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Rob Shaw, CEO UK & Australia

The author

Rob Shaw

CEO UK & Australia

The latest IPA Bellwether - Rob Shaw comments

To some extent, the latest Bellwether is difficult to unpick as much of the data was gathered before the referendum. However, the downgrade in the forecast is unsurprising - we’re still slap bang in the middle of post-referendum volatility and there was already some evidence of economic growth slowing, albeit without quite the variability and impact of the last couple of weeks. At this particular point, the outcomes remain to be seen. Indeed, we’re noting that while some clients are more nervous, others remain bullish. Which reflects our view that we see both opportunities and risks.

Many brands will need to consider, if and when Article 50 is triggered, how they prepare for life during and after Brexit. There is much still to be determined.

Typically we see uncertainty playing into moves to digital channels and more sophisticated use of data science to ensure ever-better measurability and accountability. We’re happily well placed for this.  However, there are some interesting questions to ask about investment in brand marketing too.  And not just whether but how. For example, the impact of currency fluctuations on the cost of imports presents an opportunity for UK manufacturers to push brand British.  

It’s reasonably well documented that companies that continue to invest in promoting their brand and products do better during less positive economic circumstances, maintaining presence and grabbing the best share of voice and wallet. So while many companies may have the jitters right now, the key will be balancing a strategy of continued, prudent investment with a tight reign on the purse strings to avoid unnecessary waste. Brands will fare best when partnered by resilient, agile agencies offering innovation and flair in their thinking coupled with the ability to cover whichever bases they need efficiently and effectively.

Report highlights were:

  •  Q2 2016 saw the strongest growth in budgets for a year (+10.7% of companies registering increases in Q2, up from +3.0% in Q1), 15 consecutive quarters of growth (since late 2012)
  • 68% froze budgets over the quarter and shifted rather than increased spend
  • Confidence about own company financial prospects largely unchanged since last quarter’s 13 quarter low.
  • Due to uncertain outlook, Bellwether forecasting shrinkage in adspend of -0.2% in 2015 and -1.3% in 2017
  • Events +13.4%, vs +6.3% in Q1
  • Internet +10.9% vs +9.8% in Q1 – continued expansion over seven consecutive years
  • Main media +9.3% vs +1.7% in Q1 – two-year high
  • Search +7.6% vs +2.8% in Q1 – best since Q1 2015