3Q 2008 Bellwether Report sees further revisions to budgets
The 3Q 2008 Bellwether Report published today (13th October 2008) reveals that annual marketing budgets were revised down to the greatest extent ever recorded in the survey’s nine year history. The cut was the fourth successive quarterly reduction in spend and points to a marked deterioration in business conditions since the summer.
The latest downward revision indicates the increasing impact of the credit squeeze on the economy with just 8% of companies being more optimistic about prospects for their industry than they were three months ago.
Hardest hit were budgets for main media advertising and ‘all other’ (includes PR, events sponsorship and market research). All marketing categories saw downward revisions with the exception of the internet, but even this category saw budget expenditure for the year held steady. Internet search was the only category to see an increase yet the rise was only marginal.
Says Moray MacLennan, IPA President, “I doubt these gloomy results will come as a surprise to anyone. In light of current headlines the biggest surprise may well be that 12% of companies’ budgets were revised upwards. The industry will be watching the next set of results with great interest hoping that, following four quarters of decline, the downward curve levels off, despite the impending recession."
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Says Jim Marshall, Chairman, Starcom, Chairman, IPA Media Futures Group: “The recent global economic events are almost surreal in terms of the very clear lack of understanding on the part of governments and financial institutions. However they highlight the now total lack of confidence in the economy and certainly for the next six to twelve months which in turn will and is already having a negative impact on advertising revenues. This is clearly reflected in the Bellwether Report and there is an overall recognition that the market is facing very troubled times.”
Says Matt Simpson, Head of OMD Group Digital, Chairman, IPA Digital Media Group, "With immediate ROI now very high on the advertisers' agenda, we would expect to see search continuing to grow, albeit slowly. It is very encouraging to also see the internet is not reliant on search, with the rest of online media spend staying consistent with Q3 last year."
Says Chris Whitson, Planning Partner, Stephens Francis Whitson, Chairman, IPA DM Group, "It is no surprise that Direct Marketing budgets have been revised down. We can take some crumb of comfort that they've not been hit to the same degree as other media. It's an obvious point to make but I think the real telling statistics will come in the next quarter as we see the effects of 2009 budget planning. That I think, may set the tone for what 2009 has in store."
Last updated 20/04/2009