Q3 2009 Bellwether Report published today
The latest IPA/BDO Bellwether survey published today (12th October 2009) reveals that marketing spend fell for the eighth quarter running in Q3 but with the smallest reduction in budgets in over a year. Due to a strong rebound in business confidence – 47 per cent of companies surveyed are seeing improved prospects, consistent with the economy returning to growth.
Amongst those companies surveyed, internet advertising was the only category to see an increase in spend with budgets rising for the first time since Q2 2008. ‘All other’ (below-the-line such as PR, events, sponsorship) again saw the steepest cuts. Main media advertising followed, but cuts here were the smallest for six consecutive quarters.
The retail and travel & entertainment sectors saw upward revisions to spend, with the steepest falls seen in financial services, other non-governmental services, IT & computing, and industrial sectors.
Says Rory Sutherland, IPA President, Vice- Chairman, Ogilvy Group UK: "Although marketing spend is still falling this latest Bellwether is an encouraging sign that budget cutting is slowing. Whilst companies are still understandably wary the report reveals a strong rise in business confidence and the suggestion that GDP may well have risen in Q3. It will be interesting to see whether the rise in internet spend will presage an upturn in other categories. "
Says Jim Houghton, Head of Marketing Services, BDO LLP:"It will come as a great relief to the industry that the economic pressures seem to be easing. Evidently this relief won't be uniform, with online and sales focused marketing disciplines the strongest. After two years of dramatic decline, the industry also needs to reflect on what recovery will mean when it does finally arrive. The recession will no doubt have a long-term impact on marketing agencies but with intense competition and continued constrained budgets, companies will have to drive both brand and sales. Well targeted marketing spend will be key to achieving this objective."
Have your say:
Says Jim Marshall, Consultant, Starcom, Chairman, IPA Media Futures Group, “This suggests there is the prospect both for cautious optimism and of a slightly more stable and stabilising media market. There is still the fact that the main media category has been more marked down than the internet (not surprisingly), as well as areas such as price promotion, so we are still seeing a high level of caution in the market.
Therefore, while the economy and prospects look improved I think manufactures are reluctant to make significant investment in advertising until they feel more confident for the longer term.”
Says Mark Fagan, IPA Search Chairman, Digital Media Director, Golley Slater: "Recently there has been some interesting debate about growth in other communications channels but the latest Bellwether report shows that search continues to drive great returns for advertisers in the UK. Business confidence looks to be far healthier and it will be interesting to see if search's share of the marketing mix continues to grow as we come out of the recession."
Says Chris Whitson, IPA DM Group Chairman and Planning Partner at Stephens Francis Whitson: "This latest Bellwether must be viewed positively. Yes, budgets continued to be cut but the trend for decline has slowed. With any sustained period of cost cutting, both agencies and clients look for more efficient ways to achieve their business objectives and I believe a certain proportion of the fall in spend is down to agencies reacting well to the changing climate and introducing a more efficient media mix. Every DM agency is reporting significant increases in digital activity which will of course, in media and production alone, lead to decrease in overall spending. As we enter Q4 and planning for next year is in full swing, the next two Bellwethers will be crucial to give us all a good picture of what to expect in 2010."
The Bellwether Report is researched and published by Markit Economics on behalf of the IPA. It features original data drawn from a panel of around 300 UK marketing professionals and provides a key indicator of the health of the economy. The first report was published on the 17th July 2000. To subscribe to the report, please contact firstname.lastname@example.org Historical data is available on request to email@example.com Topline figures and industry reaction is also available on the IPA website www.ipa.co.uk
BDO LLP is a new sponsor of the report. A UK member firm of BDO International, it is the world’s fifth largest accountancy network, with more than 1,000 offices in 100 countries.
Last updated 12/10/2009