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Bellwether: Marketing spend rises at fastest rate for three years

The Q1 2007 Bellwether Report, the quarterly survey of marketing spend, published this week (16th April 2007), reveals that the the latest Q1 data signals the strongest registered increase in marketing spend for three years, with one-in-four companies have reported an upward revision to their total current marketing budgets. This represents a marked improvement to the budget trimming seen across 2005-2006.

19/09/2008

The Q1 2007 Bellwether Report, the quarterly survey of marketing spend, published this week (16th April 2007), reveals that  the the latest Q1 data signals the strongest registered increase in marketing spend for three years, with one-in-four companies have reported an upward revision to their total current marketing budgets. This represents a marked improvement to the budget trimming seen across 2005-2006.

Again the internet saw by far the strongest gain in Q1, accounting for just under 6% of all marketing spend, which has helped generate the first upward revision to main media advertising budgets for two-and-a-half years and the largest gain since Q1 2000.

Further growth is expected for 2007, buoyed by improved corporate profits, with initial budget setting at its highest since 2000. The strongest growth in budget setting for the year ahead is currently for ‘all other’ marketing (for example event sponsorship, PR, SMS) and direct marketing.

Highlights of the Q1 2007 report include:

• In Q1, 24% of companies reported increased total marketing budgets while 16% reported a decrease, so a net balance of  7.7%.

• 54% of companies have set their new budgets for 2007 higher than their actual spend in 2006, while only 17% have reported a reduction, this resulting in-crease (net balance of 37%) is the strongest since 2000 budgets were set.

• Internet marketing budgets out performed all other sectors in Q1, with a net balance of 19% of companies reporting an increase. Internet spend now accounts for around £2bn of marketing spend per annum. 

• Direct marketing budgets were revised up only slightly in Q1, however it saw the strongest growth of all categories in 2006 (excluding the internet).

Chris Williamson, Bellwether Report author, NTC Economics: "Surging corporate profits and above-trend economic growth has led to a further strengthening of marketing spend, with companies investing in additional marketing to support business expansion plans and new product launches. The planned increase in spend for the 2007 accounting year represents the most upbeat start to a year that we've seen since 2000."

David Pattison, IPA President, Chief Executive Officer ilG Digital: “The Q1 2007 Bellwether Report is a very encouraging sign for almost every part of our industry. Our clients seem to have found both confidence in the economy, and the strength to compete, to plan increased marketing support across the board.”

Sir Martin Sorrell, Chief Executive, WPP: “The IPA Bellwether report, once again, reflects what WPP is seeing in the UK - a recovery against, admittedly, weak comparables, with the spending increase being dominated by expansion in direct, internet and interactive media.  The UK mirrors what is happening in Western Continental Europe. Direct internet and interactive spending, however, still lags consumer use of such media, with consumers spending reportedly 20% of their time online.”

Robert Lerwill, CEO, Aegis group: “The overall trends are certainly encouraging, however it is interesting to see how the component parts are performing. The growth in digital is being driven by the convergence of media and entertainment. This process is pushing the boundaries of digital marketing, making it more attractive to a broader range of demographics and therefore advertisers. The increase in main media advertising spend is also interesting and is indicative of the importance of these media within the communications mix.”

Anthony Wreford, President and CEO Europe, DAS: “It’s encouraging to see that improved corporate profitability has led to increased marketing activity.  The only surprise is that the internet percentage growth is not higher, given the ‘noise level’ in the market and interest from clients.  We also know that an increasing amount of PR activity is internet-based particularly the use of social media and ‘word of mouth’.”

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 Markit on 01491 418 700, email economics@markit.com .

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


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