NEWS15 January 2020

Research spend cut while overall marketing budgets rise

Brexit Media News Public Sector UK

UK – Market research spend remained at the bottom of the IPA Bellwether’s budget rankings for a second successive quarter, despite a slight increase to total marketing budgets at the end of 2019.


The net balance of marketers reporting a drop in research spend was -13.2%, with around 23% of marketing executives surveyed registering downward spending revisions to research and around 10% observing budget growth.

While this has eased slightly from the -16.9% recorded in the third quarter of the year, the market research category experienced the biggest cuts to spend of the categories monitored in the quarterly research by the Institute for Practitioners in Advertising.

Total marketing budgets saw a ‘modest increase’ for the first time since the first three months of 2019 – a net balance of +4.0% of surveyed firms revised their total marketing budgets higher in the fourth quarter.

Budget growth was largely led by internet marketing, while main media advertising saw a fractional improvement and all other segments recorded spending cuts – events, sales promotions, PR and direct marketing.

Looking ahead to 2020/21, a net balance of +15.7% of companies expect their total marketing budgets to be upwardly revised, while -5.7% of firms foresee lower available market research resources.

Joe Hayes, economist at IHS Markit and author of the Bellwether Report, said: “The rise in total marketing budgets provides tentative signs of a momentum shift, particularly when coupled with preliminary data for the 2020/21 budget year. It appears that firms are looking to release the pent-up investment which has been put on hold amid the high degree of political and economic uncertainty which has plagued the UK business climate for well over 12 months now.

“Nevertheless, while these positive developments will perk up enthusiasm for marketing budgets in the coming year, downside risks to the outlook remain at large, particularly if a business cycle recovery does not fully materialise and Brexit uncertainty descends again.”