(Reuters) – A six-year run of marketing spending growth at British companies ended in the final quarter of 2018 as uncertainty over Britain’s impending exit from the European Union led companies to clamp down on costs, a survey showed on Wednesday.
The IPA Bellwether survey, conducted by IHS Markit, showed that 16.4 percent of marketing executives raised their budgets during the fourth quarter but the same percentage of executives who took part in the survey cut their marketing budgets.
Political and economic uncertainty caused by a drawn-out Brexit negotiation process has dampened both business and consumer confidence, driving belt-tightening and restricting resources available to marketing executives, the survey showed.
“Company-wide indecisiveness restricted the allocation of resources to marketers, as the wait-and-see approach to how the Brexit process will transpire appears to be the current strategy in place for many UK businesses,” said Joe Hayes, economist at IHS Markit.
The survey also flagged that for the first time since 2012 companies were unsure or not feeling upbeat about their own financial prospects, suggesting that plans to protect margins were leading marketing executives to curtail spending.
“Provisional data for budgets for the coming 2019/20 financial year indicate that the downbeat stance seems likely to persist,” Hayes said.
The survey also found that advertising spending is expected to rise 0.5 percent in 2018, lower than a previous estimate of 1.1 percent.
“Nonetheless, some foresee short-run opportunities from the (Brexit) uncertainty, with stockpiling efforts helping drive business in manufacturing industries,” the survey report said.
Around 300 UK marketing professionals, primarily from Britain’s top 1,000 companies and across all key business sectors, were interviewed for the survey.
Reporting by Noor Zainab Hussain and Samantha Machado in Bengaluru; Editing by Shounak Dasgupta/Keith Weir