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Business marketing budgets continue to rise in Q2

Jul 17
 
Tags: Marketing / Sales
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Business marketing budgets continue to rise in Q2

UK businesses continued to expand their marketing budgets during the second quarter of this year, according to the latest figures from the Institute of Practitioners in Advertising (IPA).

The industry group's Q2 2015 Bellwether Report, produced by Markit, showed a net balance of +12.2 per cent of companies reporting an increase in marketing spend from April to June.

This is up from +11.8 per cent in the first quarter and +6.1 per cent at the end of last year.

Furthermore, the balance of firms indicating growth in total marketing budgets for 2014-15 reached +15.1 per cent, following the nine-year record of +19.9 per cent set in 2013-14.

The balance figure is calculated by subtracting the percentage of respondents reporting lower investment in marketing from the proportion registering growth.

While spending in this area of business appears to be on the rise, the Bellwether Report also showed a decline in optimism relating to companies' financial prospects. The net balance in this regard was at a nine-quarter low - although still firmly in positive territory - at +25.3 per cent, down from +37.8 per cent in the previous survey.

The outlook for wider industry financial performance followed a similar trend, falling from +26 per cent to a two-year low of +13.1 per cent.

Paul Bainsfair, IPA director general, said: "With 11 quarters of successive growth in marketing budgets and a strong start to the financial year, this latest Bellwether is generally positive.

"With confidence on the wane, however, it is worth reminding marketers … you won't produce profits over time without maintaining brand-building ad spend. So while it is good to see sales promotion activity is on the increase, the industry must guard against short-termism."

The study forecast total UK ad spend growth of +4.2 per cent in 2015, unchanged from the Q1 outlook. This was dependent on economic activity picking up during the second half of the year.

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