UK firms' PR budgets up slightly amid stronger rise in marketing spend

UK companies have reported a marginal overall increase in the size of PR budgets in Q2 2015, although marketing budgets as a whole grew more strongly.

Marketing budgets up strongly, but PR spend more modestly, finds IPA report
Marketing budgets up strongly, but PR spend more modestly, finds IPA report

The latest IPA Bellwether Report from the Institute of Practitioners in Advertising asked marketing directors or equivalent from 300 of the UK’s top 1,000 companies about their budgets in the last quarter.

While most respondents reported no change in PR budgets, 13.07 per cent said their spend on PR increased, while 11.93 per cent said it had decreased, meaning a positive net balance of 1.1 per cent saying budgets grew.

This is the fifth time in the past six quarters that increased PR spend has been registered. Q1’s report showed more firms saying they would decrease their PR budget than saying they would increase it, resulting in a negative balance of 1.8 per cent. The final report for 2014 reported a two-year record high in growth in PR spend.

This compares with a much larger net balance of 12.2 per cent across budgets for marketing as a whole.

The Q2 survey is the tenth consecutive report showing an overall increase in marketing budgets. The sectors of marketing with the biggest budget increases were events (with a net balance of 7.4 per cent of respondents reporting increased spending), internet (6.8 per cent) and sales promotions (six per cent).

Paul Smith, senior economist at data and analysis firm Markit, and author of the report, said while the survey’s headline figures were positive, it was harder to read the underlying drivers of growth.

He said: "On the one hand, companies are showing an increasing willingness to engage in corporate hospitality, conferences and sponsorship. But belying this confidence is an increased willingness to engage in discounting and promotional activities designed to support sales at a time when the economic and financial outlook for companies has become just a little more uncertain.

"Whereas we see growth holding up in 2015 overall, the latest survey supports the projection of softer expansion further out."

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