The coronavirus pandemic has affected many sectors in the last few months, resulting to major changes in the we live our day-to-day lives. Industries such as travel and hospitality, live entertainment and retail have suffered as a result of business being put on hold in order to protect the public’s wellbeing.
The world of marketing has also been hit heavily by coronavirus, as marketing budgets see a rapid decline in budgets. A IPA Bellwether report revealed the highest levels of budget cuts within marketing in over 20 years; highlighting the affect Covid-19 has had on the industry.
The report revealed that the net balance of companies cutting their marketing budget fell to -50.7% in the second quarter, which is down from -6.1% in the previous three months. This was concluded as is a worse result than during the last recession, when the net fall hit -41.7% in Q4 2008.
Many of the respondents in the report (64%) registered a decrease in spending, while a small number (13%) said there was an increase. A rapid decease in revenue was considered a major factor as to why many companies had to cut costs.
Director general of IPA, Paul Bainsfair said: “As we suspected, these Q2 Bellwether figures reveal the very grave impact of Covid-19 on UK companies’ marketing budgets, financial prospects and employment plans. Understandably companies in the most severely disrupted sectors have had few options but to preserve cash and operations to survive until trading conditions are more benign.
“We can only hope that the range of Government aid – from VAT cuts to the ‘Eat Out’ scheme, in addition to the furlough scheme and more, can help to facilitate this.”
Marketers are being told to prepare for a ‘difficult year’ as a second wave is predicted with additional concerns over whether a vaccine can be found to aid the virus in the long term. Brexit is also a worry for respondents. They believe not much progress has been made, with only 6 months remaining of the negotiation period.
There is some optimism however, with hope lying with the government schemes to help get the economy moving again, which will in result, help the marketing industry. Hopefully.
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