The Q2 2014 IPA Bellwether Report, published today, reveals that marketing budgets continued to be revised up for the seventh successive quarter as marketing executives sought to boost brand awareness, maintain market share and capitalise on the favourable economic climate.
Here, after the longest period of continuous growth in the survey’s 14-year history, Richard Sexton, chief operating officer at Carat, shares his analysis of the findings.
Recently Diageo launched Haig Club Single Grain Scotch Whisky. Its costs £45 a bottle and the campaign was fronted by David Beckham. This sort of launch and price point shows that Diageo, alongside many other clients, are feeling increasingly confident about consumer spending habits.
Then there’s the news that Lidl is moving into Waitrose’ middle class patch by offering upmarket wines – a Châteauneuf-du-Pape, no less. Showing that as long as they get value for money, consumers have no problem spending on discretionary purchases.
So, it comes as no real surprise to us that the Q2 Bellwether Report has highlighted the longest period of marketing spend growth predictions in the report’s 14 year history,
The positive numbers come on the back of a slew of other significant milestones offering further proof that confidence is on its way back.
The GfK consumer confidence index report turned positive – just – for the first time since 2005 while significantly for advertisers, their ‘Is now the right time to buy a major purchase?’ index reached its highest level since before the recession started in 2007.
Finally, a recent Mintel study shows that 69% of consumers feel their household financial situation is ‘ok’ or ‘healthy’.
Clients are also drawing confidence from broader economic indicators of continued low interest rates, decreasing unemployment (now at their lowest level for nearly six years, according to the ONS) and rising growth forecasts for the UK.
The upshot being that more marketers are predicting an increase in their marketing spend rather than a reduction. This certainly seems to be true from our own client base.
All of this is vitally important for media agencies and their planners. To do our job properly we need to create ecosystems for clients – and without this confidence it becomes increasingly difficult for our planners to recommend additional channels that will actually enhance the business value. It gives them the confidence to create a campaign that can deliver to a client – rather than worry about how many fewer TVRs should be on a plan year-on-year.
Our industry needs confidence to continue to strengthen, because there are still issues that could easily derail this growth. Globalisation means marketing pots are more often than not being divided up at a pan regional level, and Europe probably won’t look too kindly on a Britain without Scotland, and a newly shuffled, more Eurosceptic Government.
There is also serious talk now of interest rates rising this side of Christmas – potentially just in time to dent that significant Golden Quarter for both brands and retailers.
