Major media ad budgets provided the biggest boost during the third quarter of the year, and marketers reported growing optimism about their business prospects.
According to the latest IPA Bellwether report, UK marketing budgets have strengthened in more than four years, with the end of almost all severe restrictions associated with the pandemic.
A net balance of 12.8% of companies registered upward budget revisions in the third quarter of 2021, compared to 6% in the second quarter. This is the fastest growth rate for marketing spend since Q2 2017.
About one in four respondents reported higher spending (25.6%), compared to just 12.8% who noted spending cuts. The numbers also mark the first time in three years that there has been a consecutive quarterly growth in marketing spending.
Market research has seen very marginal growth, with a net balance of 0.7% of companies looking to increase their budgets. The percentage that plans to increase spending on market research has only surpassed the percentage it plans to cut four times in the past seven years, and the last time was in the second quarter of 2015 when a net balance of just 0.6% said it would increase investment.
Marketing Week found last year that market research has since shown a sharp downward trend, with the decline accelerating during Covid-19. The net balance of marketers who indicate they want to reduce spending dropped to 42.2% in the second quarter of 2020.
In the first quarter of 2021, a net balance of 17.8% of marketers is still planning austerity measures, although it fell to 9.6% in the second quarter.
Mass Media Advertising Stimulates Growth
Bellwether, which is even more segregated, reveals that conventional media advertising was the top-performing marketing category in the third quarter, with a net 8.6% of companies reporting upward budget revisions, compared to ‘1 .3% in the quarter. Second trimester.
In the mass media, the video had the biggest boost (12.6%), followed by “others online” (10.6%) and audio (6.0%). Published brands are growing again (5.2%), even with the net balance of companies that intend to increase spending from home (2.0%).
“Advertisers are making the most of the general economic recovery and taking the opportunity to invest in their brands,” added Bainsfair. “As the evidence shows, investing in long-term brand-building capabilities is critical to a brand’s long-term success.”
Looking at GDP growth, Bellwether author IHS Markit revised his 2021 and 2022 forecasts from the previous survey to 6.6% and 5.1%, respectively, with advertising spending growing: 6.6% in 2021 and 6.2% in 2022.