
The IPA Bellwether Report paints a mixed picture. On the one hand marketing budgets have grown, on the other the rate of growth has slowed. Looking forwards more professional marketers anticipate an increase in budgets that expect shrinkage.
