UK Marketing Budgets Closed 2016 on Strong Note Despite Brexit Uncertainty - eMarketer

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UK Marketing Budgets Closed 2016 on Strong Note Despite Brexit Uncertainty

Digital marketing is among main growth areas

January 23, 2017 | Marketing

UK marketing budgets climbed again in the fourth quarter of 2016, as surprisingly strong economic growth outweighed uncertainty surrounding the UK's exit from the EU. But the Institute of Practitioners in Advertising (IPA) said it still expects budgets to decline in 2017.

According to the latest quarterly bellwether report from the IPA, the number of UK firms boosting their ad budgets outpaced those cutting back for the 17th consecutive quarter.

The IPA's study of 300 UK marketers, drawn primarily from the nation's top 1,000 companies, showed a net 12.9% increased their budgets in the fourth quarter of 2016. The result was only fractionally lower than Q3's nine-quarter high of 13.4%. The measure is calculated by subtracting the percentage of companies reporting a downward revision from the percentage reporting an upward revision. More than 26% of the firms lifted budgets in the quarter.

Spending on events registered the largest upward movement over the previous quarter. Digital marketing also continued to rise, with a net balance of 12.1%. Within digital, key areas of increased spending were mobile advertising and search/SEO.

Not all channels saw increased spending. Direct marketing, sales promotions and market research registered declines.

In response to respondents' more positive sentiment, the IPA upped its anticipated gain in spending for 2016 to 2.1%, vs. a previous estimate of 1.9%.

For 2017, however, IPA predicts a 0.7% decline in spending due to uncertainty over effects of the to-be-determined terms of the UK's withdrawal from the EU.

—Cliff Annicelli

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