The latest report from IPA Bellwether said marketers will face testing times, as marketing budgets will be affected due to COVID-19 crisis
According to the IPA Bellwether survey, the first quarter of 2020 shows a net balance of -6.1% of enterprises that have revised and lowered their total marketing budgets. The coronavirus pandemic has resulted into significant cuts to all types of marketing activities. However, this is said to be a “high-risk strategy” and marketers are being urged to mull over their decision before pulling spend.
73% of Marketers Are Set to Increase ABM Budgets in 2020
The report said UK marketing budgets have witnessed their biggest reduction since the global financial crisis in 2009. The COVID-19 pandemic has put a sudden halt to consumer and business spending.
According to the survey, market research was the worst-performing category in Q1 of 2020 with a net balance of 21% as several companies revised their marketing budgets. None of the main parts of total marketing budgets recorded an increase. Direct marketing and sales promotions recorded slowest reductions at -6.6% and -7.2% respectively.
The marketers surveyed were more optimistic about their 2020-21 financial year budget plans that show a sharp increase in total marketing budgets over the coming year. The strongest forecast came from the main media advertising segment, with 8.4% of companies expecting an uptick in budget revisions. Growth is also expected to be seen in events marketing budgets post relaxed public health restrictions. Direct marketing budgets are also expected to increase.
B2B Marketing and COVID-19 – Minimal Budget Shift When Business Returns To Normal?
2021 might be a difficult year for marketers as the recovery will probably spillover and the uncertainty about Brexit bounce back, found the report. Marketers in the UK will need to make bolder decisions to achieve the return to growth. Cutting ad budgets is risky unless organizations are saving to survive or are no longer offering advertised services. This can lead to firms losing market share, foregoing sales, and delaying the recovery of profits in the long term.
Brands that will remain determined through this crisis will have an extra edge that will help them achieve competitive gains.
