Marketing budgets cut for the first time in seven years, says Bellwether Report

Total marketing budgets fell in the third-quarter amid economic and political uncertainty, but outlook for 2020 is positive.

UK marketers are recording a slight reduction in spending in the third quarter, amid economic and political uncertainty, according to the Q3 IPA Bellwether Report, published today. 

Events marketing budgets went down for the first time since the third-quarter of 2018 (-5.9% from +4.8% in the previous quarter).

In total, the third-quarter saw 18.2% of UK marketers reported cuts to total advertising spend, with nearly two-thirds reporting no change, and 17.7% reporting budget growth – a net balance of 0.5% registering cuts to their total marketing budgets.

There were also reports of UK businesses adopting a ‘wait-and-see’ approach due to Brexit-related uncertainty and low consumer confidence. 

Growth in digital marketing

However, as many marketers re-allocated budgets to online and social media-based campaigns, internet marketing remained the top performer in the third quarter, with 11.1% of firms reporting budget growth here. 

Market research and mobile advertising both took a hit in the second quarter, while main media advertising budgets remained unchanged following growth in the first two quarters of the year, signalling that businesses are reluctant to commit to big marketing campaigns.

Paul Bainsfair, director general at IPA commented: "It’s a false economy to cut one’s ad budget when things look uncertain. The evidence shows that far from being prudent, it can have a negative long-term effect on growth."

Positive outlook for 2020               

Overall, little has changed since the second quarter, and The Bellwether Report only anticipates a 1.1% annual increase in adspend for the whole of 2019, with Brexit uncertainty and a weak economic backdrop being the main factors. 

However, Bellwether is confident that businesses will accelerate marketing efforts once uncertainty has cleared, with predicted growth of 1.8% in 2020, followed by 2.0% in 2021, 2.2% in 2022 and 3.1% in 2023.

Joe Hayes, economist at IHS Markit and author of the Bellwether Report warned: "As long as political and economic uncertainties remain at large, it will be surprising to see noteworthy boosts to marketing spending."

For more features and breaking news sign up to C&IT Magazine's daily Newstracker.

Have you registered with us yet?

Register now to enjoy more articles
and free email bulletins.

Register now
Already registered?
Sign in

'Attention to detail is key'

'Attention to detail is key'

A-List 2020: Stephanie Aviss is an account manager at Top Banana

What does the future hold for incentive travel?

What does the future hold for incentive travel?

C&IT speaks to Black Tomato's David Heron to find out why he's feeling cautiously optimistic.

5 ways the industry can recover from the crisis

5 ways the industry can recover from the crisis

Catch up on our Crisis Briefing webinar, where experts from across the global MICE industry share their latest COVID-19 recovery plans.

LIVE UPDATES: Peru ends 106-day lockdown

LIVE UPDATES: Peru ends 106-day lockdown

Find out which countries are on partial or national lockdown, what travel restrictions are in place and what size gatherings are allowed.

Case study: Android's Partner Summit in Berlin

Case study: Android's Partner Summit in Berlin

Agency Wonder brought the tech giant's new branding to life in a former techno club in the German capital.

Events industry urges UK government to set reopening date

Events industry urges UK government to set reopening date

Senior industry figures argue that the lack of confirmed date risks losing major business to international competitors.

'It's great to be involved in the planning but onsite is where you really learn'

'It's great to be involved in the planning but onsite is where you really learn'

A-List 2020: Sarah Potts is an events project manager at BI Worldwide.

Dreaming down under: the Australia incentive

While global travel is on hold, it’s a time to dream. One Australian expert discusses her ultimate incentive itinerary for first-time visitors, including flying celebrated chefs around the country and dinner under the outback stars…

5 ways to make a powerful connection with your audience

5 ways to make a powerful connection with your audience

Engagement is all about creating a strong emotional response in a person, says Clive's Olly Adams.

Diversity Ally launches consultancy service for the events industry

Diversity Ally launches consultancy service for the events industry

The new consultancy and membership organisation will help MICE businesses become more diverse and inclusive.