UK marketing budgets increased in the first quarter of 2024, a new report shows, with spending swinging towards sales activation efforts.
The IPA Bellwether Report for 2024 found that 24% of panellists saw an upward revision to their budgets in the quarter, with 15% seeing a reduction – a net balance of 9%.
While budgets were up overall, the data suggested a move away from big ticket advertising campaigns. Main media spend had a net balance of -1%, mainly driven by declines in out-of-home spending, while spending on sales promotions had a positive net balance figure of 5%.
This growth looked set to continue into next year’s budget, with 41% of respondents lifting the total amount available to marketing, while only 18% reporting cuts.
Paul Bainsfair, Director General at the IPA, noted a growing optimism both in the UK economy and in marketing spend intentions.
“Ahead of a suspected lightening-up on some economic pressures closer to home in the coming months, and despite wider geo-political uncertainties, UK companies are once again recognising the value of advertising by revising their spend up this quarter,” he said.
Commenting on the shift towards sales activation, he added: “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.
“As always, 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.”
(All figures quoted here have been rounded to the nearest percentage point.)
