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Marketing spend still growing in 2001

Twice as many companies raised their marketing budgets than cut them in the first quarter of this year suggesting that marketing expenditure is still set to increase in real terms despite the general slowdown in growth rate.

04/01/2008

Twice as many companies raised their marketing budgets than cut them in the first quarter of this year suggesting that marketing expenditure is still set to increase in real terms despite the general slowdown in growth rate.

The Bellwether Report, the quarterly advertising and marketing industry indicator which tracks actual client spending intentions within the economy, reveals in its first quarter report for 2001 that just over 40% of all companies reported that they had raised their 2001 budgets compared to the previous year, double the number that noted a decline.

Bruce Haines, the new President of the IPA said: "It is perhaps surprising that twice as many clients are increasing their spend on advertising and marketing despite the general turndown in growth. Everyone expected these figures to prove the UK was set for a downturn yet the picture is much more one of  "steady as she goes".

"The optimism about a second half recovery might actually have substance. The good news is that since the recession of ten years ago, UK businesses have learned the value of their advertising and marketing communications expenditure and have realised that today's circumstances offer the cheapest time to win brandshare."

As seen throughout the survey's five-quarter history to date, companies setting new marketing budgets in the first quarter reported that spend allocated to direct marketing had increased by a proportionally greater extent than for all other main marketing activities. New sales promotion budgets again showed the smallest rise of all main marketing activities while advertisers allocated 1.8% of their total current financial year budgets to the internet, the same figure as in the final quarter of last year.
 
Hamish Pringle, Director of Marketing Strategy at the IPA said: "Total ITV revenue for February 2001 was £143 million compared to £152 million in 2000 and £141 million in 1999. What those figures show is the extraordinary impact of the dotcom frenzy, the US Presidential election and the Olympics boom which made last year so exceptional in terms of marketing expenditure. This year, things are coming back into line and we may be seeing the start of Europe decoupling from the USA and Japan in terms of economic forecasting."

The Bellwether Report is a quarterly survey of marketing expenditure produced for the IPA by NTC Research. It is based on a questionnaire survey of nearly 300 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 marketing communications in the economy as a whole. Participating companies therefore include a broad variety of advertisers in terms of market sector and geographical location. By sector, the panel comprises automotive 4.7%, consumer durables 3.1%, financial 11.2%, FMCG 7.8%, IT/computer 7.8%, retail 6.2%, travel/entertainment 14.9%, utilities/telecoms/industrial 24.2%, other 20.2%.

The next Bellwether Report, covering the second quarter of 2001, will be published on 17th July.

 

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).

 

Last updated 29/08/2008


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