U.K. marketers have shifted from caution to quiet optimism as they map out their 2024 spending.
According to the quarterly Bellwether ad forecast from trade body the Institute of Practitioners in Advertising (IPA), the final quarter of 2023 saw marketing budgets increase to their highest level in almost a decade.
The survey, which gleans responses from 1,000 of the U.K.’s top businesses, found marketing spend to have risen by a net balance of 14.7% in Q4 2024. This was up sharply from a modest 5.3% rise in Q3, and it marked the highest uptick to budgets since 2014.
When it came to 2024 planning, 29.4% of companies said they’d be increasing budgets over the next 12 months.
The show of optimism comes amid the political uncertainty of a looming general election and an unexpected rise in inflation.
Despite this challenging backdrop, marketers are remaining proactive, planning for the long term rather than withdrawing into cost-saving mode.
Events including the 2024 Olympic Games and the UEFA Euro 2024 tournament, which offer sponsorship and brand-building opportunities, look set to help this trajectory continue.
Joe Hayes, principal economist at S&P Global Market Intelligence and author of the report, said the resilience of U.K. marketing continues to be at odds with the worsening economic climate businesses are facing.
“The U.K. economy is expected to endure a shallow recession, which will end in the first half of 2024, and our data clearly show more companies are prepared to ride out the bumps to put themselves in a strong position when the recovery phase kicks in than those that aren’t.”
Where are budgets going?
Sue Benson, managing director at The Behaviours Agency and IPA city head for Manchester and North West, said both agencies and clients will breathe a sigh of relief at this quarter’s report.
“We have another fun-packed year ahead of us, with recessionary pressures, an election, the Olympics and Euros all set to try our marketing resilience. Plus, we’re seeing evidence of consumer behavior changes that were born out of the cost-of-living crisis now becoming a habit,” she said. “Marketers need to use this newfound optimism and possible budget upweights to double down on brand investment, ensuring their brands deliver on the value exchange with their customers.”