The IPA Bellwether Report, the quarterly survey of marketing spend, reveals that current budgets have again been revised down for the second consecutive quarter.

This suggests that business confidence has fallen further. Initial budget setting for the rest of 2008 has also been downgraded. 

Weaker than expected sales, subdued consumer spending, and ongoing concerns about the health of the UK economy have driven this cost-cutting.

‘All other’ which includes ‘below-the-line’ activities like events, PR and market research, has seen the sharpest cut to budgets, the steepest for two years.

Direct marketing has seen the largest fall in eight years, and sales promotion the biggest decline for two years. Main media budgets were unchanged in the first quarter of 2008, and are set to see the fastest growth in 2008.

This has been due to the inclusion of the internet in this category which continues to rise heavily, however, suggesting that ‘traditional’ media (print, TV, outdoor, cinema, radio) were revised down.

Within the internet, spend on search rose at a slightly faster rate than total internet.   

Total marketing expenditure is still set to rise in 2008, while almost half of all companies have set their 2008 budgets higher than their 2007 actual spend.

The actual growth of spend for the year is currently well below the buoyant growth signalled by initial budget setting at the start of this year, however, and considerably below that seen at the start of 2007.

Chris Williamson, Bellwether Report author at NTC Economics, explains that the latest Bellwether highlights the dilemma that faces the Bank of England, pointing to a combination of slowing growth but rising inflationary pressures.

Pressure on profit margins led to a further trimming of marketing budgets in the first quarter of 2008, with planned expenditure for 2008 now set to grow less than had been indicated by the survey at the end of last year.

“Sales promotions are set to see the weakest growth for at least eight years, however, reflecting the need to withdraw discounts and offers as companies battle with rising costs," Williamson added.

Moray MacLennan, IPA president and chairman Europe at M&C Saatchi, said that we should not be surprised that budgets are being revised downwards in the current climate. “It is however, a good moment to remind advertisers that those that maintain the strongest marketing spend will come out on top,” he warned.

Share this: digg   del.ico.us   Newsvine   Reddit   Furl   technorati   Facebook

Comments (0)

Subscribe to this comment's feed

Name (required)

Email (required) (not published)

Website

Title

POST

By posting on this website you are agreeing to abide by our website comment policy and all posts are subject to the approval of the website editor. We will remove posts that contain offensive or threatening language, personal attacks on the writer or other posters, posts that are off topic and posts that are considered spam or specifically used to promote any commercial products or services. Any poster who repeatedly contravenes the policy will be banned from posting on the website.