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Q4 2008 Bellwether shows record fall for marketing budgets

The IPA’s latest Bellwether survey published this week (12th January 2009) has found that in Q4 annual marketing budgets amongst those companies surveyed were revised down to the greatest extent ever recorded in the survey’s nine-year history. The cut was the fifth successive quarterly reduction in spend, and 2009 is set to see further cuts, with companies setting their initial budgets for the year ahead below 2008 levels of spend, again for the first time in the survey’s history

20/03/2009

The 4Q 2008 Bellwether Report published this week (12th January 2009) has found that in Q4 annual marketing budgets amongst those companies surveyed were revised down to the greatest extent ever recorded in the survey’s nine-year history. The cut was the fifth successive quarterly reduction in spend, and 2009 is set to see further cuts, with companies setting their initial budgets for the year ahead below 2008 levels of spend, again for the first time in the survey’s history


Current and future spend has been reduced due to lower- than- anticipated sales revenues and growing concerns about the economy, with 75% of companies believing that financial prospects facing their industries had deteriorated compared to three months ago.


Hardest hit were budgets for main media advertising and ‘all other’ (includes PR, events sponsorship and market research). However even internet advertising suffered a record reduction in spend in Q4*.


Says Moray MacLennan, IPA President, “This Bellwether Report suggests that adland in 2009 will be no place for the faint hearted.  Confidence has plummeted and the data suggests a steep decline in GDP for Q1.  Nevertheless, given that marketing and creativity are the solution and not the problem, it will be interesting to see when the investment community starts to look favourably on those who maintain budgets and increase share of voice, as they are more likely to succeed in the future.”



*The numbers in the report represent the percentage of companies increasing their spend minus the percentage reporting an increase.


The quarterly Bellwether Report is now two: the full Bellwether Report (available only on subscription through sophie.jarvis@markit.com  t:020 7260 2487) and a two-page Bellwether Topline (automatically emailed to member CEO and FDs on day of release.) IPA members can still take advantage of a 25% discount on the full 8-page report which compares the data with the PMI, GDP, corporate profitability, interest rates and the performance of media stocks in addition to a full breakdown of adspend (main media, internet, search, direct marketing, sales promotion and ‘all other’). The advantage for Bellwether subscribers is that they will receive the full report 24 hours before the topline is reported in the press. 


The prices per annum are: 8-page Report and Data: £675 + VAT (full price £900 + VAT) Data only: £488 + VAT (full price £650 + VAT)
8-page Report only: £375 + VAT (full price 500 + VAT).


Have your say. Email your comments on the latest Bellwether results to danielle@ipa.co.uk


Your comments:

Says Jim Marshall, Chairman, Starcom, Chairman, IPA Media Futures Group:
“This is not surprising and reflects the general economic gloomy prospects. What it also reflects is a potentially very tough year, particularly for main media. Yet this also means that there will be excellent opportunities to secure terrific value and other benefits for those advertisers that hold their nerve and continue supporting their brands.”  

Says Chris Whitson, Planning Partner, Stephens Francis Whitson, Chairman, IPA Direct Marketing Group:
"The decrease is no great surprise. Undoubtedly, in the face of decreasing sales revenue, marketing budgets will fall. What this means for 2009 is hard to determine, but I believe we will see an increased concentration on customers: as businesses focus on keeping them and generating greater levels of revenue from them. This is direct marketing’s greatest strength in the current climate and that, coupled with the maturing of the DM industry’s digital capabilities, I hope, will see us through the worst of what lies ahead."


Says Arjo Ghosh, CEO, iCrossing, Chair, IPA Search Group:
"The furious speed of this recession will be a watershed for search and digital marketing in general. The huge range of tools we have developed and tracking methods so loudly boasted about over the past decade now have to generate new value as truly integrated  measures of marketing success. This will be a challenge for many and a huge point for difference for the winners."



Says Pete Robins, Managing Partner, agenda21:
“Whilst not unexpected, the results indicate 2009 will be the internet’s toughest year so far. However, with this side of marketing showing the lowest predicted decrease, we would subsequently expect to continue to gain overall market share. The internet marketing community has a golden opportunity to once again show its adroitness and further evolve the performance and accountability side of the industry as we’ve been developing over the last 10 years.”

Last updated 20/04/2009


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