UK Marketing Budgets on the Rise
UK marketing budgets are rising again for the first time since the Covid pandemic first hit the global marketing economy with online advertising being one of the areas showing the biggest growth at 11%
Marketing budgets were the first variable expenditure to be cut for most businesses as the pandemic depleted turnover and profit, throwing marketing plans out of the window and forcing marketing managers to adapt to the unknown.
This downward pressure on finances finally appears to be lifting, with marketing budgets across the spectrum increasing for the first time since the final quarter of 2019, according to the latest quarterly IPA Bellwether report for Q2 2021.
Almost half (45.9%) of those companies surveyed by the researchers are feeling more positive regarding their company’s financial prospects for the future, compared to less than 12% last quarter. This resulted in a net balance of over 34% pointing towards a strong overall level of confidence. Although this net balance is lower than in the first quarter of 2021 (36.6%), it is the second-highest level since the first quarter of 2015.
Preston Digital Agency, Piranha Digital, has also noticed this upward trend in confidence with clients returning to the office and making strong marketing plans for the future. Over the next 18 months, Piranha anticipates digital advertising expenditure growth growing by 3% in 2023 once the UK marketing economy has recovered from the pandemic-related financial losses, and then growth of 1.3% and 2.5% in 2024 and 2025, respectively. All in all, after a bleak year, things really are looking up for the digital marketing sector and for website design companies in Preston.
Pent up demand for products and services is one aspect that has given major brands and companies confidence in increasing budgets to help compete for this lucrative growth is spend amongst UK consumers. Homewares, DIY as well as high end luxury products have seen some of the biggest recoveries in demand.
Economist at IHS Markit and author of the Bellwether Report, Eliot Kerr, believes the data shows UK businesses are now on the “short road to recovery” and this has been the “strongest upward revision” to total marketing spend since the beginning of 2019. “We hope that this is just the beginning and the end of lockdown restrictions, further improvements in vaccination rates and buoyant consumer spending will support even stronger growth in marketing spend in the second half of the year,” says Kerr.
The main media marketing category, which includes a broad variety of marketing channels, saw 1.3% of companies increase their marketing budgets (compared to -8.2% in Q1). Looking further into this category’, video grew from 3.3% to 4.2%, audio is up from -9% to 1.1% and online digital advertising grew from 0% to 11%. According to the report seen by Piranha Digital, “Budgets for publishing companies are growing but still negative at -6.1%, from -22.2% during the first quarter, while out-of-home advertising reached -7.5% from -24.1% last quarter. Again, still a negative figure but still a huge step in the right direction Understandably, compared to other forms of marketing, budgets for events continue to suffer at -24.7% (from -43.2% during quarter one), due to the continued restrictions on large gatherings in place during the second quarter.”