Marketing budget spend picks up as optimism grows, according to latest Bellwether report

Marketing spend grew at an accelerated pace in the first quarter of 2015 according to the latest IPA Bellwether Report, published today (15 April), as marketing executives grow more optimistic about financial prospects despite the uncertain political climate.

Marketing budgets grew by 11.8% in the first three months of 2015, up from 6.1% in the final quarter of 2014, the tenth successive quarter of growth. However, budgets are still growing at a slower pace than early 2014, down from 12.6% in Q3.

More than a third (37.8%) of companies have also grown more optimistic compared to 30.7% in Q4, though this number is still down from 38.6% in 2014, suggesting that political uncertainty is still breeding less economic confidence.

The last Bellwether report, released in January, showed that while marketing budgets had increased for nine successive quarters with average growth rates reaching record levels, they were still growing at a slower rate.

Internet, events and direct marketing see highest growth rates

The largest growth in the quarter was seen in Internet, particularly search and SEO. Internet spend was up by 8.4%, marking its 23rd successive quarter of growth. However, the rate had slowed to the lowest pace in over two years, down from 15.1% in Q4, with search down from 15.7%.

Events and direct marketing also saw growth of 5.7% and 5.5% respectively, the best growth of DM since the third quarter of 2010, while main media (TV, cinema and press) ad budgets were up for a fifth consecutive quarter (2.9%) but down from the final quarter of 2014 (6.7%).

Sales promotions also recorded growth, while PR, market research and other marketing recorded drops in spend.

Growth to extend into 2015 as marketers’ confidence improves

The report predicts a 4.2% rise in UK ad spend for 2015 with 28% of survey respondents forecasting an increase in their budgets relative to the 2014/15 financial year, adjusted down slightly from 30% last quarter.

Events and main media are set to benefit most as companies cite plans to maintain spending in TV, cinema and press campaigns as well as online marketing.

While ad spend is due to cool to 3.6% in 2016, marketers are increasingly optimistic about the financial prospects of their companies and the industry in general, despite the uncertain outcome of the upcoming election in May.

“While many commentators await to see what form Britain’s post-election economic landscape takes, marketing executives seems to be shrugging off any uncertainty,” said Paul Smith, senior economist at Markit and author of the Bellwether Report.

“Indeed, latest data shows companies planning to bolster their marketing budgets for the forthcoming accounting period to the greatest degree in eight years.”

2014/15 was the best budget year for marketing spend in a decade, according to the report, with 21.8% of companies indicating their budgets rose over the year.

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3703 or email customerservices@marketingweek.com

If you are looking for our Jobs site, please click here