Q2 2023 Bellwether Report

UK companies ramp up investment in sales promotions to record levels, driving overall UK marketing budget growth

The IPA Bellwether Report is a quarterly survey outlining companies’ marketing spend intentions and financial confidence.

The Bellwether Report is researched and published by S&P Global on behalf of the Institute of Practitioners in Advertising. The report features original data drawn from a panel of around 300 UK marketing professionals and provides a key indicator of the health of the economy. The survey panel has been carefully selected to represent all key business sectors, drawn primarily from the nation’s top 1000 companies.

Key findings from the Q2 2023 Bellwether Report:

  • Total UK marketing budgets grow solidly in Q2
  • Sales promotions budgets revised to their highest in the 23-year history of the IPA Bellwether Report, signalling behaviour by businesses to support consumers through cost-of-living crisis
  • Firms turn less upbeat on company-own financial prospects, while industry-wide confidence deteriorates further
  • Rising interest rates and stubbornly-high inflation set to weigh on economy and adspend in 2024

Commenting on the latest survey, Paul Bainsfair, IPA Director General said:

"It is welcome news that total UK marketing budgets remain in positive territory, despite the latest figures from the ONS which reveal a ‘listless’ UK economy.

"It is therefore not surprising to see a dramatic increase in sales promotion this quarter. But we would not want to see this as a long-term trend because our comprehensive bank of evidence shows that price promotions damage brands because they lower consumer price references and do not build brand loyalty. While, understandably, brands may think this is the right thing to do for their customers during the current cost-of-living crisis, it is a counter-productive exercise that may generate short-term spikes in sales volumes but will almost never change how consumers think or feel about their brand because they are only interested in the lowest price point.

"What happens next is the eventual erosion of a company’s long-term brand health and profitability. We continue to advocate the well-tested rule of thumb that a 60:40 ratio of brand building to sales activation is the best way to grow business through marketing activity."