Marketing budgets on the rise despite adspend decline

By James Delves, CIM's head of PR and external engagement

Marketers, I have good and bad news. The latest IPA Bellwether Report for Q2 2022, released last week concluded that total marketing budgets across the UK have increased, however the report predicts that the next four years is set to look uncertain, with UK ad spend set to decline as the cost-of-living crisis hits the UK economy. With around a quarter (24.2%) of British companies raising their total marketing spend during Q2 2022, whilst 13.4% reported cuts giving a net balance of +10.8%, a decrease compared to Q1, which was +14.1%.  

 Looking closer there was positive news across the marketing disciplines:

• Events is a key driving force of the total marketing activity growth, with organisations revising their budget up +22.2%, up from Q1's 18.7%.
• PR saw a net balance of +3.7% in Q2

Uncertain outlook for ad spend:

• A net balance of -9.5% of organisations showing uncertainty about their performance
• The report highlighted that advertising spending would be cut until 2026, with the following forecast outlined below:

2024 - 1.4% (from 1.7%)

2025 - 2.0% (from 2.2%)

2026 - 2.3% (from 2.4%)

The IPA Bellwether Report echoed our own Impact of Marketing research regarding the optimism of marketers for the months and years ahead, despite the deterioration of their financial prospects.

Reflecting on the report's findings, Chris Daly, CIM’s chief executive said: “Today’s IPA Bellwether report shows that marketing budgets are up once again, continuing an almost eight-year high for the sector. However, disappointingly, the projected reduction of the ad spend growth forecast over the next few years signifies an uncertain future.
 
As with other sectors, the industry is facing challenges with the cost-of-living crisis, which threatens to change the way we interact with brands. For this very reason, businesses need to put their confidence in marketers, who are best placed to create world-leading work that will engage a new age of consumer and support brands’ future growth.
 
“Whilst these results are a short term energy injection into the profession - particularly following recent calls from the Government to divert marketing budgets into reducing prices - we know that marketers need to continue to prove that, despite challenging times, we are here to stay in full force.”

To read more about the IPA Bellwether Report, please click on the below link to Research Live, which features comment from CIM:

Research Live: Marketing budgets up but research budgets drop, finds IPA