Marketing budgets have stalled due to negative speculation around the upcoming Autumn Budget.
- For the first time in almost four years, growth in marketing budgets has ceased.
- PR and ad spend continue to show some positive trends despite the stall.
- Uncertainty in government policy is causing companies to pause advertising activities.
- Adspend forecasts have been cautiously revised upwards for 2024 and 2025.
The marketing industry faces a stagnant period as budgets fail to expand for the first time in nearly four years. Amid concerns about the Autumn Budget, firms are hesitant to increase spending, a shift from the previous trend of robust growth. This reluctance is tied to anxieties about potential unfavourable tax changes that the upcoming budget might introduce.
While the general marketing budget has experienced a standstill, certain areas continue to perform well. Public Relations and advertising expenditures have notably increased, with PR seeing a significant net balance of +11% compared to the previous quarter’s +2.6%. Main media advertising exhibits the strongest growth in a year, highlighted by a rise from +3.5% to +4.3%. This category includes major video campaigns and sees contrasting trends, such as Out of Home advertising’s steep decline and minor drops in published brands.
The anticipated policies from the government’s forthcoming budget are a source of uncertainty, leading many businesses to temporarily pull back on their marketing efforts. Joe Hayes from S&P Global suggests that while the current pause is disappointing, it does not necessarily signal a prolonged downturn. Throughout the long history of the Bellwether survey, political uncertainties like these often influence corporate decision-making.
Despite the hold on marketing budgets, there is cautious optimism for the future. Predictions for adspend have been raised for 2024 and 2025, reflecting strong economic data. Paul Bainsfair of the IPA posits that companies are conserving their budgets in the interim, waiting for clearer economic guidance. This strategic pause might allow businesses to make more impactful advertising investments later on.
Sue Benson echoes this sentiment, observing that while the current findings are not surprising given recent highs, they still disappoint. Businesses are postponing projects, anticipating a clearer post-Budget environment. There is a hopeful outlook that with improved economic clarity, marketing activities will regain momentum, shifting budgets to forward-thinking investments.
The marketing sector awaits the Autumn Budget’s clarity, banking on potential economic stability to resume growth.
