Advertising Digital Publishing
2 mins read

UK marketing budgets increase for first time in 18 months: Q2 2021 IPA Bellwether

Getting your Trinity Audio player ready...

Today’s Q2 2021 IPA Bellwether Report shows that UK companies have revised their total marketing budgets up for the first time in a year and a half (since Q4 2019) and to the sharpest extent since Q1 2019, as confidence levels remain in firmly positive territory whilst ad spend forecasts have been revised higher. The latest results bring to an end a five-quarter sequence of continual cuts to overall marketing spend.

The report also found that ‘financial prospects at company and industry level remain firmly in positive territory and ad spend forecasts are now revised higher for 2021, as businesses began to prepare for a strong economic recovery’.

The key segment of marketing, main media, also recorded growth in the second quarter. Within main media, video (+4.2%, from +3.3%), audio (+1.1%, from -9.0%) and other online advertising (+11.0%, from 0.0%) all grew. Disappointingly, within main media, advertising budgets for UK publisher brands were downwardly revised (-6.1%, from -22.2%), signaling continued pressure on publishers despite the underlying improvement.

Given the continued restrictions on large gatherings that were in place during the second quarter, events budgets (-24.7%, from -43.2%) registered by far the strongest decline of the monitored forms of marketing, again an area of concern for publishers reliant on events’ revenue.

Overall, with +45.9% of panel members becoming more optimistic regarding their company’s financial prospects compared to three months ago, and only +11.4% signaling pessimism, the resulting net balance of +34.6% indicates a strong overall level of confidence as companies enter the second half of 2021. 

Indeed, the Bellwether Report anticipates a much stronger expansion in GDP this year, followed by a robust rate of growth in 2022 amidst ‘record strong rates of growth in ad spend’. It has penciled in expansions of 7.5% and 6.0% respectively with ad spend growth moderating to 2.7% in 2023 once the UK economy has recouped the pandemic-related losses.

Joe Hayes, Senior Economist at IHS Markit and author of the Bellwether Report says, “The economic data that has emerged in recent weeks tell us that UK businesses have embarked on what we hope will be a short road to recovery. The Q2 2021 Bellwether report was no different, and the strongest upward revision to total marketing spend since the beginning of 2019 is a great indication that firms have grown confident towards economic prospects.”