Patrick Reid, CEO, comments on the Q2 IPA Bellwether Report.
“It’s fantastic to see continued positive growth for the Experience sector in this latest Bellwether Report. As we’re seeing across our portfolio of clients, the demand and importance of experiences continue to grow as brands strive to connect meaningfully and engage their target audiences on an emotional level.
With experiences becoming a key factor within marketing budgets there has been a clear bounce back following the pandemic. Consumer appetite for real-life experiences has grown and brands are responding accordingly with a broader take on experiences, delivering not just in-person but creating experience platforms and campaigns which generate content across a wider set of channels, resulting in broader engagement, creating both the depth and reach that brands want. After such a turbulent time it’s great to see the experience industry thriving again.
Whilst we believe this demand will continue to grow building towards a strong Q4, the uncertainty over the economic landscape and cost-of-living crisis mean marketers will have to remain agile and nimble.”
From the IPA Bellwether Report:
Total UK marketing budgets continued to grow at a solid pace in the second quarter of 2022, according to the latest IPA Bellwether Report. Despite this, with strengthening economic headwinds, UK companies’ financial prospects deteriorated sharply, contributing to cuts in adspend forecasts.
According to the Q2 2022 Bellwether data, around a quarter (24.2%) of surveyed companies raised their total marketing expenditure during the second quarter, while 13.4% registered budget cuts. At +10.8%, the resulting net balance remained in solid positive territory, but indicated a slight slowdown in growth when compared to the opening quarter of 2022 (+14.1%).
Paul Bainsfair, Director General, IPA:
"The Q2 Report out today shows that marketers are understandably concerned about the challenging business climate ahead, as reflected in the deterioration of their financial prospects.
It is interesting to see, however, amid the mounting economic headwinds, there were a number of businesses that signalled their intent to market aggressively to support their brand and gain market share from less-prepared competitors. This is usually a wise and canny move.
All the IPA’s analysis on who does best in a downturn, shows that the companies that recover fastest are the ones that either maintain or increase their marketing spend during difficult economic times. Equally, cutting ad budgets - relative to competitors’ spend - in a recession undermines companies’ ability to grow future market share and profits.
Meanwhile, others were also planning for the challenges ahead by positioning their businesses to support customers through difficult times. Brands need to be seen and continue to work for the benefit of consumers. They are important because they offer choice which ensures competition and lower prices, which in the months ahead will be important for consumers looking to spend their money wisely."