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More marketers in the UK revised their ad budgets upward in Q1 2017 than cut back, with greater digital and total media advertising particularly notable, according to the latest edition of the Institute of Practitioners in Advertising’s quarterly “Bellwether Report.”
Polling of a panel of approximately 300 UK marketing professionals from the country’s top 1,000 companies by IHS Markit on behalf of the IPA found a net balance of 11.8% of respondents increased their ad budgets in Q1 2017, down only fractionally from the net 12.9% of respondents who said the same in the preceding quarter. (The net balance is calculated by subtracting the percentage reporting a downward revision from the percentage reporting an upward revision.)
Internet advertising was the media type mentioned most when it came to expanded spending, recording a net balance of 16.9% toward greater investment, up from Q4 2016’s 12.1% measure.
Within the internet sphere, spending related to search or search engine optimization saw the largest surge in support, with a net balance of 15.1% in favor of more investment, up from a 7.1% positive swing in Q4 2016.
Mobile-based advertising was also popular for upward revision, with a net balance of 10.3% of respondents saying investment grew, compared with the net 3.9% that said the same in the preceding quarter. The Q1 2017 figure was the highest recorded in the three-quarter history of tracking mobile ad spending plans.
Overall, “main media” advertising—which in addition to digital advertising includes TV, print, radio, cinema, outdoor and directory spending—tallied a net positive balance of 10.7% during Q1, up from 5.1% in Q4 2016 and the most positive result recorded by the survey in just under three years.
Direct marketing budgets also rose, with a net balance of 5.3% toward greater investment in Q1, up from an even 0.0% positive vs. negative tally at the end of 2016. For event spending, however, the percentage of respondents reporting increased budgets slowed from a net 12.3% in Q4 2016 to 4.9% in the most recent quarter.
“Once again the Bellwether shows that while the impact of Brexit remains uncertain, marketers are continuing to invest in marketing,” said Paul Bainsfair, director general of the IPA. “Furthermore, despite the current, turbulent digital ecosphere, it is clear that marketers are attracted to the cost-effectiveness of digital advertising and its ability to reach and accurately target their consumers.”
Supported by an expected 2.0% gain in GDP growth by the UK’s Office for Budget Responsibility for the year, IPA predicts UK ad spending will swell by 0.6% in real terms in 2017, reversing a previously forecast 0.7% decline. While positive, that performance would be well below the 5.5% increase in UK total media ad spending forecast by eMarketer for 2017.
Paid media advertising outlays worldwide will increase 7.3% in 2017 to $583.91 billion. Growth will be roughly on par with previous estimates, and spending will rise at a steady pace throughout the forecast period, driven by increased investments in digital and mobile ads.
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