IPA’s Bellwether report indicates that UK marketing budgets have risen in the first quarter of 2016 but their financial confidence had plummeted due to the uncertainty over Brexit.
The survey shows that on average, companies raised their marketing budgets marginally in the first quarter, with 23.3% of respondents forecasting a higher spend over the next 12 months.
The report cited uncertainty about the referendum, plus concerns about a weaker rate of global growth, as reasons for the drop in executives’ views of prospects for their sectors.
.@IPA_Updates #Bellwether: Event marketing posts 6.3% budget increase https://t.co/bq0lUM7zQ7 #experiential pic.twitter.com/330bHBjzpz
— Event magazine (@Eventmagazine) April 14, 2016
The number of executives who were pessimistic in the first quarter compared to three months ago exceeded those who were optimistic by 6.5%, a reversal of the 7% lead held by the optimists in the previous period.
The IPA Bellwether also forecast that advertising spending would grow 3.3% in 2016, a downgrade to a forecast of 3.9% growth made in the fourth quarter.
Paul Bainsfair, Director General of the IPA advertising, marketing and communications body, said the next quarterly survey would probably present a clearer picture.
“Following the referendum in June, the summer Bellwether should hopefully provide better clarity on where we are headed,” he said in a statement.
“On balance, some growth seems the most likely outcome especially with the European football championships and Olympics set to provide a shot in the arm to budgets in the immediate months ahead.”
Latest #BellwetherReport shows marketing budgets revised marginally higher in Q1 2016. https://t.co/mSQelebsgK pic.twitter.com/0GJFVigt1Z
— The IPA (@IPA_Updates) April 14, 2016
Antti Pasila, CCO and Founder at Kiosked, the advertising automation specialists, believes that major global events, such as the Olympics and EU referendum, will bring light to the advertising industry which looks rather doom and gloom from this latest report.
Pasila said: “Despite marketers’ confidence wavering, many major events will be gathering the world’s attention in the coming months, such as the Olympics and the EU referendum, allowing brands to look ahead to rosier times. Today’s Bellwether report from the IPA illustrates that marketers are already looking to capitalise on these events and are investing in online marketing campaigns: Unsurprisingly, internet spend saw the biggest upward revision in budgets, pointing to 2016 being a watershed year for changing attitudes to online ad spend.
“For marketers, this stronger investment into digital means a greater opportunity to develop more highly targeted messages for desired audiences. By using tracked data and demographics to identify the interests of specific individuals, brands can reach the right consumer with pinpoint accuracy. Now, more than ever, it’s time for marketers to harness advertising automation to make campaigns work that extra bit more effectively.”