LONDON — Marketing and communications leaders see the greatest opportunity for European sales and growth in Germany, according to a new study, but the UK still receives outsized marketing and communications budgets compared to smaller European markets.

European PR and communications agency Tyto’s first annual study of more than 370 senior executives responsible for multiple markets in Europe, the Pathfinder Barometer, found that he UK and France lag behind Germany for expected sales and growth potential in the second half of 2023.

The study found that Germany ranks first for overall volume of expected sales in H2 among 26% of respondents, ahead of the UK and France with 18% each. Germany is also seen as the market with the most potential, as 26% of respondents ranked it the top market for expected year-on-year growth compared to the second half of last year, compared to the UK (16%) and France (15%).

However, the data reveals that marketing and communications budgets are not being spent in-line with the perceived value of each market, with the UK being the main beneficiary. While budget allocation in Germany is consistent, with 26% again ranking it the top country for European marketing and comms spend, the UK is the top market for 25% of respondents, with 19% ranking France as their number one market for spend.

Outside of the biggest three markets, a combined 35% of respondents ranked Belgium, Denmark, Italy, Netherlands, Norway, Spain or Sweden, as their number one market for overall second half sales, and 39% chose one of these countries as their top market for expected year-on-year growth in H2. However, only 27% of respondents ranked one of these seven countries top for marketing and communications spend in the second half of the year.

Planning and executing campaigns across multiple countries was cited as the top concern by 17% of those in the study. Other concerns including how to adapt to new corporate strategies that have emerged in response to a challenging environment (19%), and the implications of AI (19%).

Budgets are either stable or rising across all 10 disciplines tracked in the research. Digital marketing is set to be the biggest beneficiary, with 63% saying they plan to increase spend, followed by advertising (61%) and content marketing (56%). Almost half (49%) of senior marketing and communications professionals in Europe plan to increase PR spend, with a further 36% saying budgets will remain at current levels.

Tyto CEO Brendon Craigie said: “Our study provides further evidence that the centre of gravity in Europe is shifting even more toward Germany. European marketing and comms professionals are right to prioritise spend there, but they are missing out on valuable opportunities in other, smaller, European markets.

“While the UK is clearly important, there are significant rewards for those able to shift part of that budget into markets with untapped growth potential. The industry recognises the difficulty of running multi-market campaigns, but our study makes clear the golden opportunity for those who can more confidently and effectively integrate additional markets into their plans.”

The agency conducted the research to launch its Pathfinder strategic advisory service, which provides insights, strategy and planning to help brands to build their reputation and make the most of marketing and communications opportunities across Europe.

Tyto recently expanded into the Nordics with an initial focus on Sweden, and has appointed its first managing director to support the agency's next stage of growth.