Marketers’ confidence about future business performance has fallen to the lowest rate in almost three years, as companies worry about costs and the economic outlook in the UK and overseas markets such as China.
UK marketers painted a mixed picture, choosing overall to raise their budgets in the fourth quarter – but only by the smallest amount in almost three years, indicating growing concerns about the economic climate, according to the latest Bellwether report from ad trade body the Institute of Practitioners in Advertising.
Marketers, who have increased their budgets for 13 successive quarters, reported a significant fall in confidence despite the prospects of an advertising-fuelled business boost from the Euro 2016 football championship and the Rio Olympics.
The IPA report, a quarterly gauge of the health and prospects for the ad industry published since 2000, found that marketers’ optimism about their financial prospects had fallen sharply.
“Marketing budget growth eased again in the final quarter of the year, slipping to a near three-year low in line with the softer UK macroeconomic environment that has been evident over the second half of 2015,” said Paul Smith, senior economist at Markit and author of the report.
Despite the concerns, the more imminent prospect of a business bonanza from Euro 2016 and the Olympics has led marketers to forecast an overall growth in their advertising budgets this year.
“Marketers have signaled a marked increase in their budget plans for 2016,” said Paul Bainsfair, director general of the IPA. “Tthe Olympics and Euros are on the horizon and Bellwether has predicted annual ad spend growth of 3.9%. Not a bad start to the year.”
