Six years of growth in UK marketing budgets came to an end in the fourth quarter of 2018 as economic and political uncertainty caused marketers to “lose confidence” and pull back spend.
According to the IPA’s quarterly Bellwether report, there were no changes in marketing budgets in Q4, with 16.4% of marketers reporting they plan to increase spend and 16.4% that they plan to cut it, leading to a net balance of 0%. The last time the report showed marketing budgets were not in growth was in Q3 2012.
The result brings to an end a six-year bull run of growth. And while budgets are not yet in decline, there is little sign that growth will return. Looking forwards to the 2019/20 financial year, the proportion of those questioned saying they anticipate growth was 27%, only marginally higher than the 26% predicting cuts, giving a net balance of just 1%.
Joe Hayes, an economist at IHS Markit, which compiles the report for the IPA, expects marketers’ “downbeat stance to persist” as companies tighten their belts in order to protect profit margins.
“The slowdown in marketing budget growth seen in recent quarters culminated in Q4, as the six-year bull-run came to an end. Company-wide indecisiveness restricted the allocation of resources to marketers, as the wait-and-see approach to how the Brexit process will transpire appears to be the current strategy in place for many UK businesses,” explains Hayes.
The neutral stance on marketing budgets comes as marketers also turn pessimistic about the economic outlook for their companies for the first time since the third quarter of 2012. Overall, a net balance of 0.9% believed their business…