Adspend growth slows down in Q4

Marketing budgets increased for the ninth consecutive quarter in the final three months of 2014, according to the latest IPA Bellwether Report.

Adspend growth slows down in Q4

The research revealed a net balance of 6.1 per cent of companies increasing spend, down from 12.6 per cent in the third quarter.

The net balance is calculated by subtracting the percentage reporting a downward revision from the percentage reporting an upward change.

Spend was notably directed towards the internet, which went up 15.1 per cent, and main media advertising, which grew 6.7 per cent.

Despite the overall slowdown, the quarterly lift confirms 2014 as the best year yet in terms of marketing spend growth since the Bellwether Report began in 2000. The market has bounced back from the depths of 2008/09, when the net balance plummeted below -40 per cent amid the wider economic downturn.

However, Chris Williamson, the chief economist at Markit and author of the Bellwether Report, cautioned that "business optimism has cooled" going into 2015.

He attributes this to the uncertainty of the general election, the likelihood of a hike in interest rates and ongoing concerns surrounding the eurozone.

Budgets are still expected to continue rising in 2015. In terms of actual spend, plans for the 2015/16 budget year are at their highest levels in eight years, with a net balance of 30.6 per cent of companies anticipating an increase.

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