UK Marketing Budgets Flat

UK marketing execs' confidence in the prospects for their industry dropped sharply in the second quarter of 2012, according to the IPA's Bellwether survey. However, so far roughly as many report marketing budgets rising (22%) as falling (23%).

The IPA (Institute of Practitioners in Advertising) said the fractionally higher figure for falling budgets - for the first time in a year - reflects pressure to cut costs, as profit margins continue to be hit by weaker-than-expected sales. The index score for marketers' confidence in their own industry fell away strongly, from 1% to -16.8%.

General business optimism was buoyed at the start of the year amid hopes the global economy had turned a corner, but the IPA says that the subsequent slide in confidence highlighted by this survey reflects in part the re-emergence of uncertainty emanating from the escalation of the euro debt crisis.

By sector, Internet advertising, online search/SEO and sales promotion budgets were revised up, while main media was revised down during the quarter, along with direct marketing and 'all other' (below-the-line) activities - the category which includes research.

Chris Williamson (pictured), Chief Economist at Markit and author of the report, comments: 'Business confidence has taken a step back again, which has caused companies to review their planned spend on marketing this year. The focus has been on cutting back on main media advertising, direct marketing and below-the-line activities and reallocating that money towards sales promotions and the Internet, both of which are often cited as a means to quickly grow sales.'

Web sites: www.ipa.co.uk and www.markit.com .

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