UK companies are heading into 2020 with renewed optimism and plans for greater marketing spend as uncertainty surrounding Brexit subsides and the political environment becomes more stable, the latest quarterly IPA Bellwether Report has found.
During the final three months of 2019, a net balance of +4% of enterprises increased the scope of their marketing budgets, a marked uptick on the -0.5% figure recorded during the previous quarter.
The rate of expansion in Q4 is the strongest for almost two years and suggests that companies are now ready to invest heavily in content, advertising and other marketing endeavours as the new year gets underway.
The report expects the feel-good factor to prevail for some time as its preliminary outlook for the 2020/21 period shows a net balance of +15.7% for companies expecting budgets to grow during the next 12 months or so.
Brexit has cast a shadow over marketing planning since 2016, but that gloom now appears to be lifting as a more resolute outcome approaches with the UK expected to formally leave the EU on 31st January.
A number of the surveyed companies said that they have been motivated to spend more on marketing since the result of the General Election, which saw the Conservatives deliver a landslide victory and a large majority.
IPA director general Paul Bainsfair believes that it will not be “plain sailing” just yet as Brexit has been such an arduous process that marketing leaders and decision-makers are still tentative about future planning.
However, the signs are pointing to greater investment in content marketing and other activities such as PR, sales promotions and events among UK companies this year.
IHS Markit economist Joe Hayes added: “It appears that firms are looking to release the pent-up investment which has been put on hold amid the high degree of political and economic uncertainty which has plagued the UK business climate for well over 12 months now.”
Since the release of the report last week, various leading figures in the marketing industry have reacted to the news of rising budgets for the year ahead.
Future Publishing CRO UK Zack Sullivan believes that the latest report shows there is a “new wave of confidence” and that digital content and marketing is particularly lucrative at the moment.
He also urged brands to be brand safe, transparent and relevant to succeed in 2020.
Peer39 managing director Andrew Morsy says that many companies in the UK used a difficult 2019 to reassess their strategies and are now attempting to drive new business leads and foster brand awareness, which are the main reasons behind the rise in investment.
Meanwhile, M&C Saatchi Performance managing director Libby Robinson recommends a focus on return on investment and performance during the first year of the new decade as this will minimise inefficiencies and support better campaigns across the entire funnel.
The report found that around a quarter of companies observed a growth in budgets in Q4, while 58% saw spending allocation remain unchanged.