Marketing budgets see steep drop in growth rate as Europe remains in negative territory and the Americas on the verge of decline

Stalling trading conditions impact marketing spend, but digital and mobile still lead for highest rates of growth in investment.

Despite remaining in positive territory, the global rate of growth for marketing budgets has noticeably eased, according to new analysis.

WARC’s Global Marketing Index (GMI) for June 2022 reveals that the rate of growth for marketing budgets has dropped to 53.3, a month on month dip from 57.4 in May.

Perhaps of more concern, the global picture masks a region-by-region trend that shows European marketing budgets are in decline for the second consecutive month, and at a steeper rate. The index for marketing budgets in Europe stood at 47.1 in June, down from 49.7 in May. The Americas are on the verge of seeing marketing budgets fall – with the 50.2 value in June 2022 close to the edge of a dip, and representing a rapid easing of growth from 56.1 in May.

The findings come as economic downturns are starting to impact on marketing budgets, with cost of liiving and inflation jumps hitting spend and consumer confidence.

The GMI is an indicator of the state of the global marketing industry, and tracks rates of growth across trading conditions, marketing budgets and staffing levels based on a monthly poll of more than 1,000 marketing executives.

An index value of 50 or more means growth, while a value falling below 50 denotes a decline. Across all regions the headline GMI combining all three measures is in growth, though this has eased month on month across the board. 

In Europe, the headline GMI (covering marketing budgets, trading conditions and staffing levels) stood at 52.0 in June, down from 53.6 in May. The Americas saw a steep decline, from 59.6 in May 2022 to 54.7 in June, while APAC, which last month was the only region to see the rate of growth rise, remains the strongest region, at a rate of 63.9 (down from 66.8 in May).

Digital and mobile remain highest for investment, but this is stalling

Digital and mobile marketing spend remain the highest compared across all marketing channels, though for both this has dipped for the second consecutive month. Mobile continues to outstrip digital at a value of 66.1 (down from 67.6), while the slowing in spend for digital is steeper (63.7 in June down from 66.7 in May).

Out-of-home (OOH) budgets on the other hand, maintained an increase in growth rate, the only channel to do so, while radio teeters on the verge of decline tat 50.2 and budgets for press continue on the downward spiral.

Trading conditions hit marketing budgets 

Trading conditions have stalled across all the regions according to WARC’s latest figures.

Despite remaining in growth in APAC and the Americas, the picture is of a notable slowing, with index values of 63.4 for APAC and 51.9 for the Americas down from 68.7 and 56.7 respectively. Meanwhile in Europe, the rate of decline is speeding up, with the index for trading conditions at 47.7 (down from 49.0 in May), as economic conditions and the cost of living crisis bites.

A long-term decrease in staffing levels is “apparent”, said WARC, with global levels decreasing for the fourth month in a row – at an index value of 62.1 in June 2022. The highest rate of growth was in APAC (66.5), while in the Americas the 62.1 value is a notable dip from the 65.9 recorded in May.