The latest IPA Bellwether report from the Institute of Practitioners in Advertising reveals a significant increase in the number of clients increasing their spend on ‘sales promotion’, with an index of +4.0 (calculated by comparing the number of marketers increasing budgets to those decreasing budgets, to create a plus or minus balance figure).
Overall, the average IPA Bellwether index stood at +6.5, lifted by a massive +22.7 result for internet advertising.
Paul Cope, Managing Director of the Institute of Promotional Marketing (IPM), the UK trade body for the promotional marketing industry, says: “The latest IPA Bellwether figures are very welcome, but not really a surprise. Promotional marketing, where consumers are offered a reward or incentive to get them to do something, delivers real engagement for brands and is attracting increasing spend in a post-truth world, where what you do matters more than what you claim.”
Channels which saw an increase in budgets in the Q2 IPA Bellwether report include ‘main media’ advertising (+4.9) and events (+4.3).
Cope adds: “Promotional mechanics and techniques are now to be found across all media channels, and are incredibly strong in digital marketing and also events, which include experiential. Promotional marketing is, by its nature, about adding value to a brand and protecting brand equity and margins, which is very attractive for marketers, particularly at FMCG companies which are facing increasing pressure from retailers to cut prices.”
Channels which saw budgets falling included Direct Marketing (-3.2), PR (-6.5) and Market Research (-7.2).
UK marketers remain upbeat about their own company financial prospects, with a net balance of +13.3% of firms saying they were optimistic, fractionally higher than in the first quarter (+13.1%) and the greatest level of optimism since Q1 2017.
Following a slight upward revision to the official Q1 GDP quarterly growth figure, expectations are for a bounce back in Q2. As such, the Bellwether Report predicts a greater degree of optimism towards adspend growth for 2018 and 2019 than it previously forecast. Growth for the year as a whole is expected to come in at around 1.1% (revised from 0.8%), while 2019 growth was also upwardly revised to 0.7% (from 0.4%).