The 4Q 2001 Bellwether Report, the quarterly survey of client spending intentions published today (22nd January 2002) by NTC Research on behalf of the IPA, shows a further easing in the rate of economic growth. There were further downward revisions to 4Q 2001 budgets and the weakest rise in budget setting in the survey's two-year history.
In 4Q reporting:
1 in 3 companies revised their 4Q marketing budget down in response to pressures on profits from weaker than expected sales.
1 in 5 companies revised their 4Q marketing budgets up, but only in the direct marketing category that saw an increase for the 5th consecutive quarter.
In new budget setting, nearly twice as many companies setting new marketing budgets for 2002 reported an increase in spend on 2001 levels, than reported a decrease.
Trends in both new budget setting and revisions to current budgets were mixed by sector. Retail and consumer oriented sectors (FMCG and durables) reported the strongest growth of budgeted spend for 2002 and the least downward revisions to current budgets. The worst performing sectors were financial services, travel/transport, and entertainment/media sectors.
For 2002, 1 in 3 companies reported a modest rise in media adspend.
Figures for spend in the sales promotion sector were also revised up, but less than in the 3Q.
Spend on internet-related marketing activities, which in some companies includes all e-commerce projects, fell on average. 14% of companies reported an upward revision, whereas 15% of companies reported a downward revision in the 4Q. This suggests reduced investment in internet and e-commerce activities over 2002.
There was a small rise in spend for 'all other' marketing activities for 2002.
The survey was carried out between 7th December and 3rd January with half the panel reported new budget setting for 2002 in this quarter.
Said IPA President, Bruce Haines: "These figures continue to show some tactical changes to the media mix brought about by the economy and a possible reflection of end of year revisions."
"Although media adspend has made a slight recovery from the 3Q, we are still seeing a shift towards direct marketing, and to a lesser extent, sales promotion. The market place is cautious. But, we believe, optimistic. And there are some sectors, such as retail, that are holding up very well, as Christmas sales in the high street testify."
Said Chris Williamson of NTC Research and author of the report: "There is clearly much uncertainly with regard to business prospects, and advertisers are playing a waiting game. However, the Q4 survey suggests very little deterioration in the outlook for marketing spend since the Q3 survey, and the easing in the rate at which media adspend budgets are being trimmed provides promising evidence that we may at the bottom of the cycle."
Note to editors:
The Bellwether Report is produced for the Institute of Practitioners in Advertising (IPA) by NTC Research and published its first findings for Q1 2000. It is based on a questionnaire survey of 200 plus UK-based companies that have agreed to provide regular quarterly information on trends in their advertising and marketing activities. The survey panel, recruited from the UK's top 1000 corporations, was selected to ensure that the survey data provide an accurate indication of actual spending trends in marketing communications in the economy as a whole.
'Other' marketing includes corporate hospitality, entertainment, exhibitions, conferences and seminars, sponsorship, promotional material, newsletters and other corporate literature, public relations, market research, and internet/e-commerce activities.
Advertising expenditure rose from £15.3 billion in 1999 to £17 billion in 2000 (Source: The Advertising Association).
The IPA is the industry body and professional institute for the UK advertising, media and marketing communications agencies. It has 213 corporate members.
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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).
Last updated 19/09/2008