Are things looking up for Marketing in 2018?

At Marketing Week Live (MW Live) in London recently, it was interesting to see that the market research part of the event (the Insight Show) was really buzzing. However, the marketing side was noticeably quieter. The presentation stages were well supported but fewer people were walking around the exhibition.

This got me thinking about the possible reasons for the discrepancy:

is market research a lead indicator of future marketing spend?
is marketing changing its focus as pressure on budgets continues?
or is it due to something completely different?

Recent data from the Bellwether report by the Institute of Practitioners in Advertising (IPA) showed market research budgets declining in Q4 2017. According to Katie McQuater from RESEARCHLIVE “The reduction of market research budgets continues a period of contraction that has now lasted for two-and-a-half years.” [1] However, things are looking up for market research in the year ahead with expectations of growth in 2018. Was the Insight Show an indication of this positive sentiment?

When it comes to marketing the Bellwether report indicates that marketing budgets grew during the final quarter of last year but at the slowest rate in almost two years.

Undoubtedly marketing managers are looking to get the most out of their budgets which are increasingly under scrutiny. The consumer goods giant Unilever is increasing its investment in digital media and digital capabilities [2] while its biggest rival, Procter & Gamble, is cutting digital spend by $200 due to performance concerns and reinvesting in areas such as television, audio, and e-commerce [3]. FMCG often leads where other sectors follow. However, it remains unclear as to what will happen to overall marketing spend across the board.

The job market can be seen as a good indicator of future intent. Q4 2017 saw a rise in the number of permanent marketing positions being advertised in the UK according to recruiters Morgan Mckinley [4]. They maintain that some businesses, who are looking to stretch their budgets or cut costs, are moving their marketing function in-house rather than rely on agencies [4]. Salaries for marketing positions that were advertised in the final quarter also rose by just under 3.5% according to CV-Library’s quarterly job market report [5].

Another significant component of the marketing mix is advertising. UK ad spend rose for the 17th consecutive quarter driven by a rise in digital ad spend. The preliminary estimate for total UK ad spend during 2017 is 3.4% year on year according to Marketing Week [6]. Growth in advertising spend is expected to slow to 2.8% in 2018.

What does all this mean for marketing in the year ahead?

As companies gain a better understanding of where their marketing is being most effective they will continue to redirect resources to these areas, as P&G has done with their digital spend. While budgetary pressures will see some companies bring specific marketing jobs back in-house, like content and digital marketing, companies are likely to continue to spend money in areas where specialist skills might not be needed on a full-time basis such as creative roles, designers, and PR professionals. In general, the marketing professionals that I spoke to remain optimistic about marketing in 2018 both on the agency and client side.

1. MARKET RESEARCH BUDGETS CONTINUE DOWNWARD TREND, Katie McQuater, 17 JANUARY 2018 https://www.research-live.com/article/news/market-research-budgets-continue-downward-trend/id/5033102
2. Unilever increases media spend by £220m and shifts more money to digital, Sarah Vizard, 1 Feb 2018 https://www.marketingweek.com/2018/02/01/unilever-increases-media-spend-220m-steps-investment-brand-marketing/
3. When Procter & Gamble Cut $200 Million in Digital Ad Spend, It Increased Its Reach 10%, Lauren Johnson, March 1, 2018 http://www.adweek.com/brand-marketing/when-procter-gamble-cut-200-million-in-digital-ad-spend-its-marketing-became-10-more-effective/
4. Marketing recruitment news: Another positive end of year, Emma Greaves, 03.01.2018 https://www.morganmckinley.co.uk/article/marketing-recruitment-news-another-positive-end-year
5. Job market report Q4 2017, Natashia Larkin, January 18, 2018, https://www.cv-library.co.uk/recruitment-insight/job-market-report-q4-2017/
6. UK ad market growth to slow in 2018 as digital spend decelerates, Lucy Tesseras, 31 Jan 2018, https://www.marketingweek.com/2018/01/31/advertising-spend-slows/

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ArchiveMarina Hop28 March 2018Viveo Ltd