Direct and digital marketing budgets are growing at their fastest rate for more than six years, and now account for nearly 37% of all marketing spend, according to the latest IPA Bellwether report for Q2.
The positive showing will bolster hopes that the sustained period of marketing cuts that have been evident since the beginning of the financial crisis will come to an end this year. A net balance of +13.5% of companies have pencilled in an increase in marketing budgets during 2013 as a whole, the most positive forecast for two years.
Detailed data has shown that 0nce again digital is the key driver to overall budget growth (revised up 17.4%, compared with +8.9% in the Q1 study). Direct marketing budgets were also increased, by a rather less impressive 0.6%, although far better than Q1 which saw DM spend slashed.
The survey is in line with a number of wider business reports, signalling that GDP growth is strengthening in Q2, with the economy set to expand at a quarterly rate of 0.5%.
Rik Haslam, IPA Direct Marketing Group chairman and chief creative officer at Rapp, said: “Time will tell if we’re finally entering a period of sustained growth, it certainly feels that way for direct and digital agencies. Together those sectors are growing at a faster rate than at any time over the last six years.”
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The latest Bellwether Report is one of the most optimistic in recent memory and highlights the cautious confidence that the economic climate is improving.
It reflects that client confidence has grown and we are seeing them invest in intelligent and long-term marketing solutions, such as marketing automation tools. We should see the improved results continue for the remainder of 2013 as marketing becomes more strategic and insight-led with a focus on building long-term relationships with their customers.
The internet remained a key part of the growth witnessed in Q2. The increase in usage and ownership of connected devices and the upcoming launch of 4G means that this is a trend which is likely to continue. This confirms what was identified at the start of the year – the traditional agency model is changing, and those that will succeed in our industry will be the agencies that can offer clients an integrated proposition that includes activity on all relevant channels, delivered in a seamless way.
No longer can agencies work on single offerings and as marketing teams decrease in size, clients are relying more than ever on agencies as marketing and business partners. We are increasingly expected to offer propositions and solutions over a number of growing channels all at once.
It goes without saying that this will have an impact on the skill set needed within an agency, but we’re also seeing new structures developing to accommodate the rapid change in demand for the styles of services offered. The challenge in the coming year lies in maintaining the highest level of service while guiding clients through this.
Chris Sykes, CEO – Volume
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