The latest Bellwether report from the IPA has stated that marketing budget growth hit its slowest rate in three years during the third quarter of 2018. You can read the report here but one major factor seems to be uncertainty over Brexit, with marketers adopting a cautious stance.
A few snippets taken from this report claim that whilst digital, search and SEO spend were showing some budget increase, events marketing, market research, direct marketing and ‘other’ marketing was down by varying degrees.
So, here are a couple of thoughts on this report.
Firstly, if there is a downturn in budgets (in whatever discipline), that might imply that there may be less money a marketer is planning to spend with its incumbent agencies. On the flipside it may lead to marketers being receptive to change to a new agency for whatever reason – an obvious one being better value than their existing agency or a different approach and new ideas for the budget available.
Secondly, if you win a brand new account, even if budgets are down within a specific sector or across a certain marketing discipline, it is still extra revenue for your agency that you didn’t have yesterday.
This is one of the key reasons why a new business pipeline is so crucial to agencies. I could list numerous examples of agencies we have come across over the years that have relied on one or two big corporate clients only for that client to slash budgets (or in some cases go into administration) and the end result is that the agency is left with an extremely difficult uphill battle to remain solvent. With a healthy new business pipeline you are far better protected from this situation.
Interestingly, one aspect of the Bellwether report that seems really at odds with our own experience at the moment is in terms of number of new business wins we have helped generate for our Market Research Agency clients. There have been a vast number for them this year. Maybe all just luck? Or maybe they had the opportunities to get in front of the right decision makers at the right time to win new accounts. After all, that’s our day job.