The latest IPA/BDO Bellwether survey published today (18th January 2010) reveals that marketing spend fell for the ninth quarter running in Q4 but with the rate of budget trimming the slowest since Q1 2008. Companies were the most optimistic about the financial outlook for their industries in almost five years — with 35 per cent of firms surveyed seeing improved prospects, consistent with growing confidence in the ongoing economic recovery. Budgets for 2010 have also been set higher on average compared to 2009 spend.
The survey further suggests that the UK emerged from the recession in the final quarter of last year.
By sector internet advertising budgets were revised up for the second quarter running. Direct marketing budgets were revised up for the first time since Q2 2007. Marketing spend was revised down across sales promotion, ‘all other’ (below-the-line such as PR, events), and main media but at a slower rate than the previous quarter. Although main media saw the sharpest reduction it was the least marked for seven quarters.
Says Rory Sutherland, IPA President, Vice-Chairman, Ogilvy Group UK: "These findings are welcome, in that they show that the picture painted by the last Bellwether Report was not a false dawn. This latest report also seems to bring particularly good news for direct and digital marketing activities, which seem to be leading the recovery."
Says Andy Viner, Head of Media, BDO LLP: "The survey results are good news for the marketing services sector. After nine consecutive quarters of reduced marketing spend, it appears that the rate of decline is at its slowest in nearly two years. There are a number of indicators to demonstrate that confidence is returning, with companies being upbeat about their own sectors and their corporate performance. Marketing budgets in 2010 are now set to grow, with companies re-thinking their budget allocation, for example, the spend in areas such as online advertising are due to increase significantly. Unsurprisingly, companies are continuing to seek cost effective and flexible options where the return on investment can be measured."
What do you think of the latest findings? Have your say by emailing
danielle@ipa.co.uk Says Chris Whitson, IPA DM Group Chairman and Planning Partner at Stephens Francis Whitson: “The latest figures for direct marketing certainly reflect the amount of work IPA agencies reported they were engaged in through the last quarter of the year. There was undoubtedly a belief that consumers were more inclined to engage with brands as the year drew to a close, and the effectiveness of direct marketing to maximise the benefit of that inclination led to an increase in spend. The report also offers encouraging signs for the coming year and demonstrates that the measurable, actionable discipline of direct marketing has a key role to play in helping clients achieve their goals this year.”
Says Steve Williams, IPA Media Futures Group Chairman and Chief Executive, OMD Group: “This report evidences signs of increasing confidence in the media sector, from the point of view of offline media spend, especially in the context of the last few quarters. When viewed in combination with the positive online spending report, which is, in reality, how agencies and advertisers plan and allocate their marketing budgets now, through holistic planning processes across all channels, it shows a truer, and increasingly optimistic, picture.”
Says Mark Fagan, IPA Search Chairman, Digital Media Director, Golley Slater: "What’s really interesting in this latest report, even taking seasonality into account, is that the Q4 increase in search spend correlates with a more positive outlook regarding the predicted return to economic growth. Search is now one of the most important parts of the marketing mix and | predict this trend will continue into 2010 which is great news for businesses that take full advantage of this medium and the agencies that support them.”
Says Matt Simpson, IPA Digital Media Group Chairman and Head of OMD Group Digital: “The increased confidence shown by marketers in the online channel and especially in search is welcome news and a great indicator for the rest of the market. The continued fast pace of development in targeting and measurement capabilities across online channels has definitely helped advertisers reduce the risk of their marketing spends, and to commit more budget in the future.”
The Bellwether Report is researched and published by Markit Economics on behalf of the IPA. It features original data drawn from a panel of around 300 UK marketing professionals and provides a key indicator of the health of the economy. The first report was published on the 17th July 2000. To subscribe to the report, please contact sophie.jarvis@markit.com Historical data is available on request to economics@markit.com Topline figures and industry reaction is also available on the IPA website www.ipa.co.uk
BDO LLP is a new sponsor of the report. A UK member firm of BDO International, it is the world’s fifth largest accountancy network, with more than 1,000 offices in 100 countries.