Bellwether: promo marketing spend still rising
According to the latest IPA Bellwether Report, published this week, marketing budgets have moved ahead strongly, marking the fifth quarter of consecutive growth.
The Bellwether report covering the fourth quarter of 2013 revealed a net balance of +11% of companies registering an increase in budgets, down slightly on the series’ record of +12.3% in Q3 but still the second-highest rate of growth since the quarterly survey was launched in Q1 2000.
Analysed by marketing channel, the index for sales promotion was +1.9%, second only to the Internet on +9.2%.
Events registered +1.8% and Direct Marketing +1.2%. Main Media advertising was static at +0.0%, while Other was on -2.3%, Market Research on -2.5% and PR on -2.8%.
The IPM welcomed the findings, but stressed that the Bellwether is not always an accurate measure of spend on promotional marketing in general, because of its focus on measured media channels.
For the IPM, ‘sales promotion’ represents a relatively small part of what its members do, and promotional messages can now be found in almost all marketing communications.
The Bellwether report asks marketers to indicate whether budgets have increased or decreased across a range of different media channels, and subtracts the percentage of those who say budgets went down from the percentage who say budgets went up, to come up with an index.
Companies also remained highly confident about their own financial prospects, with the net balance of firms that have become more optimistic measuring +47.0%. This is only slightly lower than the series record high registered in Q3 2013 at +49.2%.
Companies are also buoyant about industry financial prospects in the coming months, with the net balance unmoved at a series-record high of +35.4% in Q4 2014.
This optimism looks set to continue into 2014 with provisional data for 2014 financial year budget plans revealing that a net balance of +25.8% companies are expecting to see growth, the most positive reading since 2008.
Additionally, the Bellwether’s predictive model, which is based on the Office for Budget Responsibility’s prediction for economic growth of 2.4%, forecasts a resultant 3.3% increase in adspend in 2014.
In the longer-term, however, the predictive model anticipates a slowing in GDP and consumer spending growth in 2015 which will be offset by an upturn in investment, leaving adspend growth unchanged at 3.3%.
A stronger economic recovery going forwards will then deliver a more substantial increase in adspend to over 4.0% in 2016, 2017 and 2018.