Ben Quigley, IPA Chair England and Wales, gives his verdict on the 2014 Q3 Bellwether Report and what it means for a now bullish industry.
As the old saying goes, what a difference a year makes.
The Bellwether Report is the business barometer for UK ad spend. It reports on original data from a panel of 300 UK marketing professionals drawn primarily from the nation's top 1000 companies.
We all know that marketing spend is the first cost to be cut in a recession, thus, Bellwether is a key indicator of the health of the economy.
What the Bellwether Report tells us at the end of Q3 in 2014 is that marketing budgets have now been revised upwards again, which extends a growth run which has lasted two years consecutively to date.
Out of the businesses surveyed, +12.6% more reported that budgets were actually raised up relative to their original plans representing the third highest net score in nearly 15 years of data collection.
And this is borne out from my personal experience.
In my role as IPA Chair for England and Wales, I have been talking to member agencies around the UK about this at events in Newcastle, Bristol, Birmingham and Manchester in the last year.
Without fail, member IPA agencies across England and Wales have told me that in line with recent Bellwether surveys, their clients have sought to take advantage of the increasingly positive economic climate by using their increased budgets both on high profile campaigns (such as TV, radio and cinema) alongside targeted, cost-effective online activation tools to raise the profile of their goods and services.
In other words, smart clients are scaling up investment in long term brand building and expanding sales for today.
What does this mean for agencies?
Well, hopefully, a fewer sleepless nights and an even more optimistic outlook going in to the final quarter of the year and beyond.
A net balance of +38.6% of companies surveyed by Bellwether indicated they'd grown more optimistic compared to three months ago about their own company's financial prospects, while confidence about wider industry prospects was also high in line with revisions to official data highlighting the fact the recession was less deep than previously thought and that recovery has also been stronger.
Bellwether tells us the top 1000 client companies are quickly onto effective strategies for growth, harnessing main media campaigns and online activation together for branded experiences. What IPA member agencies around the UK tell me is the rest are struggling with the dilemma whether to stick or twist;
- Should I invest more for long term growth or cut costs and try to ride the positive current trading conditions today? (Learn more about this with 'The Long and Short of It')
- What should be the balance of main advertising to online activation?
- How do I structure internal and external resource to deliver the most effective campaigns in this period of unprecedented technological change?
- How do I report outcomes to FDs effectively?
- What exactly is a CIO?
OK the last one is a joke but you get what I mean, right?
Success in the last two years means that forecasted growth in marketing spend is now revised upwards to 7% for 2014 (compared to 6.1% forecasted in the last report).
But success will inevitably lead to interest rates going up soon, which are predicted to cool marketing budget growth in 2015 to 3.8% according to Bellwether.
So, Bellwether gives us insight into both the health of the marketing economy and also, very valuably, guidance into what leading companies are doing about it.
Around the UK, when talking to our clients still wrestling with the 'right' way forward, our members are armed and ready to go.
Ben Quigley is IPA Chair England & Wales and Group Chief Executive at Everything Different.
Learn more about the 2014 Q3 Bellwether Report.
Last updated 16/10/2014