Events was the best-performing subcategory of marketing in the busy 2023 holiday trading period with a 15.9% upturn. Direct marketing also had a successful three months, noting a 12.6% increase.
These two categories were the principal drivers of total marketing budget growth at the end of 2023 as expansions of a more modest nature were seen in PR (1.9%) main media, including TV and digital (1.9%).
We have another fun-packed year ahead of us, with recessionary pressures, an election, the Olympics and Euros all set to try our marketing resilience.
Sue Benson, managing director, The Behaviours Agency
Optimistic preliminary budget setting was seen in five of the seven Bellwether categories. Unsurprisingly, events is expected to have another strong year, with 17.8% of marketers boosting their budgets for 2024/25.
Since the last Bellwether Report, there has been little change made to S&P Global Market Intelligence’s forecasts for the U.K. economy overall. In fact, it’s expected to begin 2024 in a shallow recession, and the outlook for the remaining quarters is challenging. For the year as a whole, S&P’s forecast is for a 0.1% contraction as high borrowing costs and still-elevated inflationary pressures constrain economic activity.
Consequently, S&P forecast that U.K. ad spend will decline in real terms in both 2023 and 2024 (by 0.6% and 0.7% respectively). This is in line with global forecasts, which expect ad spend growth to slow in 2024.
The positivity gap
Despite a robust outlook, the latest Bellwether showed a widening gap between company-level and industry-wide financial prospects during the final quarter of 2023.
In short: Companies feel more bullish about their growth prospects compared to three months prior. However, they’re still concerned about the forecast for their sector as a whole.
When it came to the ad industry’s future, just 12.6% of respondents felt positive.
Paul Bainsfair, the IPA’s director general, said despite the overall sunny outlook advertisers weren’t out of the woods yet. He’s seen anecdotal feedback that some companies noted plans to price their goods and services more competitively in a bid to gain market share, a risky strategy.
He finished: “While this is good news for the consumer, it is further proof that companies are experiencing a tough trading environment. On this point, with the evidence showing that investing in advertising helps protect sales when businesses raise prices, it may prove more profitable for companies to increase their advertising than reduce their pricing.”
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