The Q3 2005 Bellwether Report, the quarterly survey of marketing spend, published today (18th October 2005) by NTC Research on behalf of the IPA, showed that:
Marketing budgets in Q3 were cut on average for the second quarter running, dropping at the fastest rate since the Iraq war in 2003.
Adspend growth will remain weak in the final quarter of the year
although marketing spend is still set to have increased for 2005-06 as a whole, growth for the year will be less strong than had been originally anticipated. These downward revisions to budgets were commonly blamed on disappointing sales and profits as business conditions steadily deteriorated over the course of the year to date, linked in turn to weaker consumer spending and high energy costs.
As marketing spend acts as a leading indicator of the wider economy, the latest survey suggests that economic growth is set to remain below its long-term trend rate in coming months. Comparing UK economic growth — as measured by gross domestic product (GDP) — against Bellwether survey data relating to revisions to total marketing budgets, show that:
The Q3 Bellwether data suggest that the UK will struggle to repeat the economic growth of 0.5% seen in Q2 during the final two quarters of the year, putting growth for the year at under 2%.
The Bellwether survey also correctly anticipated the recent drop in advertising expenditure growth recorded by the Advertising Association for Q2, and illustrates how media adspend has been cut to a greater extent than total marketing spend. Slower economic growth is reported to have encouraged companies to shift spend towards relatively lower cost activities such as the internet and direct marketing, which are cited as being more accountable and cost effective.
For press enquiries regarding Bellwether please contact Anna Foster in the IPA Press office on 020 7201 8240 or email anna@ipa.co.uk.
The Bellwether report contains detailed analysis of the UK’s marketing economy, based on a survey of 250 companies, representing all key business sectors. To subscribe to the Bellwether report please contact NTC Research on 01491 411 000, email info@ntc.co.uk or go to http://www.warc.com/bellwether. Bellwether costs £500 per annum (£375 for IPA members) for the report, £650 per annum for the data (£487 for IPA members) and £1000 per annum for both the report and data (£750 for IPA members).