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UK events budgets increase for 15th successive quarter

And companies are ploughing marketing investment into digital advertising, according to the IPA Bellwether Report
19/07/2017

Pictured: the Q2 2017 IPA Bellwether Report

Events budgets showed a fifteenth successive quarterly increase in the second quarter of 2017 according to the Q2 2017 IPA Bellwether Report.

However, the degree to which budgets were increased remained on a downward trajectory, with the respective net balance falling to 2.1 per cent. That compared to 4.9 per cent in the preceding quarter and was considerably lower than the 2016 average.

During the second quarter, just over 19 per cent of the survey panel recorded an upward revision to events budgets, compared to a little over 17 per cent that signalled a decline.

The survey also showed that UK companies are ploughing their marketing investment into digital advertising, which is driving overall growth in all marketing budgets. However, due to the general election result creating increased uncertainty over Brexit and inflation concerns, companies’ overall financial prospects are waning.

Paul Bainsfair, director general of IPA, said: “The election result has thrown further uncertainty into an already volatile environment. It is inevitable that this has had a knock-on effect on UK plc. Specifically for marketers this has meant a desire, where possible, to seek out more activation driven advertising. This has resulted in a further move towards advertising in the digital space.”

The survey showed that around a third of the survey panel recorded an increase in internet marketing budgets (32 per cent), against a little over 9 per cent of panellists that recorded a fall. That provided a resulting net balance of 22.7 per cent, which was up sharply since Q1 2017’s 16.9 per cent and the highest reading since Q3 2007.

Despite overall growth, the report found that the upturn in uncertainty following the surprising general election result, allied with the unknown effect on economic activity of the Brexit negotiations, had a noticeable impact on financial prospects during Q2 2017.
 
Although 30 per cent of the survey panel are more optimistic regarding their own financial prospects, more than 20 per cent have become less confident. The resulting net balance of 9.8 per cent was down from 13.9 per cent in the preceding quarter and the lowest recorded by the survey since the end of 2012.

Paul Smith, senior economist at IHS Markit, said: “Current economic conditions are sufficiently strong enough to support higher sales and demand, encouraging firms to provide product support through ongoing marketing budget expansion. However, the uncertainty caused by Brexit and a surprising general election outcome are skewing risks to future growth broadly to the downside resulting in subdued financial prospects, both at the company and wider macro levels.”

Reacting to the report, Emily Shaw - strategy director at FreemanXP EMEA - said: "It's great news that marketing budgets are up overall, and even more so that events have seen an increase in each of the past 15 quarters in spite of external factors such as global security concerns and recent events. The latter supports our own proprietary research, which confirms the effectiveness of brand experience as a marketing tool.

"In terms of rise in internet spend, online marketing ROI is giving the proof points of efficacy to marketers, which is naturally boosting confidence in allocating further budget toward it. This investment will result in further development of more precise tracking and measurement methodologies and tools, which is great news in the world of experiential, where the desire for real time response and meaningful measurement is high. Understanding when and how people are engaging with brands and how they are behaving in a space at any given moment is fundamental to designing more meaningful and memorable experiences for our clients and their most important audiences, thus delivering greater value."


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