Marketing budgets grow at record rate as confidence returns
The UK’s biggest brands increased their marketing budgets by the largest margin for 13 years in the third quarter as news the economy is improving made marketers more confident about the prospects for their companies and industries.
The latest Bellwether report, a quarterly survey of 300 senior marketers from the UK’s top companies and a respected barometer of confidence in the industry, found a net balance of 12.3 per cent revised their budgets up in the three months to 30 September, up from the 7.3 per cent registered in the previous quarter and the steepest quarter on quarter revision since the survey began in 2000.
Budget increases come as marketers continue to report growing confidence in the financial wellbeing of their own companies and their sectors. The net balance of those becoming more optimistic reached an eight-year high of 49.2 per cent up from 27.6 per cent in the previous quarter.
Elsewhere, the net balance of respondents reporting increased confidence in the prospects for their industries grew to 35.4 per cent up sharply from 6.1 per cent registered for the second quarter.
Chris Williamson, chief economist at Markit and author of the Bellwether report, says news the economy is growing, house prices are rising and unemployment is falling have combined to convince marketers to increase spend.
“The increased appetite to spend on advertising and marketing is being fuelled by a surge in business optimism, with firms seeing their financial prospects to be the brightest for at least eight years.
“These survey findings are not only great news for the marketing industry but also for the UK’s broader economic recovery. The fact that business are starting to spend in earnest again suggests we may finally see a long awaited upturn in investment spending, which will help take the UK’s recovery onto a more sustainable footing,” he adds.
The report did strike a note of caution, however, recognising that although marketing spend is on the up not all promotional channels saw growth. Investment in digital was up 11.7 per cent, while spending by 4G providers and the battle between BSkyB and BT Sport helped lift traditional media such as TV, press and outdoor by 3.4 per cent. Additional investment in some areas, however, appears to have been borrowed from direct marketing, market research and PR down 3.4 per cent, 3 per cent, and 1.7 per cent respectively in the period.
The report adds: “There remains some evidence of companies taking a cost cautious and prudent approach to spend, with a number of respondents choosing to boost budgets in some areas, but offsetting to a degree with cuts elsewhere.”
