Market research budgets continue downward trend

The net balance for market research spend reached -5.4%, down from -2.4% in the previous quarter, with around 15% of the survey panel noting a downward revision. Just under 10% of respondents recorded an increase to market research budgets.

The reduction of market research budgets continues a period of contraction that has now lasted for two-and-a-half years.

However, the report suggested mild optimism for the year ahead, with provisional data indicating that around 14% of panellists are expecting growth in market research, with the resulting net balance of +3.3% the highest in three years, compared to 11% who predict budgets to decrease. 

While marketing budgets overall maintained growth in the last quarter of the year, the report found that the net balance of +8.6% was down from +9.9% in the previous quarter – the slowest rate of growth since Q1 2016.

Against a backdrop of Brexit uncertainty, 23.9% of marketing executives said they had raised their budgets during the latest survey period, while 15.2% reported cuts, with respondents citing client caution and continued economic uncertainty.

Internet marketing maintained its position as the best performing category, however, its net balance of +10.9% was the lowest recorded since Q3 2016 and a notable decrease on the previous survey’s +17.0%.  

Dr Paul Smith, director at IHS Marquita and author of the Bellwether Report, said: “Whilst fears of a sharp deterioration in the UK economy following the surprising EU referendum result in 2016 have so far proven to be unfounded, the current trend in growth signalled by the Bellwether survey is nonetheless consistent with an economy undermined by ongoing Brexit uncertainty and an increasingly common ‘wait-and-see’ attitude amongst businesses and consumers alike.”