However the net balance of -3.1% for market research budgets was an improvement on the previous quarter’s -7.3%.

Confidence in the wider financial environment dipped, with growing concern over the macroeconomic climate including Brexit, disappointingly weak global economic growth and ongoing government spending cuts.

Sentiment about industry financial prospects dropped to the lowest level since the start of 2013, from +7% in Q4 2015 to -6.5% in Q1 2016. However, marketing executives remained positive about their own budgets for the coming accounting year, with +23.3% forecasting higher spend in 2016/17.
 
Bellwether predicts adspend growth of 3.3% for 2016, a downward revision to the 3.9% it projected in Q4 2015.

Geoff Copps, head of research, IPG Mediabrands UK, said: “It’s great to see a positive outlook for 2016/17 marketing budgets; the cooling growth rate is a perhaps inevitable consequence of recent economic and political uncertainties. Interestingly, despite pressure on costs, evidence of marketers’ commitment to innovation and promoting new products continues, in the form of upward revisions in digital platforms and main media budgets.

“In an environment where growth is sustained but uncertainties lie ahead, market research has a strong role to play in supporting new product development, and in delivering the insight required to give confidence and direction for those big marketing decisions.”

The Bellwether Report is researched and published by Markit Economics on behalf of the Institute of Practitioners in Advertising.