The Q1 2002 Bellwether Report, the quarterly survey of marketing budgets, published today (16th April 2002) by NTC Research on behalf of the IPA, shows the first signs of improving business confidence for eighteen months (since the Q2 of 2000).
The report, which looks at new budget setting, current budget revisions and actual spend, shows that:
Total marketing spend is estimated to have been £42 billion* in 2001
Current total marketing budgets were revised up on average for the first time since Q2 2000. This rise in marketing spend is attributed to improved business sentiment and increased sales revenues from the lows seen in the third and fourth quarters of 2001.
Approximately one quarter of the panel set new marketing budgets in the first quarter (Q1). Of these, 42% reported an increase in budgeted spend compared to the 2001 financial year. 26% reported a decrease.
New budget setting for direct marketing showed the largest rise of all marketing categories for the sixth consecutive quarter. There was also an increase in media advertising spend.
Sales promotion saw its first net drop in average future budgeted spend for the first time in the survey's history. This is a marked contrast to the strong increases in budget spend set out in the second half of 2001. Current sales promotion budgets were revised down on average for the fifth consecutive quarter.
New budget setting for 'other marketing' which includes PR, conferences, sponsorship, corporate hospitality, entertainment and e-commerce reported its first decline in spend by the survey to date.
Said Chris Williamson, author of the report: "The latest Bellwether Report suggests that business optimism has picked up significantly since the lows of late last year and, although advertisers continue to exercise a great deal of caution in freeing up budgets, a corresponding marked turnaround in sentiment towards expenditure on advertising and marketing in general is apparent. "
Said IPA President and Group Chief Executive of Leo Burnett Bruce Haines: "This first quarter report reflects very much what we are seeing in the market place which is a feeling of improving business confidence. Commercial television revenues are forecasted to improve, particularly around the period of the World Cup, and we are beginning to see less use of planned price discounting in the face of stronger sales. We have some way to go before a more sustained return to growth can be assured but these are welcome signs of recovery."
* This figure for total marketing spend (£42 billion) includes production costs. It is £33.5 billion excluding production costs and is breaks down as follows: media advertising (35%), direct marketing (26%), all other (24%) and sales promotion (15%).
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.
To subscribe to the Bellwether report please contact Markit on 01491 418 700, email
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).
For further information:
Chris Williamson, NTC Research, author of the report tel: 01392 202361
Bruce Haines, IPA President and Group Chief Executive of Leo Burnett tel: 020 7591 9360
Hamish Pringle, IPA Director General tel: 020 7201 8201or 07977 269778
Justin Van-de-Velde, Public Relations Executive tel: 020 7201 8240
Last updated 19/09/2008