U.K. marketing budgets are growing at their slowest rate since 2015, according to industry body the Institute for Practitioners in Advertising (IPA).
Figures saw their slowest rise for almost three years during the third quarter of 2018, according to the report.
The IPA’s quarterly Bellwether report is researched by IHS Markit, which surveys around 300 marketing professionals in the U.K. Twenty-one percent of those questioned said they were increasing investment in the third quarter of 2018, but 18 percent said it would decline. Some on the panel said spending plans were on hold until the future of the U.K.’s relationship with the EU was clearer.
“With ongoing Brexit uncertainty, it is perhaps no wonder that companies are having to be more cautious with their marketing spend and are inevitably increasingly downcast about their financial prospects,” said IPA Director General Paul Bainsfair in a statement emailed to CNBC.
Some respondents were concerned that hiring staff would be difficult after Brexit, while others said an increase in international visitors if the pound was devalued could boost business.
Marketing spend on traditional formats such as TV, radio and cinema advertising, remained constant, the IPA said, while digital ad spend is set to increase. “We must take some solace in the fact that investment in main media (traditional formats) spend is fairly constant quarter-on-quarter. As the evidence shows, main media is the most effective route to building brands,” Bainsfair said.
Twenty-four percent said digital ad spend would go up in the third quarter of 2018, while 10 percent said it would decrease. Public relations spend was set to go up, with 15 percent expecting higher growth.
“Since the end of 2016, there has been a distinct slowing of growth momentum in U.K. marketing budgets,” Joe Hayes, an economist at IHS Markit said an emailed statement. (The) latest Bellwether data revealed further sluggishness, as growing uncertainty towards the U.K. economy’s outlook as well as rising cost and competitive pressures impact companies’ discretionary spending.”
More than 60 percent of the survey panel said there had been no change in total marketing spend.
“The outlook over the coming three months signaled further woes, with panellists’ assessment of industry-wide financial prospects at the most pessimistic since the end of 2011,” Hayes added.