UK companies increased marketing budgets in the first quarter of 2024, from the previous quarter of 2023 at a rate not seen since 2022, according to a new report.
While budgets increased in Q1, spend was directed towards event-led activity and product promotions, according to the Institute of Practitioners in Advertising (IPA) Bellwether Report for the first three months of the year.
The IPA found events budgets expanded fastest rate on record with the financial year 2024/25 forecast to be very strong for event spend.
“Spring is in the air, bringing with it a greater sense of optimism in the UK economy and in UK companies’ marketing spend intentions for the year ahead,” said Paul Bainsfair, director of the IPA.
“UK companies are once again recognising the value of advertising by revising their spend up this quarter.”
The report did find that some companies were slightly reducing their spend on traditional media, however, something on which the IPA director issued a note of caution.
“We’re seeing companies revert to upping their promotional spend while revising their main media spend down – a trend that had been bucked over the past couple of quarters.
“While sales promotions can stimulate short-term sales increases, the evidence also shows that their over-use can undermine a brand’s profit margins and pricing power over time by habituating consumers to buy mainly on price.”
The IPA said a careful balance needs to be struck “to ensure longer-term growth, for which greater investment in brand advertising, particularly in main media, pays dividends.”