Marketing budgets hold up amid growing uncertainty

Marketers shrugged off political and economic uncertainty by increasing their ad budget forecasts at the end of 2016, but there are signs of wavering confidence as the government’s Brexit negotiations loom. This means the net balance of marketers saying they would increase their marketing spend was 12.9%, marking the 17th successive quarter of growth. The survey indicates companies were most willing to increase their ad spend in events and internet marketing. Events saw a net balance of 12.3% predicting a budget hike, growing 2.4 percentage points compared to the third quarter. The internet category, which covers online marketing platforms, recorded a net balance of 12.1% for the fourth quarter. If brands move forward, consumers will move forward. An uncertain but ‘fascinating’ year ahead On the face of it, the report seems positive. The resulting net balance of -14.6% was down on the previous quarter’s -12.1% and the lowest level recorded for four years. Despite the current uncertainty, Joe Staton, head of market dynamics at GfK, insists marketers need to ensure they don’t stop spending and keep investing in innovation to drive the market forward. If brands move forward, consumers will move forward.

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Marketers shrugged off political and economic uncertainty by increasing their ad budget forecasts at the end of 2016, but there are signs of wavering confidence as the government’s Brexit negotiations loom.

More than a quarter (26.2%) of senior marketers indicated an increase in marketing budgets in the fourth quarter of 2016, compared to 13.4% who signalled a fall, according to the IPA’s quarterly Bellwether report.

This means the net balance of marketers saying they would increase their marketing spend was 12.9%, marking the 17th successive quarter of growth. It is only fractionally lower than Q3’s net balance of 13.4%. Meanwhile, ad spend for the full year rose 2.1%.

The survey indicates companies were most willing to increase their ad spend in events and internet marketing. Events saw a net balance of 12.3% predicting a budget hike, growing 2.4 percentage points compared to the third quarter.

The internet category, which covers online marketing platforms, recorded a net balance of 12.1% for the fourth quarter. This is an increase on Q3’s 9.5% balance and marks the highest reading for two years.

Marketers also increased their engagement with mobile advertising over the quarter as the net balance grew to 3.9%, compared to -2.6% in the preceding quarter. In contrast, sales promotions (-1.8%) and market research (-2.5%) both recorded declines.

Now isn’t the time to slash the innovation budget and draw up the bridge. If brands move forward, consumers will move forward.

Joe Staton, GfK

Pete Markey, brand communications and marketing director at Aviva, recognises the shift towards digital and believes it will result in more “short-term deals.”

“The focus on shifting more budget to effective digital and social media channels will continue at pace as more brands test and learn using the latest and best marketing tools to drive a greater ROI at channel level. Some brands will defer big investment decisions depending on which sector they…

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