Inclement Bellwether

UK marketing budgets have been revised downward for the second quarter running, according to the IPA's quarterly survey of marketing spend, the Bellwether Report. MR is in the 'all other' category, which the survey says is the worst hit.

Published today, the report suggests business confidence has 'fallen further' with weaker than expected sales, subdued consumer spending, and ongoing concerns about the health of the UK economy driving cost-cutting in marketing budgets.

The 'All other' category, which includes 'below-the-line' activities such as events, PR and market research, has seen the sharpest cut to budgets, although direct marketing has also seen its largest fall in eight years, and sales promotion its biggest for two years.

'Main media' budgets have not declined and growth is predicted for the rest of the year, but this seems to reflect the inclusion of online advertising whose growth is likely to be cancelling out declines in 'traditional' media such as print, TV, outdoor, cinema and radio. Internet budgets have been revised upwards by 27% of respondents and downwards by only 5% - a recovery from the last quarter which was the sector's weakest since mid-2003.

The report says total marketing expenditure is still set to rise in 2008, with almost half of all companies setting their 2008 budgets higher than their 2007 actual spend, but growth will be less than predicted at the start of the year, and considerably below that seen at the start of 2007. Overall, reductions to marketing budgets are most common in the FMCG, public, industrial/utilities and media sectors.

A note of caution for budget-slashers was sounded by Moray MacLennan, IPA President, and Chairman Europe M&C Saatchi, who said it was 'a good moment to remind advertisers that those that maintain the strongest marketing spend will come out on top.'

The report is based on a survey of 250 companies, representing 'all key business sectors' - details are available from bellwther@ntceconomics.com . The IPA (Institute of Practitioners in Advertising) is online at www.ipa.co.uk .


Meanwhile research conducted for UK exhibition and conference The Credit Show says small businesses in the sector are in relatively buoyant mood: When asked if they had to start their business again in today's economic climate, the survey reports 83% of marketing, advertising and PR businesses would 'do it all again tomorrow'.

SMEs hope to expand sales in the UK on average 56% in the coming year. Based on detailed online interviews with 117 small and medium sized businesses, the survey found just under half planning to expand into a new area in the next 12 months and a further 37% likely to recruit new staff; by contrast only one respondent planned to scale back operations.

The Show, at Olympia from 14 -15 May 2008 and online at www.creditshow.co.uk , boasts a line-up including legendary 'prawn sandwich' man Gerald Ratner, who will speak on 'how credit saved my life'.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.