British companies plan to increase their spending on advertising this year as they expect the UK economy to remain resilient despite the Brexit vote, a survey showed on Wednesday, reversing a previous forecast for a decline in ad budgets.
The IPA Bellwether report forecast corporate ad spending would rise 0.6 percent in the current financial year, revising a previous forecast, made in October and reiterated in January, for a 0.7 percent decline.
The survey, conducted by IHS Markit on behalf of the Institute of Practitioners in Advertising, said on balance a net 26.1 percent of UK companies indicated they would increase their advertising budgets in the 2017/18 financial year.
Growth in ad spending would stagnate in 2018 before trending upwards again in 2019 and 2020, the report said.
“The … survey paints a picture of a solidly growing UK economy, with companies continuing to show a willingness to commit increased resources to marketing and capitalise on current positive sales trends,” said IHS Markit’s senior economist Paul Smith.
The report showed a net balance of 11.8 percent of companies increased their budgets in the first quarter, led by a jump in internet ad spending, which touched its highest level in just under four years.
The increase comes even as Google’s YouTube (GOOGL.O) and Facebook (FB.O), which dominate global online ad spending, face rising criticism for not sufficiently policing offensive posts and content. That has prompted some top client brands to pull ads in recent months.
“Despite the current, turbulent digital ecosphere, it is clear that marketers are attracted to the cost-effectiveness of digital advertising and its ability to reach and accurately target their consumers,” said IPA’s director general Paul Bainsfair.
The survey interviewed around 300 UK marketing professionals primarily from Britain’s top 1,000 companies and across all key business sectors.
(Reporting by Esha Vaish in Bengaluru; Editing by Susan Fenton)