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.