IPA Bellwether Report Q2: Jeremy Reacts

*Initially posted in Campaign.

Marketing budgets have steadfastly grown, even as financial prospects have deteriorated sharply, IPA’s Bellwether Q2 2022 report has shown.

Its quarterly survey of 300 UK-based companies revealed that 24.2% of them raised their total marketing expenditure during the second quarter, with 13.4% cutting their budgets, creating a net balance of +10.8%.

This demonstrated a slowing in budget growth when compared with the first quarter of 2022, which had a net balance marketing budget growth of +14.1%.

Despite marketing budget increases, 40.3% of respondents were pessimistic about the financial outlook of the industry and only 13.6% were optimistic (net balance -26.7%).

On an individual business level, 30.7% of respondents were pessimistic about their own business prospects, with 21.2% of respondents being optimistic, (net balance -9.5%).

What’s ahead?

IPA cut its adspend growth forecast from 3.5% to 1.6% this year as the cost of living crisis looks to spill over into 2023.

Not only that, IPA has cut its GDP forecast for 2023 from 1.2% to 0.5% and reduced its adspend growth forecast from 1.8% to 0.8%.

Jeremy Hine, chief executive of MullenLowe Group UK, said: “With lower- and middle-income groups being impacted the most during this coming recession, brands that have an in-depth understanding of their customer groups will be much better placed to withstand the upcoming economic challenges. Those that aren’t prepared or simply not geared up to monitor these inevitable changes in consumer behaviours will struggle.

“Above all, it is imperative that we work together to battle through what will certainly be stormy waters over the coming months.”