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, finds marketers increasingly optimistic about the prospects for their companies and industry sectors.
Their confidence is reflected in the number of those surveyed planning to increase their budgets for this year and next – 40 per cent – a marked increase on the 25.8 per cent that were planning an upward revision at the start of the first quarter. Just 14 per cent said they were planning to trim budgets with the resulting net balance of 26 per cent the highest return for seven years.
The picture for the year ahead was mirrored by the number of respondents reporting higher than expected spend in the first three months of 2014. Almost a third (30 per cent) spent more than planned in the first quarter compared to 9 per cent spending less than budgeted. The net balance of 21 per cent was the highest total registered in the report’s 14-year history and a steep uplift on the 11 per cent return at the beginning of the year.
Bellwether also suggested that the additional money spent in the first quarter was spent on traditional media channels. The net balance of those increasing their spend on “main media” – television, radio, outdoor and print – increased to 11.7 per cent compared to online media’s 8.5 per cent, the first time main media had beaten digital into second place in almost three years. The balance of companies increasing spend on channels such as display, social and search, seen as low cost but more efficient in straitened times, was also down on the 9.2 per cent reported for the fourth quarter.
The willingness to spend more on marketing follows recent upward revisions for UK economic growth – fiscal watchdog The Office for Budget Responsibility recently raised its projection to 2.7 per cent from 2.4 per cent.
The news also comes as the Office of National Statistics reports weekly wage increases are now matching inflation, indicating that the squeeze on consumer spending is easing. Weekly wages rose by 1.7 per cent to the end of February, says the ONS, matching the 1.7 per cent increase in the rate of inflation in February.
Chris Williamson, chief economist at economic analyst Markit and author of the Bellwether report says: “The spring Bellwether Report reveals the most upbeat assessment of business and marketing spend that we have seen since starting the survey back in 2000. Last year saw the biggest rise in marketing spend since 2006, and 2014 looks set to be even better.
“If the initial increase in budgets for the year being the strongest since 2006 wasn’t already enough, the fact that companies have already revised these budgets higher to an extent not seen in the 14-year history paints a remarkably buoyant picture for the rest of 2014.
“Companies are ramping up their markets and advertising expenditure in the face of growing optimism about the economic outlook. As higher marketing spend is also usually accompanied by rising business investment.”