Marketing budget growth in the UK slows to zero as Brexit fears spread uncertainty

Anne Freier

In Mobile Advertising. July 18, 2019

UK marketing budgets slowed to 0% during the second quarter of the year, following a 8.7% rise in Q1. The findings by the latest IPA Bellwether report highlight that UK marketing budgets have begun to stall during Q2 2019 due to continued uncertainty on Brexit and political leadership.

Growth during Q1 2019 has been attributed to a more proactive approach among companies.

Based on the budgets shared by 300 UK companies, 34% reported a pessimistic outlook on future budgets whilst just 8% remained optimistic.

“Between Boris, Jeremy and Brexit, coupled with a dip in consumer confidence, it is perhaps no wonder that this quarter’s Bellwether shows zero growth to overall UK marketing budgets,” explained Paul Bainsfair, IPA director general. “Until a clearer political and economic path is outlined, the vast majority of companies are locked in stasis. It is reassuring to see, however, that some companies are revising up their investment in main media advertising; this is where they will build the longer term growth of their brands, which is crucial to weathering these tougher times.”

Internet ads saw a 11.5% rise in budgets, down from 17.2% during Q1 2019. Search ad budgets grew 9.9% compared to 14.2% in the first quarter.

“It’s also heartening to see that marketers are continuing to invest in internet-based advertising, with search/SEO owning the lion’s share of growth,” David Walsh, Chief Business Officer, of Mindshare UK commented. “Recent research conducted by Mindshare for our Future of Search report found that two-thirds of UK consumers believe they conduct more searches than they used to before making a decision.”

A mere 20% of respondents reported higher budgets, which was offset by 20% cutting their expenditure. For 60%, budgets remained the same.

In 2019, the report expects a small annual increase of 1.1% in advertising spend given continued Brexit uncertainties and a likely hit on the UK economy.