Marketing budgets stall for first time in six years
After six consecutive years the UK's marketing budget growth finally came to an end in the final quarter of 2018, according to the latest IPA Bellwether report.
The report found that in Q4 of 2018 marketers noted no change to their overall budgets, marking the first-time growth has flatlined since 2012.
Although there is evidence some marketers still feel some level of optimism for 2019, Brexit chaos has dampened both business and consumer confidence, driving down budgets and restricting marketing resources.
While 16% of marketers reported an increase, this was completely offset by a further 16% observing cuts to their marketing spend, leaving a net balance of 0% growth.
The Bellwether Report is researched and published by IHS Markit on behalf of the Institute of Practitioners in Advertising. The report features original data drawn from a panel of around 300 UK marketing professionals and provides a key indicator of the health of the economy.
"Company-wide indecisiveness restricted the allocation of resources to marketers, as the wait-and-see approach to how the Brexit process will transpire appears to be the current strategy in place for many UK businesses," said Joe Hayes, Ecomist at IHS Markit and author of the report.
“The neutral stance on marketing budgets came in tandem with a first pessimistic outlook by businesses towards their own companies’ financial prospects for the first time since 2012, suggesting that top-level belt-tightening and plans to protect margins has seen marketing executives be given less discretion."
Hayes added that provisional data for budgets for the next two years indicates that the downbeat stance seems likely to persist.
With the Office for Budget Responsibility (OBR) lowering its forecasts for consumer spending, business investment and ultimately GDP, Bellwether predicts "softer adspend growth" for 2018