Advertising spend is set to increase in the UK over the current quarter despite falling confidence among marketers, according to the latest Bellwether report from ad trade body the IPA.
More than a quarter of marketers said they had increased budgets for the three months ending September, compared with 13% who said they had reduced them, giving a new balance of 12.2%.
However, the distribution of spending was uneven, with events seeing the largest proportion of companies setting increased budgets. Internet spending was revised up to a net balance of 6.4%, but this was a two-and-a-half-year low.
Though budgets are increasing during the quarter, marketers were increasly negative about the prospects for their company. The net balance of marketers saying they were optimistic about their organisation’s future declined to 25.3%, the lowest level for three years.
“At the headline level, the Bellwether for Q2 2015 provided further positive news on marketing activity in the UK, with growth being extended to just short of three years and at a rate that remained historically strong,” said Paul Smith, senior economist at Markit and author of the Bellwether report.
“Below the surface, however, the underlying drivers of growth are a little harder to read. On the one hand, companies are showing an increasing willingness to engage in corporate hospitality, conferences and sponsorship.
“But belying this confidence is an increased willingness to engage in discounting and promotional activities designed to support sales at a time when the economic and financial outlook for companies has become just a little more uncertain. Whereas we see growth holding up in 2015 overall, the latest survey supports the projection of softer expansion further out.”
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