Marketing budget growth rebounds from two-year low in UK
With around 30 percent of surveyed marketing executives reporting upward revisions, compared to just 8 percent noting a contraction, the net balance of companies reporting upward revisions to their internet marketing budgets stood at +22.7 percent.
This matches Q2 2017’s nine-and-a-half year peak, and is up significantly on Q1’s net balance of +8.7 percent. Companies also signalled plans to increase spend on search, with the net balance rising from +5.6 percent in Q1 to +11.0 percent in Q2.
On the mobile advertising front, survey data indicated the first downward revision since the third quarter of 2016. Just under 8 percent of marketing executives pointed to higher mobile advertising spend, compared to nearly 9 percent signalling a decline, yielding a net balance of -0.7 percent. This was compared to a neutral +0 percent reading in Q1.
23 percent of panellists indicated higher spending plans for overall marketing activity during Q2 2018, while just less than 17 percent pointed to lower budgets, yielding a net balance of +6.5 percent. While this is an increase on the +5.0 percent seen in Q1, it remains the second lowest since Q1 2016.
Marketers are more bullish about main media advertising, including TV, cinema and radio campaigns, with a net balance of +4.9 percent, bouncing back from a negative net balance in Q1. Budgets were revised upwards for both events (4.3 percent) and sales promotion (+4.0 percent).
Categories experiencing downward revisions include email and telemarketing, no doubt impacted by the advent of GDPR changes. Direct marketing as a whole posted a net balance of -3.2 percent, marking three years of cuts to direct marketing budgets. Other categories suffering downward budget revisions during Q2 included market research (-7.2 percent) and PR (- 6.5 percent).
Looking at overall ad spend, following a slight upward revision to the official Q1 GDP quarterly growth figure, expectations are for a bounce back in Q2. As such, the Bellwether Report predicts a greater degree of optimism towards ad spend growth for 2018 and 2019 than it previously forecast.
Growth for the year as a whole is expected to come in at around 1.1 percent (revised from 0.8 percent), while 2019 growth was also upwardly revised to 0.7 percent (from 0.4 percent).
Businesses maintained a positive outlook towards their own finances during Q2, with a net balance of +13.3 percent of firms that were optimistic, fractionally higher than in the first quarter (+13.1 percent) and the greatest level of optimism since Q1 2017.
Confidence towards wider industry financial prospects was lacking however, amid a recent softening in UK economic growth and the ongoing impasse in Brexit negotiations, with a net balance of - 9 percent, albeit up from -13.6 percent in the last quarter. ■