July 20, 2015 | Laura Baines
The latest edition of the IPA’s Bellwether report has been released revealing a 0.4% rise to 12.2% of the percentage of companies registered who have seen marketing budgets rise. However, the report paints a pretty mixed picture of underlying conditions in the UK marketing industry.
On the one hand, total marketing budgets continued to increase across key marketing categories. According to the latest data, a net balance of +12.2% of companies recorded an upward revision to their marketing budgets over this quarter compared to +11.8% for the opening quarter. However, what is interesting is that there seems to be a decline in optimism surrounding financial prospects both at company and at industry level.
The good news is that the events category outperformed all other categories in Q2 with a net balance of +7.4% of companies recording an increase in this area of spend, followed by Internet spend which registered a growth spend of +6.8%. In fact, we have now seen a seventh successive quarterly upward revision to events budgets. The area of PR and Other Services seemed to fare less well when it came to apportioning spend.
Some of the reasons cited by companies for budget increases included a greater focus on sales activities, new product development, branding, design and the internet. However, it is interesting to note that there seemed to be a strong focus in the area of planned customer events and sales-supporting activities, which can only be a good thing for the exhibition industry. One must not forget that post-election marketing confidence has also helped boost confidence and increase marketing budgets across the industry.
Looking towards Q3 it will be interesting to see how confidence will be affected by broad macro-economic and geo-political events. For instance, issues like the Greek debt crisis, financial market volatility arising from expected higher US interest rates, a possible further strengthening of sterling if UK interest rates rise and ongoing business uncertainty surrounding the position of the UK in the European Union, all help to compound financial insecurities. A little bit of volatility can see companies growing more anxious about their financial outlook which is probably why there has been a slight decline in optimism.
What does all this mean for us marketers? Although there has been a slight decline in overall financial optimism, the increase in marketing budgets means that we marketers need to make sure that we continue to deliver positive returns back to our businesses.despite the uncertainty.
What is interesting is how data has become more important to a marketer over the past five years, as it enables them to take a forensic look at their core customer channels and analyse potential strategies before spending thousands of pounds. Marketing budgets need to work harder than ever and marketers need to deliver tangible positive results back to their businesses. Once we see an uplift in outputs from this increased investment we should hopefully see confidence grow.