The net balance of marketing executives reporting upwardly revised budgets increased to +8.7% in Q1, up from a 0.0% reading for the final quarter of 2018 and the highest since Q3 2017. Around 21.6% of panel members observed spending growth, compared to 12.8% registering budget cuts.
It will come as little surprise that best performing category of the Bellwether survey was internet, which saw its net balance jump from +2.1% to +17.2%.
Firms showed a strong appetite to enhance their digital footprints, with Search/SEO spending (+14.2% from -3.9%), as well as targeted advertising on mobile (+3.6% from -2.4%) both receiving boosts.
But a renewed drive for big-ticket advertising campaigns was also apparent during the opening quarter of 2019, with main media marketing returning to growth (+5.2% from -6.2%). Events was the third and final Bellwether category to register expenditure growth (+3.4% from +2.6%).
“A return to growth in marketing budgets during the opening quarter of 2019 may come as a surprise given the uncertainty that shrouds the UK political and economic climate has only built further since the previous Bellwether Report,” said Joe Hayes, Economist at IHS Markit and author of the Bellwether Report.
“However, some companies began to show a determination to step up brand-building and protection in these challenging times, taking a pro-active, yet defensive approach in the face of business belt-tightening and weakening consumer confidence.”
Elsewhere, the outlook was rather less positive. Firms were downbeat across the remaining Bellwether categories: negative outlooks were recorded for other marketing (-13.1%), PR (-7.0%), sales promotions (-5.3%), market research (-4.0%) and direct marketing (-1.8%).
And negativity was growing among marketers, as a net balance of -2.7% indicated a pessimistic assessment towards their company’s finances, compared to -0.9% during the final quarter of 2018.
Nor were they optimistic about the wider industry, with the net balance of firms casting a downbeat assessment standing at -22.6% (- 28.6% in Q4 2018).
The Bellwether Report also downgraded its forecast of advertising expenditure growth for the year from 1.4% to 1.1% in the face of Brexit uncertainty, slowing global growth and rising competitive pressures.
At the same time, however, it revised upwards its growth estimates for the years 2020 to 2023, assuming restored business and consumer confidence once future UK-EU relations become clearer.
The full-year AA/WARC Expenditure Report, which is the only to collect advertising spend data from across the entire media landscape, is due to be published on Tuesday 30th April.
Sourced from IPA Bellwether Report; additional content by WARC staff