The latest IPA Bellwether survey, published today, shows that marketing spend was revised higher in Q3 at the strongest rate in nearly 13 years.
The report, which has been conducted on a quarterly basis since 2000, revealed a net balance of 12.3% of companies registering an increase in budgets during Q3 2013, compared to 7.3% in Q2 – the fourth consecutive reading above zero.
Respondents to the survey sighted improved economic conditions and business revenues that in turn offered a platform for increased marketing investment.
Q3’s survey indicated that confidence for companies regarding their own financial prospects had grown to the greatest degree in eight-and-a-half years, with the net balance of firms reaching 49.2% – up from 27.6% in Q2.
The improvement in wider economic conditions was noted as a factor supporting optimism, driven by the latest figures regarding industry financial prospects.
The positive trends mean an increase in GDP forecasts for 2013; real UK ad spend growth is now projected to be 2.4% in 2013 and 3.6% in 2014.
In terms of sector, the Internet once again saw its budgets raised up to a greater degree than any other category with a net balance of 11.7%.
Within internet advertising online search, SEO spend recorded a net balance up 7.7%. Main media advertising saw a second successive period of growth, the strongest since Q3 2010 (3.4% net balance).
In contrast, Direct Marketing (-3.4%), Events (-1.1%), Market Research (-3.0%), PR (-1.7%) and ‘Other’ (-1.1%) all recorded net reductions, indicating that companies are still being prudent in their approach to spending.
“This latest Bellwether report will provide a welcome boost to our industry, building on last quarter’s results,” said Paul Bainsfair, director general, IPA.
“It indicates that companies are beginning to move forward away from the recession and that the UK economy is on the rise again. This optimism will send a continued upbeat message to the advertising industry and the wider economy.”
Chris Williamson, chief economist at Markit and author of the Bellwether report, added: “The Bellwether survey adds to the growing flow of upbeat data on the UK economy. Marketing spend looks set to rise sharply as companies boost their budgets to an extent not seen in the 13-year history of the survey.
“These survey findings are not only great news for the marketing industry but also for the UK’s broader economic recovery. The fact that business are starting to spend in earnest again suggests we may finally see a long awaited upturn in investment spending, which will help take the UK’s recovery onto a more sustainable footing.”
