“Marketing budgets are on the rise to grow business” according to a report in M&IT online magazine dated 17 April 2019. The article suggests that UK companies revised their marketing budgets up markedly in Q1 2019. The net balance of marketing executives reported upwardly revised budget increases to 8.7% in Q1. This is up from a 0% reading for the final quarter of 2018 and the highest since Q3 2017. Around 21.6% of panel members observed spending growth, compared to 12.8% registering budget cuts.
Although approximately 26 % of panellists foresee growth, the remaining 74% expect cuts or no change. Compared to this time last year, a net balance of 18% of firms anticipated budget growth for the 2018/19 period.
Paul Bainsfair, IPA director general, states “this sharp increase following Q4 2018’s flat lining signals that UK marketing budgets have received a much-needed kiss of life in an economy gripped by Brexit uncertainty. The smart marketers realise that to grow their businesses, they must invest in them, particularly in mass reach, long-term media. Those that want real competitive advantage should follow the proven rule that if you increase your share of voice above your share of market, you should expect to experience growth”.
Marketing is hot
A renewed drive for big-ticket advertising campaigns was apparent during the opening quarter of 2019. Main media marketing returned to growth (5.2% from -6.2%). Events were the third and final Bellwether category to register expenditure growth (3.4% from 2.6%).
Joe Hayes, economist at IHS Markit and author of the Bellwether Report, reports “a return to growth in marketing budgets during the opening quarter of 2019 may come as a surprise given the uncertainty that shrouds the UK political and economic climate. However, some companies began to show a determination to step up brand-building and protection in these challenging times. This shows a pro-active approach in the face of business belt-tightening and weakening consumer confidence. That said, cautious undertones were still apparent in budget plans for the 2019/20 financial year, with panellists providing only modest growth expectations in available marketing spend.”
The lesson we take from this news is quite simply that marketing investment is seen by ambitious business leaders as a positive way to protect relationships, increase brand awareness and build brand reputation.
Below the line marketing
The IPA Bellwether survey reports increased spend on advertising and digital marketing aimed primarily at consumers and customers. It also notes an increase in budgets for events. Below the line activity, including corporate events, is the foundation on which campaigns are built. The live event experience is the most effective medium for engaging with the business partners who deliver the products and services being advertised.
Employees, channel partners and influencers manage the connection with customers and consumers. They must be informed, trained, engaged and motivated at every stage in the sales process. It is pointless and potentially harmful to implement expensive above-the-line campaigns if the reality does not match the hype! That situation can best be avoided by clear, consistent communication with the stakeholders in the business, to reinforce their value, secure their loyalty and sustain their commitment.
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