Survey shows UK firms on spending spree in advertising at fastest rate ever
An industry gauge revealed that firms are growing their advertising spending in the UK at the fastest pace recorded, the Financial Times reported. Citing the results of the most recent IPA Bellwether survey which covered the third quarter of 2013, the report said a there was a net 12.3% of firms that registered an increase in their advertising budgets in the UK. This represented its strongest reading since the poll was started nearly 13 years ago.
IPA Director General Paul Bainsfair told FT, "Since the financial crisis right up until the last quarter, we've had flat or negative growth. So this is incredibly upbeat news."
The development came after two of the biggest advertising groups in the world posted a rise in advertising and market spending in the UK, the report said.
The report cited New York-based Omnicom's third quarter growth of 7.5% for the UK which made it one of its more robust growth regions. French rival Publicis, with whom Omnicom is involved in a $35.1 billion merger deal, posted a 7.1% growth in the same period. This was way more than the organic growth rate of 3.5% globally, the report said.
Liberum Capital Analyst Ian Whittaker told FT, "There is definitely a pick-up happening in the [UK] ad market. Your classic recovery story is coming through. UK economic data has been stronger than expected, jobs data are good and housing is picking up again."
FT reported that the figures serve as confirmation that UK's dominant service sector remained buoyant. In July last year, the service sector's output increased 0.2% a month. Based on the survey evidence, the growth continued in August and September.
The IPA said the biggest increase came from internet advertising. A net of 11.7% of the survey respondents beefed up their advertising budgets. Direct marketing took the biggest fall, the report said.