Upswing in Marketing Spending Points to Rising Business Confidence
The most recent IPA Bellwether survey shows a continued increase in business confidence as marketing budgets were revised up for the third consecutive quarter in Q1 2012. The jump in spending came in response to new product launches, optimism about the economy, and higher ROI rates. Of the companies responding to the survey, 22 percent reported an upward revision to marketing budgets compared to 21 percent that reported a budget reduction. This first-quarter increase helped usher in the first annual spending increase in four years.
Business confidence in Q1 has increased significantly amongst marketing executives in relation to the prospects of their own company with a net balance of 19.1 percent; up over 31 percent from Q4 2011. Views at the industry level surged even higher, up to the six quarter high of 1 percent; nearly 46 percent higher than Q4. However, this confidence is not without its caution as businesses plan to increase budgets for the 2012-13 accounting year at the smallest rate in three years.
Nicola Mendelsohn, IPA President and Executive Chairman and partner at Karmarama says, “It’s encouraging to see that marketing budgets are up again for the third quarter running, leading to the first rise in annual spend in four years. Business confidence is returning which is also welcome news. Companies have also set their budgets higher for 2012, albeit with a much greater degree of caution than in recent years due to the continuing uncertain economic climate.”
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