The Q2 2002 Bellwether Report, the quarterly survey of marketing budgets, published today (16th July 2002) by NTC Research on behalf of the IPA, points to a further recovery in marketing expenditure. The net increase signalled by the report is the strongest since the survey began in Q1 2000.
The quarterly report, which looks at advertisers' new budget setting, current budget revisions and actual marketing spend, reveals that:
Current marketing budgets were revised up for the second quarter running with one in four companies noting upward revisions.
Media adspend was revised down, but only moderately, for the sixth consecutive quarter.
Direct marketing budgets were revised up for the third consecutive quarter and saw the strongest revisions with nearly one in four companies reporting upward revisions.
Sales promotion budgets were revised up for the first time since Q4 2000.
Internet related activities were revised up for the second quarter running. (note: internet spend includes in many instances e commerce activities such as B2B and B2C websites in addition to marketing activities such as e-mail and online brochures. It accounts for approximately 2% of client's budgets).
Total marketing spend for 2001 is estimated to have been £42bn and to have remained unchanged, on average, by companies operating both on a calendar and financial year accounting basis.
The report also calculates marketing expenditure for 2001 as follows: media advertising (35%), direct marketing (26%), all other (24%) and sales promotion (15%).
There was no new budget setting recorded for the second quarter due to the few companies setting new budgets in this quarter.
Said the report's author Chris Williamson of NTC Research: "The Q2 2002 Bellwether report provides some further evidence of a recovery of business confidence and marketing spend from the lows of late last year. However, the fact that media advertising budgets continued to be cut, albeit at a much reduced rate, reflects reluctance among advertisers to commit spend due to ongoing uncertainty regarding the economic outlook. Thus, although signs of a bottoming-out of marketing spend are apparent, a question mark still hangs over the strength of the current upturn."
Said IPA President and Group Chief Executive of Leo Burnett Bruce Haines: "It is encouraging to see that the first two quarters of 2002 show advertisers are increasing their marketing budgets after six quarters of decline. Nevertheless we are still concerned about their commitment to media advertising which is still weak, although an improvement on the six previous quarters. Of course advertisers use direct marketing and sales promotion to retain existing business, but to launch, relaunch or to grow a brand, media advertising is a central component of the marketing mix. In fact it's the only way to build brands fast and effectively."
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.
The survey data for the second quarter was taken during June 2002.
'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 was reported as £16.5 billion in 2001, according to the latest figures compiled by the World Advertising Research Center (WARC) for the Advertising Association's Advertising Statistics Yearbook 2002 4.4%. This figure of £16.5 billion for total UK adspend includes agency commission and production costs and covers newspapers, magazines, directories, television, radio, outdoor, cinema, direct mail and the internet. (Source: The Advertising Association).
The IPA is the industry body and professional institute for the UK advertising, media and marketing communications agencies. It has 221 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
IPA Press Office tel:: 020 7201 8240
Last updated 19/09/2008