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Marketing Budgets Fall
In the UK, marketing budgets in the last quarter of 2007 were cut significantly in response to concerns about the economy and weak sales, says the latest IPA Bellwether quarterly survey of marketing spend. Just 6.2% of budget was allocated to market research during the year.
Although almost half of all companies have set their 2008 budgets higher than their 2007 actual spend, the IPA says that the downward revision is a signal that 2008 could see a similar effect on budgets if revenues fail to pick up.
Highlights of the Q4 2007 report include:- Only 15% of companies reported increased total marketing budgets while 19% reported a decrease (net balance -4.4%)
- Main media spend saw the biggest downwards revision since Q2 2006, with a net balance of -6.5%
- 23% of companies revised their budgets for the Internet upwards, while 7% saw a decline
- Total share of spend in 2007 was:
- 29.3% main media
- 25% direct marketing
- 8.7% Internet
- 9.5% sales promotion
- 8.5% PR
- 8.6% events
- 6.2% market research.
The biggest marketing spend reductions were made by financial, FMCG and automotive companies, while brands in the IT, retail, travel and entertainment sectors increased budgets.
Chris Williamson, Bellwether Report Author, NTC Economics said that the survey reveals a marked deterioration in business conditions in the fourth quarter of last year, which companies responded to by trimming their marketing budgets.
However, Moray MacLennan, IPA President, Chairman Europe M&C Saatchi was more upbeat and responded by saying: 'The fact that budgets were trimmed in Q4 following three quarters of strong growth, will not come as a surprise. It's encouraging to see 2008 budgets looking positive, what will be of most interest is of course the extent to which they are revised in the next report - hopefully nerves will hold.'
The IPA is the industry body and professional institute for advertising, media and marketing communications agencies in the UK. Its Bellwether Report contains detailed analysis of the UK's marketing economy, based on a survey of 250 companies, representing all key business sectors. Web site: www.ipa.co.uk.
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