While UK marketers have revised their internet budgets up to the greatest extent since Q3 2007, and the expansion in marketing budgets overall is the largest for just under a year, market research budgets have fallen by 6.2%. 

The report, researched and published by IHS Markit on behalf of the IPA, suggested that optimism regarding company financial prospects was the lowest for four-and-a-half years and that industry financial prospects have turned increasingly negative. 

It also predicted modest growth in adspend in 2017, before stagnation in 2018. It cited Brexit, political uncertainty and rising inflation as the biggest threats to the marketing outlook. 

Bellwether anticipates a ‘somewhat recovery’ to take place during 2019 and 2020, with adspend forecast to rise by 1.8% and 2.3% respectively. 

“The election result has thrown further uncertainty into an already volatile environment," said Paul Bainsfair, director general of the IPA. "It is inevitable that this has had a knock-on effect on UK plc. Specifically for marketers this has meant a desire, where possible, to seek out more activation driven advertising.

"As evidenced strongly in this latest Bellwether Report, this has resulted in a further move towards advertising in the digital space. While it is good to see spend up in internet, it is worth remembering that IPA studies have consistently shown that the most effective marketing results from a 60:40 brand building (emotional) to sales activation ratio (rational).”

The full report can be purchased here.