Optimism on the rise among UK marketers

Warc’s latest forecast for ad spend growth in 2014 has the UK expecting a 5.4% year-on-year improvement, up 1.7 percentage points since the last forecast in June.

Based on these figures, the UK has grown more bullish than any of the other 12 countries featured in Warc’s report, and it’s expected to be the fifth fastest growing ad market behind China, India, Russia and Brazil. Overall though, with eight countries downgrading their expectations by modest amounts, forecast global ad spend growth of 5.2% is 0.2 percentage points lower than it was in June.

Returning to the UK, the latest Bellwether Report from the Institute of Practitioners in Advertising finds a net balance of 25.8% of companies expecting growth in 2014, which is the report’s most positive reading since 2008.

This expectation builds on a solid showing in the fourth quarter of 2013, where a net 11% of companies were registering an increase in budgets – which is the second highest rate of growth in the Bellwether’s history.

Net budget growth was reported for internet advertising, search, sales promotions, events and direct marketing. Main media advertising saw no change, but PR, market research and other paid-for marketing activity reported net declines in budgets.

However, at -2.5%, the net balance of market research investment was actually higher than it was in 2013, said Denise Turner, head of intelligence for Havas Media.

“Market research is a vital tool in the marketing director’s armoury, giving them the confidence to make those big decisions about increased marketing investment,” Turner said. “As such, the investment in market research often comes before the increase in investment. So although we have seen a slight decline in market research in the last couple of quarters, it is higher than in 2013, and comes off the back of strong performance.”

Bellwether author Chris Williamson, the chief economist at Markit, said: “The Bellwether survey indicates that marketing budgets are set to rise in 2014 to the greatest extent since 2008 as the UK’s economy recovery becomes more entrenched. The survey showed increasing numbers of companies setting their budgets higher than 2013 on the back of very buoyant optimism about their financial prospects.

“The upbeat picture for 2014 comes on the back of another strong increase in marketing and advertising spend late last year, adding to signs that the economy ended 2013 on a firm footing.”