Marketing budget growth slows as economic headwinds strengthen


Brands’ financial prospects for the year ahead have deteriorated sharply, falling to levels not seen since the height of the pandemic in 2020 and contributing to a cut in annual ad spend forecasts.

Nearly a quarter of brands increased their marketing spend in the second quarter of 2022 despite building economic uncertainty, showing their intent to “market aggressively” through this tumultuous period.

Some 24.2% of surveyed companies increased their spend versus 13.4% registering budget cuts, resulting in a net balance of 10.8%. This indicates a slight slowdown of growth compared to the first quarter of the year when budget growth reached 14.1%, but means it remains in solid positive territory.

Although the latest figure represents a drop from the previous quarter, it is markedly higher than in the fourth quarter of 2021, when a net balance of just 6.1% revised their marketing spend upwards.

Events marketing was the strongest performing category by some way in Q2, and a key driver of total growth. A net balance of 22.2% of companies increased budget for events in the second quarter of 2022, up from 18.7% last quarter, as brands look to host face-to-face activity now lockdown restrictions have eased.

Public relations was the only other category to see a rise in budget since Q1, increasing from a net balance of 0.6% to 3.7%.

Elsewhere, marketing budgets have stagnated. Ad spend for main media dropped from a net balance of 9.4% last quarter to 0% in Q2, bringing a year long period of growth to an end.

Video advertising (down from 9% to 0.8%) and other online (down from 18.6% to 4.4%) are both down significantly but remain in positive territory. Meanwhile, audio and out of home saw downturns deepen, dropping from -8.5% to -16.4% and -4.6% to -15.9%, respectively. Published brands dropped into negative territory, falling from 1.3% last quarter to -2.6% in Q2.


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