IPA Bellwether Report – 2021 Q115 Apr 2021 06:48
Cuts to UK marketing budgets ease in Q1 2021
Key points:
? Total marketing budgets fall at the softest rate since the first quarter of 2020
? Coronavirus restrictions continue to weigh on business conditions
? Sentiment regarding industry-wide financial prospects turns positive, while own-company expectations strengthen further
? Budget plans for 2021/2022 point to a recovery in total adspending, led by Main Media
The latest Bellwether survey results pointed to a further decline in UK marketing budgets in the opening quarter of 2021, as coronavirus lockdown restrictions continued to hinder economic activity and businesses looked to reduce costs. However, the downward trend softened for the third quarter in a row, in a sign that business conditions were beginning to stabilise after a year of turmoil in 2020.
A net balance of -11.5% of panellists reported a contraction in total marketing budgets during the first quarter of 2021. Although the rate of decline remained historically marked, it eased substantially from the final quarter of 2020 (net balance of -24.0%). Overall, just over a quarter (25.7%) of surveyed businesses saw a decrease in available adspend in the latest survey period, while 14.2% recorded an increase.
Unsurprisingly, restrictions related to the coronavirus disease 2019 (COVID-19) pandemic continued to act as the main drag on marketing budgets, according to anecdotal evidence. Amid softer demand conditions and ongoing closures in some sectors, businesses mentioned cost cutting programmes which had weighed on adspending in the latest survey period.
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