Latest Bellwether data, released yesterday by IPA, show that there is a stalling of growth of the available marketing budgets. IPA says that prior hopes of a sustained revival were extinguished in the second quarter of 2019 as firms reported no change to available marketing budget expenditure amid growing political and economic uncertainty.
IPA, the trade body and professional institute for agencies in the UK’s advertising, media and marketing communications industry, estimates 1.1% annual increase in ad spend over the year as a whole.
34% of marketing executives reported a pessimistic outlook towards finances in their industry, compared to approximately 8% that was optimistic, the resulting net balance (-25.6%) signaled the second-most negative assessment since the fourth quarter of 2011 (surpassed only by the Q4 2018 reading of -28.6%).
According to IPA, growing economic uncertainty continued ambiguity over Brexit and additional risk through a change of political leadership in the UK were mentioned by firms as factors expected to challenge the business environment over the coming year. Panel members also raised concerns that difficult conditions domestically were damaging consumer confidence and impacting consumption. Businesses were also wary of headwinds from external sources, particularly spillover effects into UK markets from global trade disputes and weaker growth at key export destinations such as Europe and Asia.
“Between Boris, Jeremy and Brexit, coupled with a dip in consumer confidence, it is perhaps no wonder that this quarter’s Bellwether shows zero growth to overall UK marketing budgets. Until a clearer political and economic path is outlined, the vast majority of companies are locked in stasis. It is reassuring to see, however, that some companies are revising up their investment in main media advertising; this is where they will build the longer term growth of their brands, which is crucial to weathering these tougher times,” said Paul Bainsfair, IPA Director General.