Fall in market research budgets begins to slow

The report said that 17.5% of the almost 300 panellists interviewed for the research reported a decline in advertising budgets for market research between January and March, compared with 25% in the fourth quarter of 2020.

The fall in budgets continued a trend seen in every IPA Bellwether report since the third quarter of 2015, but marked the softest reduction since the end of 2019.

The Bellwether report found that 8.2% of firms saw a rise in budgets in the first quarter of 2021 compared to 11.4% at the end of 2020.

However, 26% of firms said they saw a decrease in budgets, which was down from 36.4% in the fourth quarter of 2020.

The report also said that a net balance of -4.9% of panellists anticipated a reduction in market budgets during the 2021/22 financial year.

A net balance of -11.5% of panellists reported a fall in total marketing budgets in the first quarter of this year, down from -24% at the end of 2020.

The report said that Covid-19 was the main factor in falling budgets and some business mentioned cost-cutting programmes affecting advertising spending, but that the general trend was the business conditions were now stabilising after a difficult 2020.

Paul Bainsfair, director general of the IPA, said: “Despite remaining in negative territory overall, the vital signs from this quarter’s Bellwether report are looking ‘V’ encouraging for a bounce back in UK marketing investment.

“With companies’ confidence levels regarding their financial prospects soaring and with almost three-quarters of UK companies either revising their marketing budgets upwards or keeping them the same this quarter versus last, the trajectory is very much moving in a positive direction and at a good pace.”