PR budgets flat, ad spend rises - IPA Bellwether report

Marketing budgets have been revised to their highest level in one-and-a-half years after flatlining in the back end of last year, according to an industry sentiment benchmark.

As marketers lift overall spend, PR budgets remain flat.
As marketers lift overall spend, PR budgets remain flat.

PR budgets are forecast to remain flat as marketers look to lift spending elsewhere, particularly in online and mainstream media advertising, the latest IPA Bellwether report has found.

The quarterly survey outlines companies’ marketing spend intentions with data drawn from a panel of about 300 UK marketing professionals.

Nearly nine percentage points more marketers plan to increase marketing budgets in Q1, up from a neutral zero per cent in the final quarter of 2018. This is the highest positive net spend score since Q3 2017.

About 21.6 per cent of panel members intend to grow spend, compared to 12.8 per cent planning budget cuts.

The report indicates that PR budgets will not benefit from lifts in spend, with an equal number of marketers either increasing and decreasing budgets, or keeping them flat (see chart above).

This is still an improvement on the last report (Q4 2018), in which more marketers were planning to slash PR spend with 15 per cent revising down, compared to 11 per cent revising up – creating a net balance of -4.1 per cent.

The big winners in this report are internet advertising, which had a net positive score of 17 per cent, and mainstream media advertising, which had a net positive score of five per cent. 

IHS Markit economist and author of the Bellwether Report Joe Hayes said the return to growth may come as a surprise considering the current political and economic uncertainty.

Paul Bainsfair, IPA director general, added: "The smart marketers realise that to grow their businesses, they must invest in them, particularly in mass reach, long-term media.

"While the forecast for the year ahead remains uncertain given the seemingly endless Brexit negotiations, those that want real competitive advantage should follow the proven rule that if you increase your share of voice above your share of market, you should expect to experience growth."

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