Revisions to total marketing budgets were put on ice during the third quarter of 2024 according to the latest IPA Bellwether Report.
The Q3 findings revealed the net balance of UK companies revising their marketing budgets (21.6%) versus revising them down (21.6%) has dropped from +15.9% in Q2 to 0.0%.
This demonstrates a significant shift in behaviour from the growth observed over the previous 13 quarters, which had averaged a net balance of +8.8%.
The revisions indicate that UK companies are taking a more cautious approach to spending amid uncertainty regarding the imminent autumn budget.
Despite this renewed apprehensive approach to marketing spend, the breakdown revealed several strong-performing media categories in the third quarter.
Public relations saw the most significant upward revision, with the net balance soaring to a record high +11.0%, from +2.6% in the previous quarter.
Ranking second was events with a net balance of +9.9% as demand for in-person and face-to-face interactions with current and prospective customers remained strong.
Direct marking followed closely behind, with the net balance printing the strongest reading in three quarters at +9.7% (+8.9 in Q2), signalling a continuation of this segment’s impressive growth streak.
Main media advertising experienced a second consecutive quarter of budget increases, with the net balance climbing from +3.5% to +4.3%, this segment’s strongest growth in a year.
The breakdown by sub-category showed that this growth was driven by big-ticket video campaigns, which saw the net balance of firms registering upward revisions rise to +11.7% from +7.8%, its highest since Q4 2022.
Following stabilisation in the previous quarter, out of home marketing experienced the most significant downward revisions to marketing expenditures in the third quarter.
This was followed by audio which weighed down main media marketing, with the net balance dropping to -10.0% from -5.5%.
Finally, budget allocations were reduced for both market research, which saw its net balance drop to -1.5% from +3.2%, and other forms of paid marketing (-9.7% from -7.6%).
Bellwether data for Q3 indicated a shift in sentiment compared to the previous quarter, with attitudes toward company-specific prospects turning negative after nearly two years of optimism.
While a net balance reading of -2.2% indicated only slight pessimism regarding their company financial outlooks, this marked the first time in seven quarters that the net balance posted below zero and highlighted a stark contrast to last quarter’s reading of +13.6% (which was almost a three-year high).
Nearly a quarter (23.9%) of those surveyed expressed downbeat sentiment in the three months leading to September, a shade above the 21.7% who were positive.
A sizeable 29.6% of marketing executives reported a more pessimistic view of the broader industry’s financial prospects, almost double the 13.4% who were optimistic.
Read the full report here.