United Kingdom

IPA Bellwether Report Shows Muted Ad Spend Ahead of GDPR: The Industry Reacts

By April 24, 2018 No Comments
Report highlights

– Internet continues to perform best, but main media slips into contraction

– Ad spend set to rise by just 0.8% in 2018

– Muted ad spend growth predicted for 2018 and 2019

In line with the trend seen since the end of 2012, UK marketing budgets were increased further during the first quarter of 2018 as marketing executives helped launch new products, bolstered events marketing, and continued to enhance the role of digital platforms within their marketing strategies. This is according to the IPA’s Q1 2018 Bellwether Report released 18 April 2018.

However, latest data revealed that growth momentum was lost amid reports of challenging market conditions and financial pressures squeezing budgets. Underlying sales were reported in some instances to be a little softer, whilst investment funds were being directed away from marketing to other business areas.

The Q1 survey indicated that 22.9% of companies benefited from an increase in their marketing budgets during the latest survey period, compared to 17.9% of companies that recorded a fall. The resulting net balance of +5.0%, down from +8.6% in the previous quarter, was the lowest recorded by the survey for two years.

Encouraged by positive returns from previous digital marketing campaigns, panellists continued to step-up their adoption of internet advertising during the latest quarter. The Q1 survey results indicated that internet marketing spend was raised for a 35th successive quarter at the start of 2018, albeit at a slower rate.

Whilst once again the strongest of all Bellwether categories, the net balance of +8.7% was the lowest recorded by the survey since the end of 2015. Within this category, search/SEO expenditure also grew at a slower rate, with the net balance falling to +5.6% from +12.4% in Q4 2017. Meanwhile, there was a stagnation in mobile advertising observed, with an equal proportion of marketers revising their budgets up to those indicating a fall, resulting in a net balance of +0.0%, from +6.0% in Q4 2017. Spending in mobile failed to rise for the first time in a year and a half (+0.0%, from +6.0%).

The future is secure

Despite the findings shown in the report, Jodie Stranger, CEO UK group and president global clients EMEA, Starcom feels that there is cause for hope: “2017 was a year of uncertainty. The first quarter of 2018 has shown this uncertainty has spilt over into this year – with continued concerns about the actual outcome of Brexit negotiations and the implementation of GDPR next month. However, looking forward, it’s encouraging to see anticipated growth across the majority of marketing categories. Especially in main media advertising, with an expected growth of +7.7% in the coming financial year.”

View more report highlights in ExchangeWire, here.