Marketing spend given ‘kiss of life’ as growth returns

DM disciplines 3Marketing budgets appear to have come out of the doldrums – in the short term at least – with the latest IPA Bellwether report showing a return to growth in Q1, even though confidence in the market remains as fragile as an imperial Ming vase.
After overall budgets flatlined in Q4 2018, surprise, surprise, Internet spend has returned to lead the way, with the net balance jumping from 2.1% in the fourth quarter of 2018 to 17.2% in the first quarter of 2019. This was driven by search and SEO spending (14.2% compared with -3.9%) and mobile adspend (3.6% against -2.4%).
Budgets for mainstream media campaigns also received a boost (up 5.2% compared with -6.2%), although, despite a slight improvement, direct marketing budgets continue to struggle, down 3.5% (from -5.6%). However, the report’s definition of direct marketing is very narrow and does not include areas such as data and insight, which, by all accounts, are growing rapidly.
Marketing executives erred on the side of caution with their forecasts for marketing spend for the 2019/20 financial year. A modest net balance of +3.4% anticipate budgets to grow during this period, which was notably weaker than past forecasts made before a new financial year and the lowest since 2009.
Although approximately 26% of panellists foresee growth, the remaining 74% expect cuts or no change. Compared to this time last year, a net balance of +18% of firms anticipated budget growth for the 2018/19 period.
IPA director general Paul Bainsfair said: “This sharp increase following Q4 2018’s flatlining signals that UK marketing budgets have received a much-needed kiss of life in an economy gripped by Brexit uncertainty. The smart marketers realise that to grow their businesses, they must invest in them, particularly in mass reach, long-term media. While the forecast for the year ahead remains uncertain given the seemingly endless Brexit negotiations, those that want real competitive advantage should follow the proven rule that if you increase your share of voice above your share of market, you should expect to experience growth.”
Jaywing chief executive Rob Shaw added: “It’s heartening to see some improvement though tempered still with considerable caution. The observed short term increase in spend but with continued delays to marketing spend overall very much echoes our own experiences. For those investing, we’re also seeing spend on brand building, new approaches, such as in new AI and machine learning driven digital techniques, and more immediately and directly measurable areas such as paid media campaigns across PPC and social.
This kind of blended approach to brand, measurable media and future-proofing approaches is eminently sensible though all must work in harmony if marketers are to squeeze best value out of every penny of budget. So they must ensure, especially where money is tight, that they are quick to understand what is and isn’t driving value and over what period they should expect value to be delivered.
“There is no silver bullet for consumers, marketers or agencies when faced with a lack of clarity over our economic future with Europe, but it seems that more switched on marketers are directing their budgets and energies in the right direction and thankfully not at the expense of brand.”

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