Tom George, Chair at MEC London and IPA Media Futures Group, gives his Q1 2015 Bellwether Report verdict and what it means for the industry in the rest of 2015.
The optimism, which characterised the last edition of the Bellwether, continues in the latest publication. Marketing executives report a fifth consecutive quarter of positive net balance in media expenditure which is the best sequence in the report’s fifteen year history.
Those with glasses half-empty, however, may point to a slowing down in this net balance to 2.9% (the lowest in these five quarters) and could also cite an election year and its associated uncertainty as further evidence for pessimism. It would appear, in the marketing community at least, that this argument is falling on deaf ears since its viewpoint on 2015 budgets paints the most upbeat picture in eight years.
We, at MEC, would definitely subscribe to the more upbeat view. Our monthly monitor of sentiment measures on consumer opinion and the nation’s finances shows increases against nearly every category. In addition, key economic indicators all appear to be favourable:
The UK inflation rate is at its lowest level since records began falling to 0.0 % in February fuelled by cheaper petrol and lower food prices as the supermarkets slug it out. This ‘good deflation’ should create spending power for discretionary expenditure. Average household income has returned to similar levels before the financial crisis in 2007 and consumer confidence as measured by GFK’s Consumer Confidence Barometer remains at positive levels in 2015 – some 8 points better than the situation a year ago.
2014 figures would support the argument. GroupM’s media and marketing forecasts estimate a 6% growth in media expenditure for 2014 and it is well documented that digital is driving this increase – both GroupM and the IAB (Interactive Advertising Bureau) agree on a 14% growth for the ‘channel’ in 2014 with hefty increases in display, social and mobile expenditure. The IAB attributes this rise to an increase in multiple device ownership, reporting that the average British household now owns 7.4 internet-connected devices and this has had a disruptive effect on the traditional channels, particularly in print. Such disruption means that digital expenditure will break the 50% share barrier in 2015, according to GroupM’s latest estimates.
Whilst the IAB will be vociferous when this landmark is reached, in my last blog I highlighted linear TV’s resilience to the migration of marketing budgets online. We would suggest that this is likely to continue in 2015 and our market intelligence indicates a continued high demand for the medium. It is not surprising, therefore, that we see Facebook, Google and Twitter trying to attract increased brand spend with what seems like the launch of new initiatives almost every week.
All of which, points to a buoyant market in 2015. The Bellwether report predicts a 4.2% growth in main media spend this year which we think could be higher – even reaching last year’s levels – not bad for an election year.
Read more Bellwether blogs by the IPA's Tom Lewis and IPA Scottish Chairman Claire Wood.
Last updated 16/04/2015