Research budgets continue to fall

The latest version of the quarterly report, based on a survey of marketing expenditure among marketing professionals in the UK, revealed that while marketing budgets were revised upwards in Q4 2015, it was to the weakest degree in nearly three years.

More specifically, budgets were expanded for internet marketing, main media, PR and events, but fell for market research, sales promotion and direct marketing.  The downward revision for market research was the second consecutive move in this direction: the net balance dropped to -7.3% from -4.7% in Q3. Nearly 18% of panellists recorded a downward revision and only 10% indicated growth. Furthermore, marketers’ confidence regarding their own financial prospects was at its lowest rate in 11 quarters. 

Despite this, nearly 25% of companies expected growth in their total budgets for the year ahead. 

“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. 

“Moreover, as has been the case in the post financial-crisis world, companies are maintaining a keen sense of cost-consciousness and a value-for-money approach to their marketing budgets. Such forces have probably weighed on growth in the final quarter of the year.
 
“However, given that the current run of expansion now extends to over three years, by far the best in the 16-year survey history, our gaze remains firmly fixed on the positive aspects of the survey especially the marked upturn in budgets planned by marketing executives for 2016/17. We therefore wait to see if Q4 2015 proves to be a nadir in the current cycle or whether we have a little way to go before we again see a sustained upward trajectory in Bellwether.”

The survey is published by Markit Economics on behalf of the IPA, and results are based on a panel of 300.